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Las Vegas Sands Corp. (LVS): An Abundance of Related-Party Transactions

So while some of the major players have plenty of related-party deals, it looks as if the bigger influence is from the founders, rather than the gaming industry itself, in which the founder/leaders also exercise a great deal of control over share votes. Adelson, his family, and related trusts own about 52% of Las Vegas Sands’ company stock. Wynn Resorts, Limited (NASDAQ:WYNN) CEO/Chairman Stephen Wynn and his ex-wife and fellow director, Elaine Wynn, together own nearly 20% of company stock. Boyd Gaming Corporation (NYSE:BYD) CEO/Chair William Boyd, along with fellow directors Marianne Boyd Johnson and William R. Boyd, together own about 37% of company stock.

The Foolish bottom line
While none of these transactions provides conclusive evidence that Las Vegas Sands Corp. (NYSE:LVS)’s management is acting against shareholders’ best interests, taken together these transactions worry me a great deal. Despite the company’s recent success in increasing revenues and earnings per share, I believe these deals raise questions about whether we can trust Adelson to act in the best interests of shareholders at large when those interests diverge from his own — especially when he, his family, and related trusts own more than 50% of the company stock, preventing average shareholders from voting out his preferred directors.

The article Does Cronyism Compromise Shareholders at This Company? originally appeared on and is written by M. Joy Hayes, Ph.D.

Motley Fool contributor M. Joy Hayes, Ph.D., is the Principal at ethics consulting firm Courageous Ethics. She has no position in any of the stocks mentioned. Follow @JoyofEthics on Twitter. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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