Wynn can’t be remade with the same old players
REMEMBER, THE HOUSE always wins.
And right now, that means newly woke corporate reformer Elaine Wynn gets what she wants. The former wife of Steve Wynn, who is now the company’s largest shareholder, just succeeded in pushing one of her ex-husband’s cronies off the Wynn Resorts board. A second director also resigned.
For decades, the corporate culture at Wynn Resorts let Steve Wynn get away with alleged sexual misconduct. As a board member from 2002 to 2015, Elaine Wynn was part of that culture.
But now, she’s arguing that the tarnished Las Vegas-based company needs a truly independent board and new leadership. And she knows what she’s talking about.
As she testified recently in court, in 2009 she learned about a $7.5 million settlement Steve Wynn paid to a manicurist who said the casino mogul forced her to have sex. That’s nine years before the story broke in The Wall Street Journal. She also testified that she reported the settlement to Kim Sinatra, the company’s general counsel, and that Sinatra ultimately told her the issue was not a company concern, because it had been “handled personally” by Steve Wynn. In a statement issued in March, Sinatra insists that Elaine Wynn never told her “there was an allegation of rape” against Steve Wynn and only made “an oblique reference to a settlement.” And, according to the New York Post, in a deposition for a company lawsuit against a former shareholder, Sinatra said Elaine Wynn never said anything about the settlement until after her 2010 divorce from Steve Wynn, and made no mention of an “inflammatory, crazy salacious” accusation like the manicurist’s charge.
For a top legal adviser to an S&P 500 company, Sinatra sounds rather incurious, doesn’t she? Meanwhile, Elaine Wynn also acknowledges she told no other board members about the settlement, making her less than a workplace-rights crusader. That doesn’t mean no one else knew. It just means that at Wynn Resorts, as with #MeToo revelations at other corporations, women looked the other way, just as men did. Now these two women are arguing over who knew what when. But that shouldn’t divert from the larger issue: the need for true change.
In Wynn’s case, the Journal detailed a decades-long pattern of sexual misconduct that included pressuring employees to perform sex acts. Wynn denies all the allegations, and has filed a defamation suit in response, but was forced out as chairman and CEO of Wynn Resorts
Meanwhile, Elaine Wynn, now the largest shareholder, has turned into a corporate avenger, who wants the old guard out. She says she’s not seeking a board seat herself, or the right to name board members. But she is working to convince investors to reject board member John Hagenbuch, saying he remains too close to Steve Wynn. Besides Sinatra, other Wynn cronies include Matt Maddox, the current CEO, who, according to The New York Times, was in Wynn’s wedding party for his 2011 marriage to Andrea Hissom.
What happened in Las Vegas could stay in Las Vegas, except for a very important local angle — the Wynn Resorts casino currently under construction in Everett. Having missed the allegations of sexual misconduct against Wynn and the $7.5 million settlement during their initial investigation, Massachusetts regulators are belatedly trying to figure out what happened. But they’re really trying to find a way to keep the project with the current licensee. To that end, they have agreed to remove Wynn from the license as a “qualifier.” The casino will also go by a new name — Encore Boston Harbor. Both Maddox and Sinatra, by the way, are still listed as “qualifiers” on the casino license. They were both at Wynn Resorts when it applied for the license and failed to disclose the settlement to the manicurist.
No wonder Wynn Resorts defines Elaine Wynn’s campaign, which she calls “Restore Wynn,” as “noise” that should be disregarded. They claim they are leading a transformation to “Remake Wynn.” But you can’t remake Wynn with the same old players, Elaine Wynn included. Although she seems far from ready to deal herself out.