Board Declassification Recommended
Key Shareholder Advisors Recommend PENN Entertainment Board Declassification Proposal
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Two of Wall Street's most powerful proxy advisory firms have told PENN Entertainment shareholders to vote for a proposal that would force annual elections for every board seat. Business Wire reported on June 3, 2026, that both Institutional Shareholder Services (ISS) and Glass Lewis & Co. have formally recommended a "FOR" vote on the declassification proposal ahead of PENN's June 16 Annual Meeting.
A classified — or "staggered" — board means directors serve multi-year terms, so shareholders can only vote on a portion of the board each year. ISS and Glass Lewis argue this structure reduces accountability. Labor union UNITE HERE, which represents workers at four PENN-operated casinos, welcomed the recommendations and is pushing shareholders to back the change, according to Yahoo Finance.
A 16-Year Fight Shareholders Keep Winning — and Losing
This is not the first time PENN shareholders have pushed for this change. In 2010, shareholders approved a declassification proposal with 66% support. The board did not implement it. In 2011 and 2012, shareholders approved two separate proposals for majority voting in director elections. The board ignored those too, according to Barchart.
PENN's stock has fallen roughly 90% from its 2021 all-time high of $136.47, according to Markets Financial Content. Between January 2020 and May 2025 alone, shares dropped about 48%. UNITE HERE's Michael Hachey said the recommendations "reinforce what shareholders have communicated for years: that annual director elections enhance board accountability."
PENN Says Gaming Rules Require Board Stability
PENN's board recommends shareholders vote AGAINST the proposal. The company argues its classified structure provides "continuity and stability." PENN operates 42 gaming and racing properties across 19 states. Directors must pass background checks and get licensed in up to 28 different jurisdictions, a process the company says annual elections would disrupt, according to AP News.
ISS and Glass Lewis pushed back hard on that argument. They pointed out that PENN's direct competitors — MGM Resorts, Caesars Entertainment, and Boyd Gaming — all hold annual director elections while operating in the same regulated markets, including Nevada. The firms said the "regulatory defense" does not hold up against peer comparisons, according to Business Wire.
Declassification Could Unlock Millions in Shareholder Value
Glass Lewis cites research showing classified boards can reduce a company's market value by 4% to 6%. PENN's current market cap sits at roughly $2.25 billion. That means declassifying the board could represent a value unlock of $90 million to $135 million for shareholders, according to Weekly Voice.
Across U.S. markets in 2025, declassification proposals received an average of 77.9% shareholder support and passed at an 86% rate, according to Yahoo Finance. PENN's debt-to-equity ratio stands at 6.15, adding urgency for shareholders who want tighter board oversight of the company's finances.
Activist Battles Set the Stage for Today's Vote
The current governance push follows a bruising 2025 proxy fight. Activist hedge fund HG Vora Capital Management, which owns about 4.8% of PENN, filed a federal lawsuit in May 2025, alleging breaches of fiduciary duty. HG Vora nominees Johnny Hartnett and Carlos Ruisanchez won board seats at the June 2025 annual meeting, according to ADVFN.
By February 2026, PENN reached a deal with HG Vora. Three new independent directors joined the board, expanding it to 11 members. HG Vora dropped its lawsuit. The board is now 91% independent, with seven of 11 directors joining since 2021, according to BDT Online. The June 16 vote will show whether those changes are enough — or if shareholders want still more control.
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