May 14, 2018 - 3:00 pm
Wynn Resorts legacy directors have gotten the message: They are not wanted.
John Hagenbuch announced Monday he won’t run for re-election at Wednesday’s annual shareholders’ meeting amid growing investor opposition to his candidacy.
Simultaneously, Bob Miller, the longest serving board member, announced he had resigned effective immediately. Miller, who joined in 2002, was slated to end his term in 2020.
Hagenbuch stood to become the first Wynn Resorts board nominee to be rejected by shareholders at the annual meeting. His election was seen as a referendum on all long-serving board members.
“I do not want my candidacy to detract from the important progress we have made throughout the organization, including the ongoing refreshment process this Board has initiated,” Hagenbuch said in a statement Monday.
Six of the 10 Wynn directors serving on the board at the start of the year have now announced their departure since late January, when allegations first emerged that founder and former chairman Steve Wynn sexually harassed female employees over decades.
Steve Wynn stepped down in February, Ray Irani left in March and J. Edward Virtue announced last month he would retire when his term ends on Wednesday. Alvin Shoemaker announced he would step down when his term ends in 2019.
The eight remaining board members will interview candidates to fill the newly vacated spots and could choose independent directors or company executives. There is no time frame to fill the seats, said Wynn spokesman Michael Weaver.
The Wynn Resorts board has faced intense criticism and calls for resignation ever since the sexual misconduct allegations emerged as well as allegations that attempts to bring his behavior to the attention of executives fell on deaf ears.
Investor lawsuits filed against the company since February claim that Wynn legacy directors should have been aware of the allegations and failed in the fiduciary duty to protect the company. The directors were too beholden to Steve Wynn through personal and business relationships, the lawsuits claim.
Elaine Wynn, Steve Wynn’s ex-wife and the company’s largest shareholder, called on investors last month to send a message to legacy directors by withholding votes for Hagenbuch at the May 16 annual shareholders meeting.
Hagenbuch, who has served as a director since 2012, is a close friend of Steve Wynn and was personally chosen by the casino founder to join the board.
Institutional Shareholder Services and Glass Lewis, two prominent stockholder proxy firms, scorned the legacy Wynn directors in reports published earlier this month. Both recommended investors vote Hagenbuch off the board at the annual meeting.
“Hagenbuch was part of a legacy board that oversaw material failures in governance and risk oversight,” Institutional Shareholder Services said in its May 5 report. “Given that the benefits of his continued presence on the board do not seem to outweigh the risks associated with permanence, shareholders are recommended to withhold votes for Hagenbuch.”
Hundreds of institutional investors managing mutual funds, hedge fund and index funds follow the recommendations of Institutional Shareholder Services and Glass Lewis, setting Hagenbuch up for a likely defeat at the May 16 election.
No director nominated by the Wynn board had ever been defeated in a shareholder vote.
“The shareholders have spoken. The resignations today of Hagenbuch and Miller represent a good step towards establishing the ‘New Wynn,’ but there remains work to be done,” Elaine Wynn said in a statement.