Stephanie McMahon’s stint as WWE (NYSE: WWE) co-CEO and chairwoman seems short-lived, and possibly permanent. The female executive announced that she’s stepping down just days after her father, Vincent McMahon, returned to the company’s board of directors and reappointed himself as executive chairman.
“About 8 months ago, I took a leave of absence and within a few weeks, unexpectedly had the opportunity of a lifetime,” the 46-year old McMahon said. “I had the privilege to return as the Co-CEO and Chairwoman of the Board of WWE.”
The older McMahon stepped down as CEO and Chairman of the WWE board in June 2022 following the investigation into alleged executive misconduct by him and John Laurinaitis, Head of Talent Relations.
The ongoing investigation concerns non-disclosure agreements and hush payments made to former female employees who allegedly had relations with Mr. McMahon, as he is known in the industry. The expose, first released by The Wall Street Journal, started with a former WWE paralegal that was secretly paid US$3 million to bar her from discussing the alleged relationship with the firm’s chief executive and the hush deal in which Laurinaitis has allegedly had a hand in making.
Early findings of the board indicate that Mr. McMahon could have possibly used his personal funds to pay the settlement money to the said former female employees.
An SEC filing published on Friday confirmed Mr. McMahon returned to the company’s board of directors, taking on the role of executive chairman. The 77-year old wrestling promoter justified his return with intentions of pursuing a potential sale, getting involved in WWE’s media rights deals, and maximizing shareholder value.
“The only way for WWE to fully capitalize on this opportunity is for me to return as executive chairman and support the management team in the negotiations for our media rights and to combine that with a review of strategic alternatives. My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” Mr. McMahon said.
This despite the board unanimously disagreeing on Mr. McMahon’s return to the company.
“Although we welcome your participation in the launch of a strategic alternatives review process, it is also our unanimous view that your return to the Company at this time, while government investigations into your conduct by the U.S. Attorney’s Office and SEC are still pending, would not be prudent from a shareholder value perspective,” the board said to Mr. McMahon in a letter.
Days after, Mr. McMahon made his eventual return to retake control of the company and its board. The unanimous vote to designate him back as executive chairman came after the younger McMahon announced her resignation from the company.
“I cannot put into words how proud I am to have led what I consider to be the greatest company in the world, working alongside a remarkable leadership team and one of the strongest executives I have known in my Co-CEO, Nick Khan,” McMahon said in her statement.
Before she took on the chief executive role, McMahon initially planned to take a leave of absence from a majority of her responsibilities in the company.
“WWE is in such a strong position, that I have decided to return to my leave and take it one step further with my official resignation,” McMahon added.
Her father commented on the news of her resignation, saying he expresses “full support for Stephanie’s personal decision.”
“I’ll forever be grateful that she offered to step in during my absence and I’m truly proud of the job she did co-leading WWE,” Mr. McMahon said in a statement.
The wrestling promoter also announced that Khan will serve as WWE’s sole CEO. Mr. McMahon’s return simultaneously dethroned five existing board members, three of whom voluntarily left.
In her resignation statement, McMahon said that her father returned as chairman to lead “an exciting process regarding strategic alternatives.” This spurred rumors that the company has been working a deal to take WWE private and sell it to the Saudi Arabian Public Investment Fund.
The company has had major deals with the Middle East country in the past. WWE established a 10-year strategic collaboration with Saudi Arabia’s General Sports Authority in 2018, which included the holding of pay-per-view events in the country. This was then extended through 2027 through a partnership with the General Authority for Entertainment.
Just in November 2022, WWE held its Crown Jewel pay-per-view event in Riyadh, topbilled by the promotion’s current champion, Roman Reigns, and online celebrity Logan Paul.
WWE last traded at $88.26 on NYSE.
Information for this briefing was found via Reuters, TMZ, TJRWrestling, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.