PENN Entertainment investor HG Vora has filed its definitive proxy statement with the Securities Exchange Commission (SEC) in a bid to get PENN shareholders to vote for all three of its board candidates.
HG Vora Founder Parag Vora urged shareholders to vote HG Vora’s GOLD proxy card, “to send a message to PENN that genuine change is needed.” Vora also implored shareholders who have already voted to change their vote online or by mail using the GOLD proxy card.
This comes after PENN only put forward two of HG Vora’s three proposed board candidates, approving two independent candidates but rejecting former PENN National Gaming Chief Financial Officer William Clifford as the third nominee. In response, HG Vora sued PENN in the Eastern Pennsylvania District Court, claiming PENN is violating law by removing one of the three elective board seats without notifying shareholders.
HG Vora tears into PENN’s strategy
In a letter published by HG Vora on May 13, Vora called the decision to reduce the number of directors up for election “perhaps the most brazen act of entrenchment” and “a desperate maneuver.”
That was just one line from a lengthy open letter in which Vora blasted PENN’s strategy in recent years, accusing executives of “value-destructive deal-making, reckless capital allocation and poor execution.”
“We believe PENN trades at a discount to its intrinsic value because its management team and Board of Directors have lost credibility and investors fear further value-destructive decisions,” wrote Vora. “Surprisingly, it seems that the Board thinks PENN’s performance has been laudable.”
Vora outright refuted CEO Jay Snowden and the company’s suggestion of a substantial increase in shareholder value over the last decade, stressing that PENN’s stock price has declined over the last 10 years.
ESPN Bet and other sportsbook ventures ‘value-destructive’
Vora also stated that while HG Vora believes PENN is well-positioned to succeed in online casino gaming given that it is a large-scale omni-channel operator with brand recognition, Snowden and Board Chair David Handler have pursued “a misguided transformation” that has led it towards sports and media.
Vore then more directly referenced PENN’s ESPN Bet venture, as well as the acquisition of theScore in Canada, calling the deals “value-destructive acquisitions and partnerships.”
“PENN has executed a string of transactions that, in our view, stand among the worst in the industry’s history,” Vora wrote.
He asserted that despite the big spending, PENN’s online sports strategy has demonstrably failed, given that ESPN Bet is operating at far below its market-share aspirations.
Vora takes shot at Snowden’s earnings
Vora also took issue with Snowden’s compensation, suggesting that he has been “lavishly rewarded” by the board despite the strategic missteps.
“While PENN’s market value has declined by approximately $11 billion since the beginning of 2021, Mr. Snowden has been paid more than $120 million,” wrote Vora. He asserted that a 70% increase in Snowden’s target compensation in 2024 now makes him the second-highest-paid CEO among his peers.
“It is imperative that shareholders send a clear and unambiguous message that continued ineffective leadership, lack of accountability and entrenching actions will no longer be tolerated,” ended Vora.
HG Vora has also launched www.WinAtPENN.com, a website that highlights the alleged failures of PENN leadership.
SBC Americas reached out to PENN for comment but had not heard back at the time of writing.
PENN’s annual meeting of shareholders is scheduled for June 17.
