PENN Shareholders Back HG Vora’s Board Picks in Proxy Fight

HG Vora Scores Board Seats

PENN Entertainment’s annual meeting on June 17 saw shareholders elect Johnny Hartnett and Carlos Ruisanchez, nominees of activist investor HG Vora Capital, to the company’s board.

Over 55% of votes supported HG Vora’s “golden” proxy card, marking a win in their campaign for change. PENN didn’t oppose the duo, viewing their digital and retail gaming expertise as a fit, but the vote shows growing unrest with the company’s stock price and strategy.

“Shareholders voted for genuine change,” said HG Vora’s Parag Vora, calling the status quo “unacceptable.”

A Third Nominee Blocked

HG Vora’s push for a third director, William Clifford, hit a wall. Despite claims Clifford won majority support, PENN’s board rejected him, citing insufficient interactive gaming knowledge and overlapping skills with existing directors.

CEO Jay Snowden declared a third Class II director nomination “out of order,” as the board, per the bylaws, set only two seats, shrinking from nine to eight.

This move, criticized by HG Vora as a dodge of oversight, fuels an ongoing lawsuit alleging PENN violated securities laws by reducing board size without notice. A hearing is set for July 10.

Shareholders Rebuke Pay Packages

Beyond the board fight, shareholders delivered a blow to PENN’s leadership, with over 60% voting against executive compensation in the “Say-On-Pay” proposal.

HG Vora had slammed CEO Snowden’s $26.7 million 2024 pay, up from $15.5 million in 2023, as excessive given PENN’s struggles.

A smoking ban study was also rejected, but a long-term incentive plan passed. The pay vote signals broader discontent with PENN’s performance, particularly its digital ventures like ESPN Bet, which HG Vora called “value-destructive,”.

Digital Strategy Under Fire

HG Vora’s campaign targeted PENN’s digital missteps, notably the $500 million Barstool Sports buy (later sold for $1) and a $2 billion ESPN Bet licensing deal, costing $4 billion total and racking up over $1 billion in losses.

ESPN Bet’s 3.2% market share fell short, and a potential exit clause in August 2026 looms if revenue targets aren’t met. With Hartnett and Ruisanchez on board, HG Vora is poised to push for cost discipline and possibly selling or shuttering digital assets to refocus on PENN’s core casino business.