Penn Entertainment Board Structure Challenged by UNITE HERE Union

• UNITE HERE is calling on Penn Entertainment to declassify its board elections.
• The union is requesting that all board seats become subject to annual elections rather than multi-year staggered terms.
• The proposal is expected to be a focal point at the company’s upcoming annual meeting in June.

Unite Here has called on Penn Entertainment (NASDAQ: PENN) shareholders to support a proposal to declassify the board and implement annual director elections.

The union says Penn investors already supported a similar proposal in 2010, but the regional casino behemoth never implemented it. In the years since then, more companies have transitioned to enhanced transparency in director elections, leaving Penn as an outlier.

In 2025, declassification proposals were reported to have seen average shareholder support of 77.9%, resulting in a passage rate of 86% across 14 proposals,” notes Unite Here. “Today, maintaining a classified structure places PENN increasingly out of step with shareholder preference.”

The union has documented success in pushing for change in how casino operator boards are elected. In 2019, Unite Here pitched five non-binding proposals, including majority votes, for the Caesars Entertainment (NASDAQ: CZR) board. That company adopted a majority vote standard for uncontested director elections in 2022.

Penn Previously Endured Board Criticism

HG Vora, the hedge fund and activist investor that previously waged a proxy fight against Penn, criticized the company for what it claimed was an unlawful shrinking of its board and while it’s accurate that some Penn directors stand for election in one year and others do so in another year, Vora wasn’t necessarily pressing for annual elections.

Unite Here also points out that Penn cites its sprawling geographic exposure as a reason to not conduct annual elections because some of the states in which the company does business require directors to be licensed prior to voting on board matters.

The union says that argument doesn’t hold weight because Caesars’ regional exposure is comparable to Penn’s and the former holds annual elections.

Penn runs land-based gaming venues in 19 states, just one more than Caesars and the Ameristar operator offers sports betting in 28 North American jurisdictions compared to 34 for Caesars.

“PENN does not explain why its regional footprint would be more of a hindrance to holding annual elections than Caesars’ regional footprint,” says Unite Here.

More Unite Here Criticisms

Last year, two of the three candidates Vora pushed were elected to Penn’s board and in February, the casino company added three more directors, which is to say a significant portion of its director slate hasn’t been there a year. Still, Unite Here says board refreshment and shareholder engagement aren’t replacements for voting rights.

“While engagement is important and refreshment is positive, they are not substitutes for shareholder rights. Shareholders’ ability to vote annually on directors is a direct implementation of the shareholder franchise and helps ensure that refreshment is aligned with shareholders’ priorities,” according to the labor group.

The union also believes Penn’s view that a classified board structure is good for “long-term strategic decision-making and continuity” is faulty because it’s possible for companies to identify capable, dedicated directors that are elected yearly, adding that board elections of that nature “enhance long-term value by ensuring that directors remain continuously accountable for execution.”