When Wynn Resorts Ltd. is brought before the Massachusetts Gaming Commission — probably next month — the entire board of directors may be on hand to answer regulators’ questions.
Wynn board chairman Phil Satre said the board and CEO Matt Maddox would present the company’s case for being found suitable to hold a gaming license once the hearing has been set. The company’s $2.5 billion Encore Boston Harbor project is set to open in June.
“If Wynn Resorts is going to make a bold move it must be done immediately because the importance of the (Massachusetts) gaming license cannot be overstated,” said Eric Rose, a California-based partner at crisis management firm Englander Knabe & Allen.
The adjudicatory hearing for Wynn Resorts is on hold until a lawsuit filed by Steve Wynn is resolved. The lawsuit was filed against his former company and Gaming Commission investigator Karen Wells over the alleged use of privileged attorney-client communications in the preparation of a report that is expected to focus on allegations of sexual harassment.
Steve Wynn resigned in February after the accusations emerged in several publications. He has denied those allegations.
Attorneys for Wynn Resorts, Steve Wynn and the gaming commission are scheduled to be in District Court Judge Elizabeth Gonzalez’s courtroom Thursday for an update on the case.
Regulators step in
Regulators in Massachusetts and Nevada got involved when it was disclosed that Steve Wynn paid a $7.5 million settlement to a female Wynn employee who made harassment accusations and the payment wasn’t disclosed in suitability hearings when Wynn was approved for licensing in 2014.
Once the hearing is set, Steve Wynn won’t be required to be there because the commission has determined he’s no longer a “qualifier” for licensing.
In an exclusive interview with the Review-Journal Tuesday, Satre said cultural and personnel changes within the company have created a “long-lasting foundation upon which we will build our future success.”
Changes included last week’s announcement that former Wynn Las Vegas President Marilyn Spiegel would return to the property in that role Jan. 2, replacing Maurice Wooden, who announced he is stepping down.
“I’m delighted with the changes and the evolution that we’re experiencing at the company,” Satre said. “We know we have to get past the regulatory environment that we’re dealing with right now and we’ll do our best to convince our regulators of our qualification, the changes that we’ve made and I would be remiss if I didn’t say I’m optimistic because I believe in the steps that have been taken.”
Satre said he was happy with the appointment of Spiegel, who he’s known since 1990 when they both were with Harrah’s Entertainment, a predecessor to Caesars Entertainment.
Reaching out to Spiegel was Maddox’s idea, Satre said, as have been many of the corporate and development maneuverings the company has made since Maddox was appointed to succeed Steve Wynn as CEO after he resigned in February.
“I think when the crisis began in January this year, the company, in retrospect, was very fortunate to have somebody who was as decisive and well-grounded and knew the steps that needed to be taken as Matt was,” Satre said. “If you compare the way we have reacted to that crisis as a company — and when I say ‘we,’ I didn’t join this company until the first of August — it is vastly different than what you’re seeing at CBS or Fox or other places that have had similar crises. Nobody moved as swiftly as this company did to take charge of the situation and react appropriately on behalf of the shareholders and on behalf of the employees and customers, and that begins with Matt Maddox.”
Satre is hoping the entire 10-member board — six of whom joined it in 2018, and four of whom are women — will be at the hearing.
Big board presence
“It’ll actually be Matt (Maddox), myself, probably several other board members,” Satre said. “It will involve the senior level managers and executives out of our Las Vegas headquarters and their counterparts at Encore Boston Harbor. We’ve actually asked the entire board be present at that hearing. Because we don’t know the exact date we can’t promise we’ll have everybody because people do have commitments that they’ve probably made serving on other boards and their own businesses that they run.”
Rose said a strong showing of board members at the hearing would “show regulators that there’s a new sheriff in town — that there’s a new senior management team that doesn’t look like or reflect the values of Steve Wynn,” he said, referencing the new women named to the board.
“It’s a remarkable not only public relations move, but also a shrewd business move that will demonstrate to regulators that the management team looks different and is different and they can be confident in finding the operator suitable for a license,” he said.
Getting the harassment boot
The number of chief executive officers who have left their positions through November this year is 24.2 percent ahead of the number who left in the first 11 months of 2017, according to executive coaching firm Challenger, Gray & Christmas Inc.
At least eight CEOs have left their posts due sexual misconduct allegations so far, according to the firm.
“We’ve seen a number of CEOs removed from their companies due to inappropriate behavior or conduct in violation of companies’ codes of ethics,” said Andrew Challenger, vice president of the company.
“In light of the #MeToo movement, companies are not taking any chances with leaders who engage in these kinds of activities,” he said. “It not only harms companies’ brands and reputations, it very much impacts current and future employees, productivity, work environment, and culture.”
Overall, the company said 1,323 CEOs have retired, resigned or were removed from their positions so far this year. Through November last year, 1,065 CEOs had left.