LAS VEGAS–(BUSINESS WIRE)–Outside shareholders of Red Rock Resorts, Inc. (NASDAQ: RRR)
demonstrated their dissatisfaction with directors at the company’s July
6th meeting of stockholders, with the most opposition shown toward the
“Red Rock shareholders are realizing that the company’s directors do not
serve their interests,” said Jason Kordosky, a research analyst with
UNITE HERE. “Director opposition typically grows over time and we
anticipate more dissent until the company installs a truly independent
Assuming all insiders voted shares in favor of management’s
recommendation, the outside Class A shareholder vote “for” the
directors was 71% for Frank Fertitta, 70% for Lorenzo Fertitta, 60% for
James Nave, 60% for Robert Lewis, and 59% for Robert Cashell, Jr. That
means between 29% and 41% of outside shares were not voted “for” the
Ernst & Young reports
that only 3.8% of Russell 3000 directors received less than 80% support
from all shareholders (combined inside and outside) in 2017 (YTD,
5/31/2017). Therefore, a significant number of Red Rock’s outside
shareholders expressed discontent with the entire board.
Red Rock’s closing share price on July 5th was down 3.1% year-to-date
compared with NASDAQ Composite Index’s gain of 13.3%. As of May 8th,
Class A shareholders held 58.4% of the equity but only controlled 12.9%
of the vote.
Leading up to the annual meeting, UNITE
HERE sent communications to Red Rock’s investors that criticized the
independent directors for anti-shareholder governance measures and
related-party transactions and encouraged investors to withhold votes
from its independent directors. ISS
recommended withholding on all of the company’s directors.
UNITE HERE represents 270,000 working people across North America,
including 100,000 casino workers. Our members are beneficiaries of
pension funds with over $60 billion in assets. Since 2012, we have
pursued a program of improving corporate governance practices at listed
companies. UNITE HERE locals represent employees at three of the casinos
managed or owned and operated by Red Rock’s subsidiary, Station Casinos.