Elaine Wynn says she knew nothing about nephew’s land deal

Elaine Wynn waits to be introduced during a Las Vegas Metro Chamber of Commerce Business Power Luncheon at the Rio Wednesday, May 8, 2013.

Elaine Wynn, maintaining her fight to stay on the board of Wynn Resorts, said today that the company’s latest accusations against her are a factually baseless ploy to instigate tension between her and stockholders.

In an attempt to “set the record straight,” Elaine Wynn wrote a letter to stockholders in which she rejected recent claims from the company, including that she should have recused herself from certain discussions about acquiring land and that her personal foundation sold stock at an inappropriate time.

Wynn Resorts told stockholders Tuesday that Elaine Wynn, the ex-wife of CEO Steve Wynn, participated in meetings “over the course of several years” that involved plans to possibly acquire more land on the Strip. That land, where the New Frontier once stood, was eventually acquired by a group that includes Elaine Wynn’s nephew, former Wynn Resorts executive Andrew Pascal.

While the company suggested Elaine Wynn should have recused herself from those talks, she said today that she had no reason to do so because she didn’t know that her nephew was involved in a competing bid.

She said she twice told independent directors that she was unaware of the land purchase and that the board is now attempting to oust her over reasons “made up out of the whole cloth.”

“This allegation is just another example of the reckless lengths to which the board is willing to go to exclude me as a director,” she wrote in the letter.

“The absurdity is, of course, that not only did I have no knowledge of or involvement in this land deal, but any such action to help my nephew’s group would actually have been directly contrary to my own financial interests since my net worth is linked to the success of Wynn Resorts,” she said.

The company also accused Elaine Wynn of taking the view that “her personal foundation is not subject to the company’s insider trading policy” when the foundation sold $10 million of stock during a “blackout period” just before company earnings were announced.

Elaine Wynn told stockholders that the suggestion of a conflict of interest there is “wholly without merit.”

She noted that her foundation is an independent organization run by its own board that has a “long-standing protocol” in which she is recused from “all foundation matters relating to its ownership of company shares.” She said the company was “fully aware” that the foundation sells shares each year, with the proceeds going to philanthropy.

Elaine Wynn said that the Wynn Las Vegas general counsel knew the foundation was selling shares during the blackout period “and in fact sent an instruction letter to the company’s transfer agent to help consummate such sale.”

“The sudden suggestion that this sale is somehow improper is a baseless allegation to distract stockholders from the important issues at hand,” she wrote in the letter.

One of Elaine Wynn’s central arguments against her removal has been that she is the only female board member, and thus provides a crucial diverse perspective.

Yesterday, Wynn Resorts tried to dismiss that concern by promising stockholders that it will name “one or more diverse directors” to the board by the end of the year.

But Elaine Wynn essentially said that promise is too little, too late and that the board’s actions “belie this new-found commitment to diversity.”

If the board really valued diversity as much as it says it does, it would have added more women to its ranks in recent years, she said.

Another main point of contention has revolved around a lawsuit Elaine Wynn filed against Steve Wynn over a stockholder’s agreement that limits her ability to sell shares. The company has said that suit interferes with her work in the boardroom; she says it doesn’t.

Yesterday, the company said that, when a board committee was looking at restructuring Steve Wynn’s compensation, she sought an amendment to the agreement to increase the amount of stock she can sell.

But Elaine Wynn said she supported Steve Wynn’s equity compensation package and noted that under the agreement, he can’t sell stock without her consent.

“All I did was reject a suggestion that Steve be given one-sided relief from the consent requirement while I remained fully bound; instead, I preferred to reach a mutual global resolution,” she wrote in the letter.

A Wynn Resorts spokesman said the company stands by its communication with stockholders yesterday.

The public feud between Elaine Wynn and Wynn Resorts has been playing out ever since the company revealed several weeks ago that it wouldn’t renominate her to the board. She then launched her own campaign to keep her seat.

The fight should be resolved at an April 24 stockholders’ meeting.

Gaming

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