Wynn Resorts Extends CEO Maddox Through End of 2022, Alters Stock Compensation to Performance-Based

Posted on: December 17, 2019, 03:40h. 

Last updated on: December 17, 2019, 04:18h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Wynn Resorts, Ltd. (NASDAQ:WYNN) said its board of directors unanimously voted to extend CEO Matt Maddox’s employment contract through the end of 2022.

His initial employment agreement had a termination date of Feb. 27, 2021, but that has been amended to Dec. 16, 2022, according to a company filing with the Securities and Exchange Commission (SEC).

He has rebuilt a solid strategic plan and capital foundation which now positions Wynn Resorts to enjoy what the Board of Directors and I believe will be a period of remarkable growth and success,” said Wynn Resorts chairman Philip Satre in a statement.

This year will mark the first full year Maddox has led the operator of its namesake Las Vegas Strip venue, as well as the Encore and Encore Boston Harbor. Shares of Wynn are up nearly 35 percent year-to-date, topping rival Las Vegas Sands (NYSE: LVS) while slightly trailing MGM Resorts International (NYSE:MGM).

By market value, Wynn is the third-largest domestic gaming company behind Sands and MGM.

Dealing With Controversy

Maddox was appointed chief executive officer of Wynn Resorts in February 2018 after Steve Wynn was removed amid a cloud of sexual misconduct allegations.

Maddox was hired by Wynn himself in 2002, rising through the ranks to become chief financial officer in 2008 and then president in 2014. While the company has worked to distance itself from its founder, some investors and gaming regulators were confounded by the decision to elevate Maddox, a Wynn protege, to the company’s top spot.

Those concerns were amplified earlier this year when, prior to the opening of Encore Boston Harbor, the Massachusetts Gaming Commission (MGC) pressed Maddox and other executives about their knowledge of Wynn’s alleged sexual misdeeds and ill-treatment of female employees.

Initially, Maddox denied knowledge of his mentor’s improprieties, prompting some MGC to excoriate him at the hearings. The MGC would later levy a $35.5 million fine against the company, including a $500,000 penalty aimed directly at Maddox.

The gaming company later considered a sale of Encore Boston Harbor to MGM before eventually opening its first ex-Las Vegas US property in late June.

From Feb. 7, 2018, the date Maddox became CEO, through Dec. 31, 2018, shares of Wynn Resorts tumbled 44.22 percent, as some investors brought lawsuits against the company, and as Steve Wynn liquidated his stake in the firm he launched.

Performance Clause

Wynn’s stock has bounced back this year, but is still in the red since Maddox took over as CEO. His new employment agreement provides for the award of 100,000 restricted shares if certain, unidentified performance metrics are met.

Vesting of the Performance Shares will be subject to the achievement of pre-established financial performance and strategic goals over the next three years, instead of vesting solely on the basis of continued employment,” according to the SEC filing.

Last year, Maddox earned a total of $17.12 million, of which $1.90 million was salary and $12 million in equity-based compensation.

Other Challenges

Maddox has a full plate entering 2020. Wynn is trying to navigate a slump in gross gaming revenue (GGR) in Macau, the company’s most important market, while engineering a bid to be one of the initial winners for an integrated resort license in Japan.

Additionally, the company faces a spate of civil litigation brought by former female employees stemming from Steve Wynn’s alleged improprieties.

Then there is Maddox’s relationship with Elaine Wynn, Steve’s ex-wife. Rumors have swirled that Elaine isn’t a fan of Maddox, and is irked by the fact that she doesn’t have a board seat, although she’s one of the company’s largest individual shareholders.