Wynn Resorts battle to oust Elaine Wynn intensifies

By J.D. Morris

Published Monday, March 16, 2015 | 11:37 a.m.

Updated Monday, March 16, 2015 | 2:14 p.m.

Wynn Resorts today shed more light on its board’s decision to remove Elaine Wynn from its ranks, while she continued campaigning to keep her seat.

In a proxy statement filed with the Securities and Exchange Commission, the Wynn board elaborated on its claims that Elaine Wynn, the ex-wife of CEO Steve Wynn, has prioritized her own interests, become less effective as a director and is not “meaningfully contributing” to the board’s work.

Elaine Wynn, meanwhile, told stockholders that she is an “independent voice” on the board whose interests are very much in sync with theirs.

Both parties sent letters to stockholders, with Wynn Resorts asking them to vote today for its two nominees and Elaine Wynn urging them not to vote until she sends her voting materials.

The board revealed about two weeks ago that it would not renominate Elaine Wynn in advance of the company’s annual stockholders meeting on April 24. She fired back a few days later with preliminary materials to nominate herself.

In today’s proxy statement, Wynn Resorts said that if Elaine Wynn is allowed to sell or otherwise rid herself of shares, it could trigger a change-of-control provision that may force the company to buy back some of its debt under less favorable terms.

Wynn Resorts also said Elaine Wynn has “placed her individual interests ahead of her duties as a director,” including in her ongoing dispute with Steve Wynn. That dispute has “reduced the effectiveness of her participation on the board,” Wynn Resorts said.

“In this regard, independent directors expressed reservations that discussion at board meetings was negatively impacted by the perception that Ms. Wynn might seek to utilize statements made at the board meetings, or take positions concerning decisions made at the meetings, to advance her litigation claims or to otherwise advance her individual position as a stockholder,” Wynn Resorts said in the statement.

The statement also spells out why the board’s corporate governance committee decided that Elaine Wynn wasn’t “meaningfully contributing” to the board’s work.

The statement says that the board increasingly does business in committees on which Elaine Wynn cannot participate because she is not considered independent under Nasdaq listing standards. And the statement suggests that the governance committee wants directors who understand Wynn Resorts’ corporate environment but have a different type of experience.

“Particularly in light of the company’s geographic expansion outside of Las Vegas, the Corporate Governance Committee believes that a candidate with broader experience could contribute meaningfully to the board’s work in connection with these important strategic initiatives,” the company said in the statement.

“Although Ms. Wynn has been associated with the companies in which Mr. Wynn has served as chief executive officer, she has never served in a role where she had daily operating responsibility or any direct responsibility for lines of business or major corporate functions,” according to the statement.

At the same time, Elaine Wynn told stockholders that she has worked “tirelessly” on their behalf for 13 years and has been an “integral part” of the growth of the company, which she co-founded. She also said she is Wynn Resorts’ third-largest stockholder, with a 9.4 percent interest in the company.

“It is clear that my interests are very much aligned with the interests of you, my fellow stockholders,” she said in the letter. “Given my substantial stockholdings in the company, you can be assured that I am keenly focused on viewing every board action through the lens of generating overall stockholder value.”

Elaine Wynn said her background gives her a “strong, independent voice on the board” that uniquely positions her to hold Wynn Resorts management, including her ex-husband, accountable. And she again emphasized that she is the board’s only female member, so removing her would create an “appalling lack of diversity.”

In addressing that point, Wynn Resorts said in its statement that it has many women in senior leadership positions, which reflects a commitment to diversity. The company said the governance committee plans to “prioritize women and diverse candidates in its search to bring new perspectives and experience to the board.”