Elaine Wynn has encountered a setback in her fight to stay on the board of Wynn Resorts due to an advisory firm’s recommendation that shareholders not support her re-election campaign.
In a report dated Friday, Glass, Lewis & Co. sided with the board’s decision not to renominate Wynn, a company co-founder who has been on the board since 2002, and endorsed the other two nominees.
Glass Lewis criticized the fact that it was dealing with “substantially no quantitative arguments” all around, but in the end the firm was unconvinced by Wynn’s argument that she represents an invaluable, diverse and independent voice that must remain in the boardroom.
“While we would readily suggest both sides bear some responsibility for these largely unverifiable circumstances, we are ultimately inclined to conclude (Wynn’s) case, which attempts to bury legitimate conflict of interest concerns under her unquantifiable strategic contributions and problematic diversity arguments, fails to yield compelling cause for shareholders to reject the incumbent nominees or support Ms. Wynn's re-election,” the report said.
The Glass Lewis report contrasts with an earlier one from Institutional Shareholder Services. That report opted not to support any of the three candidates vying for two spots on the board, citing strong reservations about some of Wynn Resorts’ corporate practices.
At the center of the dispute is a stockholder agreement between Elaine Wynn and her ex-husband, CEO Steve Wynn, that restricts her ability to sell shares. Elaine Wynn sued trying to invalidate the agreement, and the company says that has interfered with her work on the board. She maintains it has not.
In the report, Glass Lewis said it was also worried about Wynn’s lawsuit, and whether she can keep her own interests separate from her responsibilities to all investors.
“... (W)e share the concern that Ms. Wynn may be leveraging her access to the boardroom to further personal matters, prospectively at the direct expense of the very kind of robust and rigorous dialogue she purports to promote across the bulk of her materials,” the report said. “We believe this matter reflects very poorly on the benefits investors are likely to realize through Ms. Wynn's continued access to — and participation in — the Wynn board room.”
In a statement emailed by a spokesperson, Wynn said the firm “got it wrong” and that she was “deeply disappointed” with its recommendation.
“I believe it not only unfairly undervalues the considerable experience, important diversity and aligned stockholder interest I bring to our Board, but fails to remotely address the one issue facing Wynn Resorts stockholders: Who is the most qualified candidate for election to the Company’s Board?” she said in the statement.
Wynn criticized the report for failing to make a “meaningful comparison” between her track record and that of the two candidates nominated by the board, both of whom are also current directors.
Wynn Resorts, meanwhile, issued a statement saying it was “pleased” with the firm’s recommendation, highlighting a few particularly critical segments and reminding shareholders to vote for the board-endorsed nominees.
The board battle will conclude at the Wynn Resorts annual stockholders’ meeting April 24.