Vincent Kennedy McMahon, the billionaire owner, promoter and head of World Wrestling Entertainment (WWE), has stepped away from his corporate duties after allegations of an affair he had with an employee.
In his place, his daughter Stephanie McMahon will serve as the interim CEO and Chairwoman of the Board.
On June 15, the Wall Street Journal (WSJ) published an exclusive report stating that the board of the WWE was investigating an allegation that McMahon had agreed to pay an employee a US$3 million (S$4.16 million) settlement.
The supposed deal granted an upfront payment of US$1 million (S$1.39 million), with the remaining US$2 million (S$2.77 million) to be paid out over five years.
According to the January 2022 non-disclosure agreement, the employee, who has left the company, is forbidden from discussing her relationship with the elder McMahon or "disparaging him."
The employee was hired by the WWE in 2019 as a paralegal with a starting salary of US$100,000 a year (S$138,600).
However, after McMahon allegedly started a sexual relationship with her, her salary was increased to US$200,000 (S$277, 200).
McMahon, 76, is married to Linda McMahon, who served as the Administrator of the Small Business Administration under former president, Donald Trump.
The claims were made known to the WWE board through anonymous emails sent by someone claiming to be a friend of the ex-employee.
The WSJ wrote:
"The email to the board also alleged that Mr McMahon 'gave her like a toy' to Mr Laurinaitis. The board is investigating the allegations in the email, the people familiar with the inquiry said."
John Laurinaitis is a former professional wrestler, a former on-screen talent, and a current executive with the WWE. He was hired in March 2021 as the Head of Talent Relations.
The ex-employee was allegedly moved from the legal department in 2021 to work as an assistant to Laurinaitis in 2021.
The WWE's board of directors comprises 12 members, including McMahon, his daughter Stephanie, and her husband Paul Levesque, better known as Triple H.
WSJ said that eight of the board's "independent" directors had retained an outside law firm to conduct the investigation into McMahon's payments.
The investigation is also looking into the WWE's "compliance and human-resources programs and company culture."
The board's investigation, which started in April 2022, has also allegedly discovered other nondisclosure agreements which involved claims by female ex-employees of the WWE of alleged misconduct by McMahon and Laurinaitis.
"The board's preliminary findings are that Mr McMahon used personal funds to pay the former female employees who signed the agreements, including the one involving allegations against Mr Laurinaitis, this person (one of the independent board members) said."
The WWE's initial response
A WWE spokesperson contacted by the WSJ said that it was fully cooperating with the investigation and that the relationship with the ex-paralegal was consensual. In addition, "the company takes the allegations seriously and is dealing with them appropriately."
While McMahon and Laurinaitis didn't directly respond to requests for comment, McMahon's lawyer Jerry McDevitt sent a letter to the WSJ.
McDevitt said that the ex-paralegal had not made any claims of harassment against McMahon, and that the WWE did not pay any monies to her upon her departure.
One of the emails to the board supposedly mentioned McDevitt, who is alleged to have negotiated the deal.
"My friend was so scared so she quit after Vince McMahon and lawyer Jerry paid her millions of dollars to shut up," the email reportedly said.
Following the WSJ's report, the WWE announced in a Jun. 17 press release that McMahon had "voluntarily stepped back" from his responsibilities as CEO and Chairman of the Board until the conclusion of the investigation.
However, McMahon will still be in charge of the WWE's creative control and direction, including its live shows.
The statement said:
"WWE and its Board of Directors take all allegations of misconduct very seriously. The Independent Directors of the Board engaged independent legal counsel to assist them with an independent review. In addition, the Special Committee and WWE will work with an independent third-party to conduct a comprehensive review of the company’s compliance program, HR function and overall culture.
The Company and the Board do not expect to have further comment until the investigation is concluded."
During a live WWE Smackdown event after the WSJ story and statement from the company, McMahon made an appearance and said he wanted to remind the crowd of the four words that make up the "WWE signature."
"Those four words are 'then,' 'now,' 'forever,' and the most important word is 'together,'" he said. "Welcome to Smackdown!"
Stephanie McMahon named as interim boss
In McMahon's place, the board have appointed his daughter Stephanie McMahon as interim CEO and Chairwoman. She said:
"I love this company and am committed to working with the Independent Directors to strengthen our culture and our Company; it is extremely important to me that we have a safe and collaborative workplace.
I have committed to doing everything in my power to help the Special Committee complete its work, including marshaling the cooperation of the entire company to assist in the completion of the investigation and to implement its findings."
Stephanie McMahon's ascension comes just a few weeks after she announced that she would be taking a leave of absence from the WWE. She was the company's Chief Brand Officer at the time.
As of tomorrow, I am taking a leave of absence from the majority of my responsibilities at WWE. WWE is a lifelong legacy for me and I look forward to returning to the company that I love after taking this time to focus on my family.— Stephanie McMahon (@StephMcMahon) May 19, 2022
In September 2021, her husband suffered a cardiac event and received life-saving surgery in hospital.
During an appearance on ESPN, Levesque shared his experience and said his in-ring career was over.
Levesque said he has a defibrillator in his chest. He and Stephanie have three daughters aged 15, 13 and 11, according to People.
However, he remains with the company. Levesque is currently working as the WWE's Executive Vice President of Global Talent Strategy & Development.
Top image from Dirtsheet Net Facebook.