After Steve Wynn resigned Tuesday from his eponymous hotel company amid allegations of sexual misconduct, he’s still likely to reap the benefits that come with having your name on the front door, not to mention on resorts and casinos around the world.
Having served as CEO and chairman of Wynn Resorts (WYNN) since 2002, the billionaire mogul has agreements in place that could force the casino operator to pay him a sum of money hefty enough to sustain the economy of an island nation. Steve Wynn, whose net worth is already estimated at $3.4 billion, may collect more than an additional $330 million for stepping down—even though he did so under fire of sexual harassment accusations.
Wynn said he felt compelled to resign due to “an avalanche of negative publicity” in the wake of a January Wall Street Journal article, which alleged decades of sexual misconduct, including pressuring an employee to have sex with him. Though Wynn denies the accusations, he said in the statement that, “I have reached the conclusion I cannot continue to be effective in my current roles.”
As the founder of Wynn Resorts, however, Steve Wynn’s longstanding employment agreement provides for a massive severance package if he is terminated “without cause,” or by his own volition “for good reason.”
Not only has Wynn Resorts promised to pay its top executives their salary and bonuses for each year remaining in their contracts, the CEO has a special agreement that gives him a big extra boost: Steve Wynn is entitled to receive triple his annual allotment for a maximum of four years.
Because Wynn’s employment contract extends through the fall of 2022, he could receive three times his annual salary and bonus for the next four years. That means his salary of $2.5 million would balloon to a payout of $10 million, and his latest bonus of $25 million (split evenly between cash and stock) would multiply to $300 million—adding up to a total of $330 million. On top of that, the executive is owed $232,971 in benefits, according to Wynn Resorts’ latest disclosures.
The sum is greater than the gross domestic product of Micronesia. That doesn’t even include the magnate’s nearly 12% stake of Wynn Resorts stock, worth nearly $2.2 billion at current prices.
One caveat: It’s not yet clear whether Wynn’s resignation will meet the conditions required to receive the full payout. The billionaire’s severance agreement stipulates that his employment be either “terminated without cause” by the employer, or by him with “good reason” after a so-called change in control, which could be if Wynn Resorts was acquired, but also if the company’s “existing directors…cease to constitute a majority of the board.”
Still, Steve Wynn is likely to depart far from empty-handed. “Details of Mr. Wynn’s separation agreement will be disclosed when they are finalized,” a spokesperson for Wynn Resorts said in a statement. But asked whether there was any reason that the $330 million severance provisions would not apply, the spokesperson did not respond.
It may also be difficult for Wynn Resorts to avoid paying up by terminating its founder for cause. In past company scandals, executives’ resignations have sometimes been retroactively converted to termination “for cause”—such as in the case of former Wells Fargo executive Carrie Tolstedt, who was blamed for the bank’s fake accounts fiasco. But Wynn Resorts’ policy defines “cause” rather narrowly, such as committing fraud or being convicted of a felony. The broadest clause would require proving that the CEO failed “to follow a material policy or procedure,” resulting in “material harm to the company” or its reputation.
And the executive may also be able to argue that he has good reason to resign due to a change in control, especially if the Wynn Resorts board sought to scale back his responsibilities due to the accusations. The Wynn board members, who are conducting an independent review of the misconduct allegations, are also expected to face pressure to step down, which could constitute a change in control. Following revelations of Hollywood mogul Harvey Weinstein’s sexual misconduct in October, the majority of the Weinstein Company’s board resigned.
So far, though, Steve Wynn appears to be leaving his company on a friendly basis, which may help him negotiate a generous severance package, even if it ends up being less than he’d have received under more normal circumstances. “Steve Wynn is an industry giant,” Boone Wayson, a director on the board of Wynn Resorts, said in a statement announcing the resignation of the founder and “friend,” adding: “He is a philanthropist and a beloved leader and visionary.”
Indeed, inside Wynn Resorts, there was little reason to think that the CEO would leave on anything less than the best terms, according to a report in the Journal: Steve Wynn even attended a company Super Bowl party on Sunday.