HOUSE ALWAYS WINS
Casino Mogul Steve Wynn Won’t Let His Ex-Wife Control Her $1 Billion in Stock
The man behind the Mirage, Bellagio, and self-titled Wynn put a hammerlock on his wife’s shares and he won’t let go.
For four decades the Wynns set a standard for style in Las Vegas, a place rarely known for it. Steve was the dashing Vegas visionary with the dazzling smile who turned big dreams into bigger scores with The Mirage, Bellagio, and finally Wynn Las Vegas. Elaine brought a sense of grace to their game—and grew into her own as a co-founder of the company and member of its board of directors.
That’s all over now since Wynn and his wife divorced in 2010. They split the sheets and Wynn Resorts stock worth billions, but a shareholder agreement that year gave Steve proxy control over Elaine’s nearly 10 percent—a piece worth approximately $1 billion. An original member of the board of directors, she remained active and increasingly vocal. And she didn’t flinch when her ex-husband in April 2011 married British beauty Andrea Hissom in a celebrity-splashed service at Wynn Las Vegas that featured Clint Eastwood in the role of best man.
Elaine Wynn also watched as Steve Wynn’s attorneys applied a legal hammerlock on his longtime Wynn Resorts partner Kazuo Okada and forced the Japanese slot manufacturer to sell off his 20-percent stake in the company. That litigation continues.
In 2015, it was Elaine’s turn to be shown the door. Although her ex-husband sided with her, a move that these days her lawyers consider little more than corporate stagecraft, after 13 years she was voted off his hand-picked board of directors. She was the third-largest shareholder of Wynn Resorts, but suddenly the woman Fortune called the “irrepressible first lady of Las Vegas” had no voice in the company.
In a revealing interview with the business magazine during the proxy fight, Elaine described her position on the board as “my heart and soul and my life’s work and my professional career. It represents the most significant portion of my net worth. And I have earned the right to stay on the board and oversee the next phase of dynamic growth.”
The board did not agree. The private war of the Strip’s one-time power couple went public with a March lawsuit brought by Elaine aimed at regaining control of her shares. Her attorneys allege Wynn Resorts is being damaged by the “reckless activity of the CEO and others in the company.”
It’s a charge Steve Wynn has denied and then some. In the Wall Street Journal he compared his ex-wife’s legal action to the bitterness displayed in the 1989 divorce-themed War of the Roses. He positioned himself as cool and unfazed, “There will be comeuppance for that as you will see shortly. I’ve tried everything under the sun to help out, and nothing has worked. That’s not unusual in the world of divorces.”
The civil case is a long way from trial, but Elaine Wynn on Sunday scored a victory in the court of public opinion when The New York Times published its annual analysis of CEO compensation and corporate performance and ranked Steve Wynn among America’s highest paid bosses. Total compensation in 2015: $20.68 million. (That’s actually a 19-percent decrease from the previous year.)
The bad news? Due in large part to a reversal of fortune in Macau, the company lost half its value with total shareholder return down 51 percent.
Nor, in the 21st Century, would it seem unusual for a former spouse and member of the board of directors of a publicly traded company to want control over her shares in the company she helped found. She accuses him of attempting to exert “full and perpetual control” of her life and legacy.
Elaine’s spokesman jabs, “Mr. Wynn’s demeaning, personal attacks on Ms. Wynn cannot distract from the serious problems with corporate governance at Wynn Resorts. Ms. Wynn filed her claims to protect her hard-earned interests in Wynn Resorts—a company in which she is the third largest shareholder, that she co-founded and that she spent more than a decade building.”
The litigation has Wynn’s board of directors, which includes former Nevada Gov. Bob Miller and ex-petroleum industry titan Dr. Ray Irani giving depositions. Although Steve was recently seen in a paparazzi photo looking a little like a Vegas superman as he prepared to try out a zip line above downtown’s Fremont Street, he has yet to sit for a deposition.
The litigation is especially nasty given the Wynns’ back story. Together they rose to the top of the Strip’s elite and made a difficult comeback after Wynn’s business bravado backfired and he was forced in 2000 to sell the company for $4.4 billion to MGM Grand and understated billionaire Kirk Kerkorian.
That embarrassing setback brought predictions of demise of Wynn’s business career, but it appeared to bring out the best in Steve and Elaine. In swift order they teamed with Okada and rolled out Wynn Resorts, which transformed the classic Desert Inn property into the upscale Wynn Las Vegas and later entered the risky but extremely lucrative Macau gaming market.
Steve Wynn and Elaine Pascal married in 1963 in Miami Beach. They moved to Las Vegas three years later and eventually produced two daughters. In a move never made clear but one that gave rise to all manner of speculation, the couple divorced the first time in 1986 but never separated. They remarried in 1991 and hammed it up for the media. “Steve just never got around to moving out,” Elaine said in an Associated Press story. As if on cue Steve added, “We regret to say that the divorce just didn’t work out.”
By then she was often depicted in profiles as the brash casino king’s sounding board and ultimate confidant. She was also gaining her own independent voice in the chauvinist’s paradise. She focused on improving the academic reputation of a careworn University of Nevada Las Vegas and Nevada’s public education system, eventually pushing for reform and serving on the state board of education.
Singer and Las Vegas icon Phyllis McGuire had known the couple for decades when she observed in a 2006 New York Times interview, “She was like a willow, beautiful and blowing graciously toward her husband. She was totally 100 percent behind her husband. She was totally 100 percent behind her husband. That’s not as true anymore. She’s more her own person. Many things she will openly disagree with him about. I think he’s very dependent on Elaine, but intellectually she’s not going to be dominated anymore.”
Known for possessing a wandering eye along with his diagnosed retinitis pigmentosa, tales of Steve Wynn’s extramarital activities were commonplace on the Strip, a place not exactly known for promoting monogamy. Through the years, his wife remained unflappable.
“We have had a peculiar relationship,” she told Fortune in the days leading up to her board ouster. “We have been married and divorced, married and divorced, but we have been partners all our lives. We have been together since we were 18 years old. Well, he was 19 when I met him. I was 18. And nobody knows this man better than I do. And even though we have had a nontraditional marital situation, we have had a perfectly wonderful working relationship. As a matter of fact, we opened the Mirage together [in 1989] when we were divorced.”
It’s 2016. Their marital and business partnerships severed, Steve and Elaine are once again divorced.
And this time, it’s definitely personal.