New Wynn Resorts CEO Matt Maddox wasn’t whimsical or comical as his predecessor, Steve Wynn, often was at the Massachusetts Gaming Commission (MGC) last Friday, April 27, during an intense Adjudicatory Hearing.
Instead, in what seemed like a high-stakes job interview, Maddox set a path as “a small-town kid from Arkansas” who is trying to move the company onto a new path of – rather than wisecracks – family values and gender equality.
It was nowhere more apparent than when MGC Commissioner Gayle Cameron led off with a critical observation of how the Wynn company had gotten in trouble based on allegations of sexual misconduct, and then added three women to its board.
Maddox swung back with a firm response, noting he is from a new generation, and he intends to use this crisis to become a leader in the industry in correcting the issues that landed them in their predicament.
“These women are imminently qualified,” said Cameron. “You’ve been at the company many years. They were imminently qualified two years ago, five years ago. I just have to make the point that there’s an issue around women, and now women are more valuable to the board. I see what you’re doing, but it just seems to me the company as a whole didn’t value women until they got in trouble at the Board level.”
Replied Maddox, “Mrs. Cameron, maybe that’s because there’s new leadership. I’m a 42-year-old man. I have a 12-year-old daughter, a 10-year-old daughter, and a 10-year-old son. If you think for one second that I want my 10-year-old son to have any additional benefits or a better environment in the workplace than my (daughters), that’s not true. I am part of the generation that believes this. I’m part of the generation that’s driving this. So, I don’t think it’s anything about what the company did do or didn’t do. Crisis sometimes creates opportunity. You can let crisis drive you down or you can take it and make something great out of it. That’s what I’m committed to do.”
Later, he told reporters that he was to be trusted to lead the company in a new direction.
“You should trust me because of what I’ve done my whole career,” he said. “Check with anyone I worked with at Bank of America or Caesar’s Entertainment. For people who have work with me while I’ve been at this company 16 years, you are going to hear that I do what I say. I’m a small-town kid from Arkansas. I grew up in a place where family and community values matter. It’s who I am and I would challenge anyone to come out and say that’s not who Matt Maddox is.”
Beyond getting to know Maddox, and the personality of the new leader of the $2.5 billion Everett resort casino, the business of the day was to discuss whether or not to remove Steve Wynn from the paperwork of the gaming license in Massachusetts. Several lawyers and company executives were present to help that along, and reams of paperwork had been filed that analyzed the types of “qualifiers” and what that meant by the letter of the law.
In legal terms, most of the obvious moves had been taken care of, such as Steve Wynn no longer having a stake in the company and direct decision-making. However, the MGC was interested in looking at any indirect influence that might occur as well.
So it was, Maddox spent a good part of his 45-minute presentation explaining what he had done since becoming CEO in February.
He said he first had Town Halls with employees around the world to assure them it was a strong company, and to begin a new campaign called ‘We Are Wynn’ to reinforce the new values he planned to bring to the scarred ‘Wynn’ name.
“It was a time of crisis and people were completely unsettled,” he said. “I reminded them this company is not about a man and hasn’t been for 18 years. Steve Wynn is not Wynn Resorts. Wynn Resorts is about 25,000 employees and the people who grow this company every day…That’s what it represents.”
At the same time, he said they began working on things that were dragging the company down, including billions of dollars in litigation that had lingered between Steve Wynn and Universal Entertainment of Japan.
“We realized we had to quickly distance ourselves from issues that had mired the company with litigation and founder-based issues that really never would allow our company to move forward,” he said. “The first thing I wanted to do was get rid of the billions of dollars in litigation that existed between Universal Entertainment and Wynn Resorts because that existed between two founders, not two companies.”
In the end, they met in Hawaii and in two days settled the matter for $2.4 billion, which wiped away all claims.
He said the next matter was to convince Steve Wynn to sell his 12 million shares. However, when he first called Wynn to convince him not to sell them on the open market, Steve Wynn did just that.
“The first thing I did was call Steve Wynn,” he said. “I didn’t talk to him about business, but I called him and I said his 12 million shares needed to go into strong hands to save this company. We couldn’t have it dumped into the market and into hedge funds and create more chaos. Out of the 12 million shares, he sold 4 million shares immediately…into those exact hands – the markets and hedge funds. It was a really contentious day. I immediately went out and found Capital Research…and T. Rowe Price…and worked carefully with them and they agreed to take Steve Wynn’s remaining 8 million shares…so the company could have strong shareholders.”
That, he said, put 13 percent of the company’s shares into the hands of three solid investors – which also included Galaxy Entertainment of China. That, he said, happened in 60 days.
“While it may feel like things aren’t moving fast; they’re moving at lightning speed,” he said. “The changes we’re making to distance ourselves from our former chairman and CEO and to focus on the future.”
Wynn Legal Counsel Kim Sinatra said there are going to be more changes to the board this summer. The recent additions and departures are only the first step.
“The bylaws require us to have 7-13 Board members,” she said. “There isn’t a static number. I do know there will be additional changes to the board, and this was just a first step. The idea is to make an orderly transition. This is about as much as a publicly traded company can take at one swath.”
There has been a process put in place too, she said, that requires senior leadership and board members to report any contact they’ve had with Steve Wynn in writing.
Other things they’ve done include starting a Cultural and Diversity Department, and instituting leadership development and a women’s forum.
They have also reprogrammed their sexual harassment training, using a third party to do those trainings instead of having employees teach employees.
And first and foremost, Maddox said it started with him. That was evident on the new banners outside the Everett site, where pictures of employees are shown prominently.
Maddox is also shown, but he isn’t any bigger than the others and he isn’t labeled as the CEO. His moniker is only ‘Leader.’
“It starts with me, right at the top,” he said. These are things I’m leading on…As CEO, I can tell you there is no association with Steve Wynn. There is no business association with Steve Wynn. I’m my own man. Kim Sinatra is her own woman. We are moving this company forward…We’re taking these issues very seriously.”
An MGC decision did not come immediately, though the Commission deliberated after Friday’s meeting in private. A decision is expected at the end of this week.