If you thought the sexual harassment allegations against Steve Wynn were horrendous, wait till you read the lawsuit filed February 7 accusing him and his compliant board of excess pay and benefits. The Nevada Independent has posted a copy of the 42-page suit.
Most of the claims in the suit by shareholder Norfolk County
Retirement System, filed in Clark County District Court, have been reported at one time or the other but the compilation is eye-opening.
The suit accuses Wynn, his board and company executives of poor corporate governance and breaches of fiduciary duty at the expense of shareholders.
The suit notes, for example, that Institutional Shareholder Services, Inc. has recommended withholding votes to re-elect members of the Wynn compensation committee, citing “Wynn’s sizable pay packages compared with other CEOs and a severance agreement equating to $330 million that ‘exceeds the upper parameter of acceptable amounts,’ according to
a report from ISS last year. Glass Lewis & Co, another advisory firm, also recommended that shareholders vote against the Company’s compensation package, citing ‘poor overall design’ and ‘performance disconnect.’ In fact, Glass Lewis gave the Company an ‘F’ for its pay-for-performance practices for the last two years.”
This past year ISS gave Wynn Resorts its worst ranking for governance risk.
The suit also recounts that the company leases Wynn’s personal art collection for $1 a year, but pays the cost of insurance, security and taxes.
Of course, it also relates the recent allegations of sexual harassment against Wynn, noting the board’s knowledge of and lack of action. The suit says that Wynn’s former wife Elaine Wynn’s lawsuit “accuses Mr. Wynn of using the Company ‘to fund his lavish lifestyle and personal politics’ and displaying ‘reckless risk-taking behavior’ that places the Company in jeopardy and has exposed it to legal challenges. Thus, regardless of whether Mr. Wynn initially concealed the settlement and allegations of egregious misconduct involving the Company, the Board knew of the settlement and allegations of patently egregious misconduct involving the Company by at least 2015 and failed to act and continued to support and recommend to the stockholders Mr. Wynn’s
continued leadership and compensation. The Board knowingly failed to investigate the allegations of patently egregious misconduct by the Chairman and CEO and Mr. Wynn’s suitability for his fiduciary positions and regulatory compliance and his suitability as a gaming operator. Knowing failure to act by the Board on the allegations of such egregious misconduct involving the Company constituted a knowing
and intentional violation of its fiduciary duties to the Company for which the Director Defendants are liable.”
Wynn’s current employment agree, the suit notes, runs till 2022 and pays him $2.5 million a year.