The Shareholder Showdown: Why PENN Entertainment’s Governance Battle Could Spell Opportunity or Disaster
15min read 
This is the kind of corporate showdown that makes investors either run for cover or pounce on opportunity. penn entertainment (PENN) and activist investor HG Vora are locked in a high-stakes battle over control of the company’s board—and the outcome could redefine shareholder value for years to come. Let’s break down the chaos and where it leaves investors.
The Governance Battle Heating Up
The fight began when PENN’s Board abruptly reduced the number of director seats up for election at its 2025 Annual Meeting from three to two on April 25—a move HG Vora called a “blatant attempt to disenfranchise shareholders.” This came just 10 days after PENN confirmed three seats would be contested, and after HG Vora had already notified the company of its intent to nominate three candidates: Johnny Hartnett, Carlos Ruisanchez, and William Clifford.
HG Vora isn’t messing around. The firm, which holds 4.8% of PENN’s shares, argues that the seat reduction is a desperate power grab to avoid accountability. PENN’s leadership, including CEO Jay Snowden, has faced sharp criticism for underperformance: the stock has plummeted 19% year-to-date through April 25, and Snowden’s $26.7 million 2024 compensation package (despite the declining stock) has fueled outrage.
The Legal Backstory: A Pattern of Governance Failures
PENN’s credibility is already on shaky ground. In 2024, the company violated Pennsylvania gaming regulations by initially listing too few directors for election, only correcting the error after shareholder nomination deadlines had passed. HG Vora isn’t letting PENN forget this. The firm argues that this year’s seat reduction is another example of a board “prioritizing entrenchment over shareholder interests.”
Adding fuel to the fire: PENN claims it’s legally restricted by state gaming laws from making governance compromises. For instance, regulators revoked HG Vora’s “institutional investor waivers” in 2024 due to its activism, forcing the firm to reduce its stake below 5% to regain voting rights. Now that HG Vora is back in the game, PENN is scrambling—but investors are left wondering who’s telling the truth.
The Proxy Fight: Three Candidates vs. Corporate Defense
HG Vora’s nominees are no small potatoes:
- Johnny Hartnett: Ex-CEO of Superbet Group, with M&A expertise.
- Carlos Ruisanchez: Former CFO of Pinnacle Entertainment, now leading Sorelle Capital.
- William Clifford: Ex-CFO of Penn National Gaming, bringing financial oversight credibility.
PENN’s Board says it “intends” to nominate Hartnett and Ruisanchez but balks at Clifford, calling his inclusion a “waste of shareholder capital.” But here’s the kicker: PENN had originally planned to nominate three different candidates just 10 days prior. This inconsistency has HG Vora pushing full steam ahead with its full slate, arguing that anything less is a “shell game” to avoid real accountability.
What’s at Stake for Investors?
Let’s cut to the chase: PENN’s stock is down 19% YTD, and the company’s $4 billion investment in online gaming (like ESPN Bet) has drawn fire for being “misallocated.” Meanwhile, the proxy fight itself is a distraction from operational priorities.
HG Vora isn’t just fighting for board seats—it’s pushing for strategic changes. The firm wants PENN to explore mergers, asset sales, and capital returns, arguing that the current leadership has “destroyed value” through poor decisions. If HG Vora’s candidates win, the board could pivot to a more shareholder-friendly strategy. But if PENN holds firm, the stock could stay in a rut—or even sink further as governance concerns mount.
The Bottom Line: A High-Risk, High-Reward Crossroads
Investors have a stark choice:
1. Buy the dip: PENN’s valuation is near multi-year lows, and a governance overhaul could unlock value. But this requires faith that the company’s online gaming and casino operations can rebound.
2. Stay on the sidelines: The proxy fight’s uncertainty, plus PENN’s regulatory risks and poor stock performance, make this a risky bet.
The June 17 shareholder meeting is the decisive moment. If HG Vora’s nominees win, look for a strategic reset—potentially including buybacks or M&A. If PENN retains control, the stock could languish unless operational improvements materialize fast.
Final Call: PENN is a gamble. The governance battle is a litmus test for whether the company can rebuild trust—or if it’s destined to repeat past mistakes. For now, keep an eye on the proxy results and the stock’s reaction. This isn’t just about board seats; it’s about whether PENN’s future is in the hands of its shareholders or its entrenched leadership.
Data as of April 2025. Past performance is not indicative of future results. Consult your financial advisor before making investment decisions.
