PENN Entertainment's Governance Crossroads: Voting FOR Change to Unlock Shareholder Value

The boardroom battle at PENN Entertainment (NASDAQ: PENN) is reaching its climax, with the June 17 annual meeting poised to decide whether the company will pivot toward meaningful governance reform or cling to a strategy that ISS warns has “failed to meet its own stated goals.” For shareholders, the choice is stark: endorse the HG Vora nominees on the GOLD proxy card to inject critical expertise into the board, or risk perpetuating a cycle of underperformance.

The Case for Change: ISS's Unambiguous Call to Action

Institutional Shareholder Services (ISS) has thrown its weight behind three independent director candidates—William Clifford, Johnny Hartnett, and Carlos Ruisanchez—nominated by activist investor HG Vora Capital Management. ISS's recommendation is unequivocal: voting FOR all three nominees on the GOLD card is essential to address PENN's governance gaps and strategic missteps.

Why ISS is Convinced:
- Operational Underperformance: PENN has lagged peers across financial metrics, with debt levels rising and revenue misses like its Q1 2025 shortfall. ISS attributes this to poor strategic execution, particularly in interactive gaming and post-2020 acquisitions.
- Governance Gaps: The board lacks direct gaming industry experience, undermining its ability to oversee management. ISS notes a “clear case for meaningful change” to hold leadership accountable.
- Qualified Nominees: Hartnett and Ruisanchez are praised for filling expertise gaps, while Clifford's gaming background and “contrarian viewpoint” are seen as a constructive check on management's decisions.

The Opposition: PENN's Resistance to Clifford

PENN's management has split from ISS, opposing only Clifford's candidacy. They argue his “antiquated” views clash with key initiatives and cite past disagreements during his CFO tenure (ended in 2013). However, this resistance raises red flags.

Why Shareholders Should Overrule Management:
- Experience Matters: Clifford's 25+ years in gaming finance and operations provide precisely the expertise ISS identifies as missing. His “contrarian” perspective could challenge flawed strategies, such as overleveraged acquisitions.
- Accountability Gap: PENN's acceptance of two nominees but rejection of Clifford signals a reluctance to embrace full accountability. A board refresh without his input risks leaving critical blind spots.

Strategic Implications: Unlocking Value Through Governance

Voting FOR the nominees on the GOLD card creates a board with 75% turnover since 2019, signaling a commitment to change. This shift could catalyze three critical reforms:

1. Strategic Reorientation: A board with gaming expertise could reassess PENN's interactive gaming investments and M&A pipeline, prioritizing returns over expansion for its own sake.
2. Debt Management: With leverage at elevated levels, a reformed board might prioritize deleveraging over aggressive growth, stabilizing the balance sheet.
3. Shareholder Alignment: ISS and Egan-Jones Proxy Services' dual endorsements underscore growing investor demand for governance that aligns with value creation.

Investment Thesis: Act Now or Pay Later

The math is clear: PENN's shares have underperformed peers by 22% over five years, and the June 17 meeting offers a rare catalyst to reverse this trend. Here's how to position:

• Vote Immediately: Use the GOLD proxy card via www.WinAtPENN.com or Okapi Partners. Delays risk diluting shareholder influence.
• Hold PENN Stock: A “yes” vote outcome could trigger a rerating as governance improvements stabilize operations. Short-term volatility is likely, but long-term upside emerges if the new board drives strategic clarity.
• Monitor Post-Meeting Moves: Track capital allocation priorities (e.g., debt reduction, M&A discipline) and quarterly results to gauge reform success.

Final Analysis: Governance as the Path to Value

PENN's board shake-up isn't just a governance debate—it's a survival test. ISS's endorsement of HG Vora's nominees provides a roadmap to address underperformance, but execution hinges on shareholder support. Voting FOR all three candidates on the GOLD proxy card is the decisive step to align PENN's leadership with industry realities and unlock trapped value. The clock is ticking—act before June 17.

Investment Recommendation: Hold PENN stock while voting FOR the nominees. A “yes” outcome could catalyze a 20-30% upside over 12 months as governance improvements stabilize operations and redirect capital to shareholder-friendly strategies.