Steve Wynn resigns as chairman and CEO of Wynn Resorts

Wynn Resorts founder Steve Wynn has resigned from his position as CEO and chairman, effective immediately, though analysts say his departure doesn't end the uncertainty facing the company.

The departure of the gaming veteran comes amidst an investigation into his alleged sexual misconduct with employees during his role at the helm of the company.

"It is with a collective heavy heart, that the board of directors of Wynn Resorts today accepted the resignation of our founder, CEO and friend Steve Wynn," said non-executive director of the board Boone Wayson.  "Steve Wynn is an industry giant.  He is a philanthropist and a beloved leader and visionary.  He played the pivotal role in transforming Las Vegas into the entertainment destination it is today. He also assembled a world-class team of executives that will continue to meet the high standards of excellence that Steve Wynn created and the Wynn brand has come to represent."

"In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity,” said Wynn in a company announcement.

“As I have reflected upon the environment this has created — one in which a rush to judgment takes precedence over everything else, including the facts — I have reached the conclusion I cannot continue to be effective in my current roles.  Therefore, effective immediately, I have decided to step down as CEO and Chairman of the Board of Wynn Resorts, a company I founded and that I love.”

Replacing Wynn as CEO is Matt Maddox, who is currently president of the company. Boone Wayson will become the non-executive chairman of the Board of Directors, both effective immediately.

"The succession plan laid out by the Board of Directors and which I wholeheartedly endorse now places Matt Maddox in the CEO seat. With Matt, Wynn Resorts is in good hands. He and his team are well positioned to carry on the plans and vision for the company I created," said Wynn. 

Despite the new appointments, brokerage firm Bernstein Research on Wednesday said it maintained its long-term positive fundamental view on Wynn Macau. However, "uncertainties now stemming from Wynn's resignation make it difficult for us to encourage investors to buy the stock today. We would wait until more clarity comes out from his resignation, especially with respect to further management changes that may occur," said the firm. 

Bernstein also said that "time will tell" what Maddox will bring to the table.

"Our view is that Maddox has a good grasp of Macau operations and frequently visits the operations on the ground there. Further, he has been one of the closest executives to Steve Wynn and will likely try to maintain his vision and attention to hospitality and customer experience. However, the shoes of Steve Wynn will not be easy to fill. Even with Maddox at the helm, Wynn will likely become a somewhat different operation, but time will tell."

In regards to Wynn Macau, the brokerage noted that both Ian Coughlin (president, executive director) and Linda Chen (COO, executive director) retain their roles with the company.

UBS also concluded that doubts over the future remain.

"This announcement doesn't resolve uncertainty around whether outcomes here might potentially affect Macau in any way or increase risk to concession renewal there," UBS wrote in a note.  "The company has invested $6 billion there and has strong local management.  But it's difficult to quantify to what extent Macau might have weighed Wynn's leadership as being important to the concession process."

The firm says that based on prior situations, if findings of any inquiry lead to the need for Wynn to divest his shareholding, the regulators are likely to allow time for the sale to be done in an orderly fashion so as not to have a negative impact on other shareholders.

Wynn Macau has appointed Allan Zeman, a long-serving independent director and Vice Chairman of Wynn Macau, as non-executive Chairman.

"Dr. Zeman has been a resident of Hong Kong for over 30 year and is a well-connected (both commercially and politically). From a governance perspective, the appointment of Dr. Zeman is positive, in our view," said Bernstein. 

Details of Mr. Wynn's separation agreement is yet to be finalized. 

 

 

 

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