Wynn corporate governance ‘among the worst’: report

The house, apparently, doesn’t always win.

A proxy advisory firm has slammed both Wynn Resorts and insurgent board candidate Elaine Wynn for creating a corporate governance record that is “among the worst” in the US — and urged shareholders to withhold votes for all nominees.

The unusually harsh report from Institutional Shareholder Services is a blow to the campaign of Elaine Wynn — ex-wife of founder Steve Wynn — to rejoin the board and its highly embarrassing to the two board-backed nominees and the company as a whole.

The vote is scheduled for April 24 at the annual shareholders’ meeting.

“There appears to be no daylight between Elaine Wynn and the rest of the board on tolerating weak governance practices, poor pay practices, or an overall corporate governance profile that ranks among the worst, not the best, of US companies,” ISS wrote in its report.

Elaine mounted her proxy campaign in March after the casino’s board moved to eliminate her seat by reducing its size from eight to seven.

In addition to excluding her, the management proxy that Wynn Resorts submitted to shareholders endorsed two incumbent directors — John J. Hagenbuch and J. Edward Virtue — for re-election.

Elaine has since appealed to shareholders that, as a 13-year director and co-founder of the company, she’s not only knowledgeable about its operations but uniquely qualified to stand up to its CEO.

The dissident has also argued that after Wynn Resorts ousted her, there were no women on the board. She said the condition reflected an “appalling lack of diversity.”
ISS countered this claim by asserting Elaine Wynn was as responsible for the lack of female representation as any other director, having sat on the same board but not having “done anything to drive additional diversity.”

The proxy firm also held her equally accountable for such governance gaffes as misuse of corporate aircraft by her ex-husband and a failure to resolve debt-buyback issues should the casino experience a change of control.

It then summed up its case against Elaine Wynn by proclaiming, “There is, in short, no compelling reason to believe that shareholders would lose an iconoclastic, effective champion for better board accountability and governance practices if she were not returned to the board.”

Yet ISS determined the management nominees running against her were even less responsible to shareholders and, for that reason, dismissed any endorsement of them as being, potentially, “a vote for an utterly unappetizing status quo.”