ISS Endorses HG Vora in Penn Entertainment Proxy Fight
Posted on: June 6, 2025, 04:18h.
Last updated on: June 6, 2025, 04:18h.
- ISS becomes second proxy firm to support HG Vora in fight against Penn
- Advisory firm says Penn investors should vote for all three directors proposed by the hedge fund
- ISS highlights Penn’s online gaming missteps
Institutional Shareholder Services (ISS), one of the top proxy advisory firms, today announced its support of the HG Vora directors slate in that hedge fund’s fight against Penn Entertainment (NASDAQ: PENN).
The news arrives ahead of Penn’s June 17 annual meet at which investors will either vote on the board composition proposed by the regional casino operator or the “Gold Card” option pitched by Vora. Penn approved the nominations of Vora candidates Johnny Hartnett and Carlos Ruisanchez to its board, but the hedge fund is perturbed that William Clifford — its other candidate — was excluded.
Joining Egan-Jones as the proxy evaluators supporting Vora, ISS said there’s an obvious case for change on Penn’s board and that there’s “little evidence that the board has been able to hold management accountable.”
Most worryingly, the company has pursued acquisitions and partnerships since early 2020 that have failed to meet the expectations of shareholders, and failed to meet the company’s own stated goals,” according to ISS.
The proxy advisory firm also chided Penn for a series of ill-fated acquisitions, most of which relate to online sports betting, that have failed to deliver adequate return on investment for shareholders, adding the “board appears not to have taken tangible lessons from its record in approving company acquisitions.”
That commentary likely references the gaming company’s purchases of Barstool Sports, theScore, and an investment with ESPN to gain the rights to use that brand on its online sportsbook. Combined, those investments could ultimately cost Penn more than $4.5 billion, or more than double the company’s current market capitalization. Those deals haven’t produced results. Barstool was sold back to its founder in 2023 for $1 and analysts believe it’s possible could eventually kill ESPN Bet and sell theScore at a loss.
ISS Makes Case for Clifford Joining Penn Board
Clifford has three decades of gaming industry experience and most recently served in high-level roles, including chief financial officer (CFO) at Gaming and Leisure Properties (NASDAQ: GLPI) — the real estate investment trust (REIT) spun out of Penn in 2013.
In 2020, there was an attempt to bring him onto the Penn board, which the company rebuffed citing his reluctance to embrace some technology-driven changes spearheaded by now CEO Jay Snowden. Last month, Penn elaborated on why it rejected Clifford’s most recent candidacy, noting his skills and experiences aren’t “additive or complementary to the board,” adding he “failed to demonstrate the base level of open-mindedness required of all directors in order to explore value-generating solutions.”
ISS said Clifford has relevant gaming industry experience. More importantly, he could bring contrarian perspective to a directors slate that has either been unable or unwilling to rein in management.
“[With respect to Clifford …], there is little evidence that the board has been able to hold management accountable, which suggests that a director who is not afraid to share a contrarian viewpoint may be a valuable addition,” adds the proxy advisor. “There does not appear to be an outcome that would make support unwarranted for Clifford at this meeting.”
Egan-Jones Supports Vora, Too
Earlier this week, Egan-Jones, a firm known primarily for its credit ratings, announced its support of Vora, mentioning issues such as Penn cutting the number of board seats that were supposed to be up for election this year to two from three.
“After analyzing the history of the company, their shift in strategy, and their financial performance in recent years, we believe change is needed in the boardroom,” said Egan-Jones.
The research also threw its support behind Vora’s Gold Card because of Penn’s worrisome corporate governance practices, including a staggered board and plurality voting, which have contributed to lack of investor rights and sour financial performance.
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