Despite the ongoing conflict between PENN Entertainment and one of its investors, HG Vora Capital Management, the operator has elected two of the shareholder’s three nominees to its board of directors.
At the company’s 2025 annual meeting of shareholders this week, HG Vora’s independent director nominees, Johnny Hartnett and Carlos Ruisanchez, were elected to PENN’s Board.
However, the third HG Vora nominee, William Clifford, who PENN previously said was unsuitable for its board since he doesn’t have the essential digital gaming and online sports betting experience, was rejected and not elected.
This happened despite claims by HG Vora that Clifford was “supported by dozens of institutional investors and actively managed funds and received a majority of votes cast in the election”.
PENN vs HG Vora
HG Vora has recently been in a public dispute with PENN, arguing that three board seats should have been up for election instead of just the two that were opened up by the operator, with the disagreement making its way into the courts.
The investor has claimed that PENN sought to evade regulatory oversight and violated the law with the removal of one of the three seats without notifying shareholders, in addition to filing a motion to expedite the trial. Meanwhile, PENN has submitted a request to stay the case.
HG Vora was also unhappy with what they described as “value-destructive” operational decisions made by CEO Jay Snowden and other PENN executives, including its increased focus on digital gaming with ESPN Bet, theScore Bet in Canada and formerly with Barstool Sports.
As such, HG Vora encouraged shareholders to put forward all three of its nominees for the PENN board, which included Hartnett, Ruisanchez and Clifford, using its gold proxy card instead of the operator’s white proxy card, which only featured Hartnett and Ruisanchez.
In response, PENN said its interactive segment is growing, has strong momentum, is on track for profitability later this year and has an immense opportunity for value upside.
The operator also said Clifford is unsuited for its board as he doesn’t have the digital gaming and online sports betting experience that is essential for the position.
Clifford ‘supported by dozens of institutional investors’
Clifford has not been elected, but HG Vora has stated his nomination was “supported by dozens of institutional investors and actively managed funds and received a majority of votes cast in the election”.
Parag Vora, Founder and Portfolio Manager of HG Vora, noted: “PENN’s shareholders have voted overwhelmingly for genuine change, including for the election of William Clifford to the Board. There can be no mistake about the mandate from PENN’s shareholders that the status quo is simply unacceptable.
“We are grateful for the strong support the three independent nominees have each received from shareholders and are confident that Johnny and Carlos will work constructively with their fellow directors to drive shareholder value.”
HG Vora believes more than 55% of all votes cast in the PENN election were submitted on its card, and according to preliminary tabulations from its proxy solicitor, Okapi Partners, it believes approximately five of PENN’s top 30 institutional investors voted on the company’s white proxy card.
“More than 60% of the votes cast in the election were against the company’s Say-On-Pay proposal, and the company only received approval from approximately 25% of PENN’s outstanding shares, according to preliminary tabulations,” added HG Vora.
PENN board elected
Announcing the new appointments, PENN issued the following statement to its investors: “We are pleased to welcome Johnny and Carlos, both of whom bring highly relevant experience in digital and retail gaming to the Board.
“Over the past several months, we have continued to engage with our shareholders, and we look forward to incorporating feedback from those conversations as we move ahead.
“It is clear from this engagement that PENN’s Board, management team and shareholders are aligned in their focus on ensuring PENN is achieving its full potential. The Board remains committed to the close oversight of our differentiated omni-channel strategy and to delivering sustainable long-term value.
“We recognise there is more work to be done, and we are intently focused on driving profitability in our Interactive segment and growth across the business as we continue strengthening the Company’s balance sheet and liquidity position, deleveraging and accelerating capital return to shareholders.
“We look forward to further dialogue with our shareholders about our Board’s composition and skillset evolution, as well as PENN’s executive compensation program and strategic priorities, to ensure alignment with our shareholders.”
