A few questions remain about Tuesday’s surprise announcement that Wynn Resorts Ltd. CEO Matt Maddox is leaving the company.
Why is he departing? What will he do next? Will the transition to the company’s next CEO, Craig Billings — currently CEO of Wynn Interactive and who has served as president and chief financial officer of Wynn Resorts — be a smooth one?
Just before the Tuesday earnings call, the company announced that Maddox would leave the company Jan. 31 and that Billings would take over as CEO on Feb. 1.
As for why Maddox, 46, is leaving and what he will do next, there weren’t many answers when he addressed gaming industry analysts on a conference call on third-quarter earnings Tuesday afternoon.
“This has not been an easy decision,” Maddox said. “I am leaving a company that I love and that’s full of people I admire. But I believe now is the right time for me and for the business.”
What the departure seems to amount to is that after being at Wynn Resorts since Steve Wynn’s founding of the company in 2002 and serving as Wynn’s right-hand man for a decade and a half, including a key on-the-ground role in Macao, Maddox was ready for something new.
Then, after weathering the succession shock wave, Maddox was thrown a pandemic.
“The last four years have been challenging but extremely rewarding, and I am incredibly proud that we accomplished so much,” Maddox said. “We quickly resolved litigation that had distracted the company for seven years. We reorganized the company’s leadership team and focused on our 28,000 employees, rebuilding and strengthening our powerful culture to focus on a common purpose: create and deliver the best guest experiences.”
Maddox was referring to the resolution of lawsuits between Steve Wynn and former Wynn business partner Kazuo Okada.
Then came the pandemic, from which, by two years of earnings numbers, the company has yet to fully recover. Still, Maddox believes he and the company have done well by other metrics.
“We led the industry with our response to the pandemic and many other industries looked to us for advice, guidance and leadership as a result,” he said. “I knew our biggest asset is our people, which is why we paid them throughout the shutdown and why our culture has never been stronger. That investment is now paying off as Wynn Las Vegas and Encore Boston Harbor are generating more profit and market share since we opened our resorts, all while maintaining five-star service levels.”
“Matt’s strategy to confront the pandemic and its economic impact on the company proved to be the correct one: make decisions focused on the welfare of employees, guests and communities, and, invariably, the business and its shareholders will reap the rewards,” said Phil Satre, the chairman of Wynn’s board of directors, in a company statement.
“He was a leader in the recovery of the Nevada hospitality industry, and his leadership in this area was recognized nationally as well,” Satre said.
Few clues on what’s next
As for what he intends to do after he leaves Wynn, Maddox has left very few clues, telling analysts he has “a few things lined up.”
One of those things will be to help the company renew its concession in Macao, a process expected to move past the current information-gathering level next year. Company officials are confident Wynn will still be operating in Macao when the concession review period concludes.
“I look forward to serving on the Wynn Macau board throughout 2022 to assist with the concession renewal and help solidify our place as the premium operator in the region,” Maddox said.
The transition from Maddox to Billings appears to have a clear path and analysts are confident in Billings’ track record.
“We believe the departure of Mr. Maddox will come as a surprise to most, though we also believe both the sell-side and institutional investor community have a knowledge of and a respect for the strategic and business acumen of the incoming CEO, Craig Billings,” Carlo Santarelli, a gaming industry analyst in the New York office of Deutsche Bank, wrote in a note to investors Tuesday.
“As such, barring conspiracy theories around the departure of Mr. Maddox, most notably the implications for the Macao process, of which we think there are virtually none, we expect a smooth transition,” Santarelli said.
Investors didn’t appear to be rattled too much based on Wynn’s Wednesday stock market performance on the Nasdaq exchange. Wynn shares fell $2.10, 2.2 percent, to $92.02 a share on volume nearly twice the daily average.
Maddox remains comfortably confident.
“I am grateful to the board for their faith in me and the support and insight they have offered me as CEO,” he said. “I am very pleased with the board’s decision and know I am leaving Wynn Resorts in great hands with Craig, as well as the entire management team.”