PENN Entertainment defends strategy as proxy battle with HG Vora intensifies

PENN Entertainment is defending its leadership and strategic direction amid an escalating proxy fight with activist investor HG Vora Capital Management, which has accused the casino operator of mismanagement and value destruction.

On May 19, the company said it would not solicit proxies against HG Vora’s board slate, as both parties now support the same director nominees. PENN also agreed to nominate two HG Vora-backed candidates to its restructured eight-member board, reduced from nine seats in a governance “refresh.”

Despite the concessions, HG Vora continues to press for further board changes. In a 116-slide investor presentation, the hedge fund alleged that PENN has destroyed more than $11 billion in shareholder value since 2021 and criticized the company’s pivot to online sports betting as a “misguided foray.”

The presentation targeted CEO Jay Snowden and CFO Felicia Hendrix, accusing them of misusing corporate aircraft. HG Vora cited 760 flights—many between Reading, Boston, and New York—and claimed Snowden’s 2024 target compensation exceeds $25 million, calling him “the second-worst performing CEO among his peers.”

PENN responded on Tuesday, calling the presentation “full of false claims and mischaracterizations.” The company said Snowden’s “realizable” pay is only 45% of the reported compensation and ranks in the bottom quartile relative to its proxy peer group. On aircraft use, PENN stated that only 1.5% of total flight hours since 2020 were for personal travel and said HG Vora mistakenly included leased aircraft hours.

PENN also defended its strategic shift toward digital operations, pointing to partnerships with ESPN and theScore as central to its long-term growth. The company said it remains committed to regulatory compliance and to creating long-term shareholder value through its integrated entertainment and technology strategy.

Shares of PENN are down nearly 30% over the past six months. The company reported first-quarter 2025 revenue of $1.67 billion, below the expected $1.70 billion, and adjusted EBITDAR of $329 million, missing forecasts of $351.5 million. Severe winter weather and the absence of one-time accounting benefits were cited as contributing factors.

Despite its performance miss, PENN ended the quarter with $1.5 billion in liquidity. Analysts expect the company to return to profitability in 2025, with projected earnings per share of $0.84. Both Mizuho and Macquarie maintained Outperform ratings, setting price targets at $24.

PENN operates 43 casinos and racetracks across 20 U.S. states.

The proxy fight is expected to culminate at the company’s upcoming annual meeting.