WWE's latest quarterly filing with the SEC on Monday officially confirmed that the company's Board of Directors' investigation into former CEO and Chairman Vince McMahon is "substantially complete." The investigation began in April and was eventually made public via a Wall Street Journal report in June, which looked into non-disclosure agreements McMahon had former WWE employees sign in order to keep sexual misconduct allegations from becoming public. McMahon announced his retirement from all positions within WWE in late July, though the filing warns that his departure could have negative effects on the company. WWE has since promoted Stephanie McMahon and Nick Khan as the Co-CEOs while Paul Levesque has stepped in as the new Head of Creative and Head of Talent Relations.
A portion of the filing reads — "On June 17, 2022, the Company and its Board of Directors announced that a special committee of independent members of our Board of Directors (the 'Special Committee') was formed to investigate alleged misconduct by the Company's former Chairman and Chief Executive Officer, Vincent K. McMahon. The Special Committee investigation is substantially complete. Mr. McMahon resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling interest. On July 25, 2022, based on the findings of the Special Committee investigation, the Company announced that it had determined that certain payments that Mr. McMahon agreed to make during the period from 2006 through 2022 (including amounts paid and payable in the future totaling $14.6 million) were not appropriately recorded as expenses in the Company's Consolidated Financial Statements. The Company subsequently identified two additional payments totaling $5.0 million, unrelated to the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded as expenses in the Company's Consolidated Financial Statements. Together, these unrecorded expenses total $19.6 million (the 'Unrecorded Expenses'). All payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The Company has determined that, while the amount of Unrecorded Expenses was not material in any individual period in which the Unrecorded Expenses arose, the aggregate amount of Unrecorded Expenses would be material if recorded entirely in the second quarter of 2022.
The statement later added, "Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our business partners could occur as a result of the investigation. In addition, as a result of the investigation, certain operational changes including without limitation personnel changes have occurred and may continue to occur in the future. Any or all of these impacts based on the findings of the investigation and related matters and the surrounding circumstances could exacerbate the other risks described herein and directly or indirectly have a material adverse effect on our operations and/or financial performance." You can read the filing in its entirety here.0comments