Penn Fires Back at ISS, Says Clifford Candidacy Is Flawed
Posted on: June 7, 2025, 01:43h.
Last updated on: June 7, 2025, 01:43h.
- Casino operator responds to proxy advisor’s report encouraging investors to vote for three dissident board candidates
- ISS report endorsed HG Vora’s directors slate
- Penn says Clifford holds “antiquated views”
Late Friday, Penn National Gaming (NASDAQ: PENN) responded to a report released earlier in the day Institutional Shareholder Services (ISS) in which the advisory firm recommended the gaming company’s shareholders vote in favor of a dissident directors slate proposed by hedge fund HG Vora.
The ESPN Bet parent made clear that it’s supportive of Johnny Hartnett and Carlos Ruisanchez — two of Vora’s proposed candidates — joining the board, but again expressed its reasoning behind the rejection of William Clifford’s candidacy. Penn noted that in its report, ISS said the gaming company’s board “appears to have given serious consideration to all three dissident nominees.”
Clifford, who ISS pointed out has pertinent gaming industry credentials, has ties to Penn, previously serving as the operator’s chief financial officer. That appears to be what’s hindering his candidacy. In its response to the ISS report, Penn said Clifford was resistant to changes and when he left that role in 2013, those alterations were made, resulting “in meaningful margin improvement.”
Clifford Views “Antiquated,” Says Penn
Since Jay Snowden became chief executive officer of Penn in January 2020, the company has attempted a transformation from sleepy regional casino operator to a cutting-edge online gaming company. Failures on that front are central to Vora’s argument for three board seats and it appears Clifford is sympathetic to the hedge fund’s perspective.
Mr. Clifford demonstrated antiquated views of a rapidly changing industry, and the same posture of resistance to exploring value-generating solutions, which we believe would hinder constructive decision-making,” according to Penn’s statement.
Vora has expressed dismay that Penn reduced the number of director seats up for election at the June 17 annual meeting to two from three, calling it an “affront” to shareholder democracy. In its Friday statement, the casino operator reiterated that it attempted to find an amicable resolution with the money manager, but those efforts didn’t pan out.
“PENN attempted multiple resolutions with HG Vora, but all of our resolution attempts were rejected. Given HG Vora’s violation of its institutional waivers by multiple state gaming regulators, our ability to allow HG Vora to influence the governance of the Company beyond the evaluation of the nominees was expressly prohibited,” according to the press release.
Penn Says It Has Quickly Refreshed Board
Penn also noted that following the upcoming annual meeting, 75% of its directors, including Hartnett and Ruisanchez, will have joined the board since 2019. While that refutes any argument that the board is stale, it’s likely not enough for Vora and other frustrated investors.
Among the hedge fund’s other key points for change at Penn is that the board has been complicit in indulging Snowden’s online sports betting whims, allowing him to steer Penn into a series of what some investors believe were ill-fated deals that cost the company more than its current market value. There’s been little return on those investments as ESPN Bet — Penn’s latest sports betting venture — has scant market share in the US.
Potentially further fortifying Vora’s argument is that while Penn’s board has turned over noticeably since 2019, Snowden ascended to helm in 2020, immediately setting out to get the company into the online sports betting industry. Vora has pointed out that since Penn shares peaked in 2021, the stock has tumbled while the board signed off on lofty compensation packages for the chief executive officer.
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