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Vince McMahon returns to WWE Board of Directors

McMahon expects to resume the role of WWE Executive Chairman.
Vince McMahon

This story has been updated at 10:40 AM Eastern.

A Friday SEC filing confirmed that former WWE Chairman and CEO Vince McMahon is officially back on the company's Board of Directors with three existing seat holders ousted and two others resigning.

This follows Thursday's news by the Wall Street Journal that McMahon was plotting his return to WWE in order to pursue a sale and be involved in the company's upcoming media rights deals.

McMahon resigned as both Chairman and CEO in July 2022 in the wake of a Board investigation into multiple "hush fund" payouts to women who alleged sexual misconduct. News broke in December that he was looking to make his return to the company amid the feeling he got bad advice that resulted in his resignation.

At 10 AM Eastern Friday, WWE issued a press release in which they said they welcomed McMahon's return and are looking forward to "exploring all strategic alternatives to maximize shareholder value."

“Today, we announce that the founder of WWE, Vince McMahon, will be returning to the Board,” said Chairwoman & Co-CEO Stephanie McMahon, Co-CEO Nick Khan and Chief Content Officer Paul Levesque. “We also welcome back Michelle Wilson and George Barrios to our Board of Directors. Together, we look forward to exploring all strategic alternatives to maximize shareholder value.”

As Vince McMahon stated yesterday, “WWE has an exceptional management team in place, and I do not intend for my return to have any impact on their roles, duties, or responsibilities."

They added that while they are undergoing this exploration, "There is no assurance that this process will result in a transaction."

Trading of WWE stock was temporarily halted mid-Friday morning and then resumed shortly thereafter.

From the filing, McMahon "expects to assume the role of Executive Chairman of the Board." It included McMahon's rationale for his decision, issued via a press release, and went through his timeline of communication with the Board that put this into motion:

"Based on correspondence from the Board, dated December 27, 2022, and following conversations with representatives of the Issuer both before and after the Reporting Person’s most recent letter on December 31, 2022, the Reporting Person determined, consistent with his rights as controlling stockholder, that the actions he has taken are necessary to maximize value for all of the Issuer’s stockholders."

""These actions will enable unified decision making through the Issuer’s upcoming media rights negotiations and a parallel full review of the Issuer’s strategic alternatives, which the Reporting Person believes is the right course of action and in the best interests of the Issuer and the Issuer’s stockholders in the midst of the current dynamics in the media and entertainment industry."

As reported Thursday, McMahon's return also includes the reinstatement of former WWE executives George Barrios and Michelle Wilson to the Board. The filing revealed that JoEllen Lyons Dillon, Jeffrey R. Speed and Alan M. Wexler were removed as a result of the changes.

In the aforementioned WWE press release, they confirmed their current Board and noted two additional members (Ignace Lahoud and Man Jit Singh) have resigned effective Friday.

The current Board is now made up of Vince McMahon, Stephanie McMahon, Nick Khan, Paul Levesque, Steve Koonin, Michelle McKenna, Steve Pamon, George Barrios and Michelle Wilson.

There will be an all-hands WWE employee meeting Friday afternoon.

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McMahon also changed several company bylaws, one of which includes the requirement of any media deals and/or company sale to be approved by him.

The filing included his Thursday press release, and exchanges with the Board that began on December 20, 2022. 

Some excerpts from the initial letter from McMahon justifying his return and his full confidence in the current executive team:

"Now that the completion of the special committee investigation has been publicly disclosed, I believe WWE has a unique opportunity during this critical juncture to maximize value for its shareholders and all other stakeholders. Specifically, given the rapidly evolving media landscape in which more and more companies are seeking to own the intellectual property offered on their streaming platforms – I firmly believe that the best thing to do for all of WWE’s shareholders and other stakeholders is to undertake a comprehensive review of strategic alternatives. I am confident that our other shareholders will support this decision."

"As you know, the media rights subject to the upcoming negotiations are critical to any strategic alternative consideration, and therefore the two initiatives must occur in parallel fashion. By combining a review of strategic alternatives, with the media rights negotiations, our Company can make better, more well-informed, and faster decisions. Moreover, any party that engages in strategic discussions with WWE will want to be assured that I, as controlling shareholder, am aligned with the decision-making process. In other words, we must unify the Company’s decision-making regarding these two interconnected initiatives to fully capitalize on this unique opportunity."

"I want to be very clear that I wholeheartedly believe that WWE has an exceptional management team in place. Stephanie, Nick, Paul, and the rest of the management team have my full and unconditional support, and as Executive Chairman, I would support them to facilitate unified, efficient, and effective decision-making during this important period in the Company’s history. An announcement that I am rejoining the Board as Executive Chairman provides a natural opportunity for WWE to announce its intention to engage in a strategic review process. In light of timing of the media rights cycle, it is important to finalize my return to WWE as soon as possible. Accordingly, I would request to hear back from you by 6pm Eastern Time on Tuesday, January 3."

The Board responded and were open to working with McMahon but not for the return he wanted due to government investigation concerns, excerpts of which are found below:

"With respect to your suggestion regarding a process to evaluate strategic alternatives, and your role in that process, we are prepared to initiate such a process and are happy to work with you to ensure that it is the best process for the Company and all of its shareholders. Indeed, we would welcome you and your advisors playing an important role in that process, including working together to identify the full range of potential alternatives and counterparties. To that end, we suggest that your bankers and lawyers meet with our bankers and lawyers in the first week of January to discuss how to best move forward together with this process."

"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. This determination is based on a variety of factors, including non-public information the Board has become aware of and the risks to the Company and its shareholders of placing a greater spotlight on these issues."

"The attached draft letter agreement provides that the Board will not agree to the shareholder demand that the Company file suit against you, on the conditions that you confirm your commitment to repay all of the investigation-related expenses incurred by the Company and that you agree not to serve as an officer, director or employee of the Company during the pendency of the government investigations. Those conditions and the draft letter agreement reflecting such conditions were unanimously approved by the Board prior to receiving your letter of December 20, and were reaffirmed unanimously subsequent to that date."

McMahon then replied via email December 31st which the following excerpts are from:

"I appreciate your timely response to my December 20 letter. However, it is surprising that you did not address what I had sought to make clear in my letter – namely that we have a unique but narrow window of opportunity to maximize shareholder value by combining the upcoming media rights negotiations with a strategic review process the Board acknowledges is the right course of action for our shareholders – and that the only way to fully capture that opportunity is by having me – the Company’s founder and controlling shareholder – return as Executive Chairman at this critical time so that I can work alongside the management team to unify the decision making related to these two interconnected initiatives."

"I would like to be clear that unless I have direct involvement and input as Executive Chairman from the outset, I will not be able to support or approve any media rights deals or strategic transaction (including any commitments made by or on behalf of the Company regarding a potential transaction or process). This position is not driven by self-interest or a lack of confidence in the Company’s management team, but rather by my commitment to doing what is best for WWE and all its shareholders and by my strong belief that maximizing the outcome of these processes will require close coordination and unified and efficient decision making. I sincerely hope we can work together to unlock this tremendous value potential."

"Regarding the shareholder demand letter, I am glad to learn that following a review of the shareholder demand, the Board has determined that the demand does not warrant any further legal action. However, it is unfortunate that the Board would seek to use this conclusion to attempt to extract an agreement from me not to return to the Company. Any construct along these lines is entirely unacceptable, especially in light of the critical inflection points now facing the Company."

"I would also like to clarify that my intention is to avoid the creation of any conflict of interest related to the special committee’s investigation or related matters because of my return to the Board. As Executive Chairman, and consistent with my prior actions, I would not interfere with any government investigations or the special committee’s and independent directors’ process in cooperating with those or related investigations and would fully support appropriate and tailored governance measures to insulate me from those matters, as well as any improvements to the Company’s internal controls determined to be appropriate by the independent directors. As I have previously conveyed, I also remain willing to continue working to finalize my reimbursement of the Company for its reasonable expenses incurred related to the investigation by and findings of the special committee to the extent not covered by insurance."