Shareholder Revolt at Penn Entertainment Over Executive Pay

According to a recent SEC filing, 44.4 million votes opposed the compensation proposals, while 63.1 million were in favor. Additionally, more than 25% of investors voted against the re-election of board chair David Handler.

Activist Investor’s Influence

This dissent comes amid ongoing criticism from activist investor William Wyatt, managing director of Donerail Group. Wyatt has been vocal about what he describes as “strategic failures” within Penn Entertainment and has advocated for the company’s sale.

Wyatt’s primary concern centers on the compensation awarded to CEO Jay Snowden. Wyatt argues that the nearly $100 million given to Snowden over the past few years is excessive, particularly given the company’s performance.

Between 2020 and 2023, Snowden received $99.3 million in total compensation. In 2022 alone, despite a significant drop in the company’s stock price, Snowden’s pay exceeded $14 million.

2023 Compensation Details

Penn Entertainment disclosed that in 2023, Snowden’s total compensation was $15.5 million. The company also revealed that the median annual compensation for its employees, excluding Snowden, was $38,332. This results in a pay ratio of 405 to 1. Penn Entertainment defended this ratio, stating that it complies with SEC rules.

Wyatt also pointed out negative assessments from shareholder advisory firms like Institutional Shareholder Services (ISS). ISS gave Snowden the lowest possible rating of -100 for aligning pay with performance. Wyatt contends that Penn’s board continues to base executive compensation on comparisons with larger companies, raising questions about the fairness and appropriateness of these benchmarks.

Adding to the discontent, Snowden has consistently sold Penn Entertainment stock. Since becoming CEO, he has sold over 750,000 shares, worth approximately $45 million. Wyatt suggests that this pattern of selling stock indicates a lack of confidence in the company’s future from its own CEO.