Even in a city known for glitz and glamour, Steve Wynn stood out. He leaves the gambling empire he built in the hands of a man who spends his days out of the spotlight.
As the new chief executive officer of Wynn Resorts Ltd., Matt Maddox will face some tough challenges right out of the gate. Top among them is how to separate Wynn the brand from Wynn the man. Before announcing his exit as CEO on Tuesday, Steve Wynn was fighting accusations of sexual harassment that had triggered probes from Nevada to Macau and threatened to derail licenses for new projects.
Maddox, a small-town native and former banker, won’t have much time before he must decide if the Wynn formula can keep working or – as some analysts speculate – whether to entertain buyout offers.
Here are five things investors may not know about the casino industry’s newest titan:
HE’S NO SIN CITY NATIVE
Maddox, 42, has been at Wynn since its inception 16 years ago. He’s a familiar face to investors, having previously served as chief financial officer and as president for the past four years. Maddox was already on a short list of potential internal successors to Steve Wynn that also included Linda Chen, chief operating officer of Wynn Macau, and Ian Coughlan, president of Wynn Macau.
Maddox is “very competent and has essentially been running day-to-day operations for some time,” says Adam Trivison, an analyst with G.research Inc.
Prior to Wynn, Maddox worked for Caesars Entertainment Corp. in corporate finance.
Maddox grew up far from Sin City. His family is from Mena, Arkansas, a town of about 5,600 people on the border with Oklahoma. He studied at Southern Methodist University in Dallas, according to the the Las Vegas Review-Journal. His father is a lawyer who runs a practice in Mena.
HE’S A FORMER BANKER
Before joining the casino industry, Maddox worked as an investment banker brokering deals at Bank of America Securities. His experience was an asset as he helped secure financing for Wynn’s projects in Las Vegas and its liftoff in Macau, said David Bonnet, partner at Delta State Holdings Ltd. and former casino executive in Macau.
HE WAS A MACAU VISIONARY
Maddox is credited with building up the company’s Macau operations, the only China-controlled region that allows gambling. Macau now accounts for more than three-quarters of Wynn’s earnings.
“Macau was like the Wild West,” said Bonnet. “No one knew how big the market would be. Matt definitely was instrumental to guide the strategy of Wynn Macau in a very dynamic environment back then. He would be a natural fit to make sure that they can execute their strategic initiatives.”
While Wynn has two properties each in Macau and its home-town of Las Vegas, gamblers in the Asian gambling enclave tend to spend a lot more at the VIP tables than their American counterparts, making the region a top priority for operators.
“Maddox’s been there from the beginning,” Bonnet said. “He’ll have a good understanding of the strategic direction of the company.”
HE MAKES A LOT LESS THAN STEVE WYNN
Maddox is entitled to $4.5 million in annual target compensation, consisting of $1.5 million in salary and a $3 million long-term award linked to performance. That’s far below his previous boss, who had a target pay of $27.5 million. Maddox also got restricted stock worth $19.2 million last year after signing a new employment contract that runs through 2019.
HIS JOB WON’T BE EASY
Right away, Maddox will have to navigate a few key issues, says G.research’s Trivison. To name a few: deciding the extent of future development in Las Vegas; maintaining Steve Wynn’s operating discipline; maintaining morale among employees; and potentially fielding M&A offers from interested parties, Trivison said.
One of the first potential hurdles Maddox will face is whether regulatory and licensing agencies will hold up the approval process on some of Wynn’s projects.
Regulators in both Massachusetts and Nevada have been conducting reviews of the sexual harassment allegations against Steve Wynn, which he denies. Macau’s government also has talked with Wynn management to make sure major shareholders, directors and key employees meet suitable qualifications, gaming officials said last month.
Easing their concerns is monumental as Maddox takes the company forward. A project in Boston; a casino and hotel in Everett, Massachusetts; new lodging in Las Vegas; and an expansion in Macau are all on the line. Lisa Du, Scott Moritz, Bloomberg