In a statement issued shortly after the release of the ISS report, Penn emphasised that its board had seriously considered all three candidates and chosen to endorse Hartnett and Ruisanchez for election at its 2025 annual meeting, scheduled for 17 June.
Penn pushes back on ISS
Penn took issue with ISS’s for Clifford, calling it unrealistic and inconsistent with the company’s long-term strategy.
“During his time as Penn’s CFO, Mr. Clifford advocated against key initiatives that were critical to succeeding in a competitive market,” the company stated.
Penn stated Clifford expressed “antiquated views of a rapidly changing industry” during his recent interviews with the board’s nominating and corporate governance committee and warned that his approach could hinder constructive board decision-making.
Clifford served as Penn’s CFO between July 2001 and November 2013.
Penn said that while it had engaged in multiple resolution attempts with HG Vora, efforts to reach a broader agreement were unsuccessful.
It also noted that certain state gaming regulators had found HG Vora in violation of institutional waivers, limiting the firm’s ability to influence the company’s governance beyond board nominations.
“We want to assure shareholders that we understand and share their focus on ensuring that Penn’s board of directors is optimally comprised to oversee the company’s execution on a strategic plan to drive shareholder value,” the company said.
ISS recommends full HG Vora slate
The ISS report marks a significant development in the ongoing proxy contest.
The advisory firm recommended shareholders vote for all three HG Vora nominees using the GOLD proxy card.
The firm argued that Penn’s recent performance, strategic missteps, and board composition justify a more substantial refresh.According to HG Vora, ISS stated there is clearly a case for board change, citing underperformance “over all measurement periods,” a “failed” interactive strategy, and a lack of board ability in overseeing management.
The report was particularly critical of Penn’s expansion into online sports betting, calling it a turning point that failed to deliver on expectations.
ISS also said the board lacked sufficient direct gaming industry experience and that Clifford, as a former senior executive at Penn, could provide needed oversight and a contrarian voice.
“Hartnett and Ruisanchez seem to have fortuitously presented the board with a ready-made solution to a problem it was otherwise unprepared to address,” the report added.
ISS concluded that all three candidates deserved shareholder at this year’s meeting.
HG Vora welcomes endorsement
HG Vora Capital Management, which holds a significant stake in Penn, welcomed the ISS recommendation and renewed its call for shareholders to its full slate.
The firm has argued for more ability, stronger industry expertise, and a shift in strategic direction.
HG Vora also received from Egan-Jones Proxy Services, another independent proxy advisor, which has likewise endorsed the election of Clifford, Hartnett, and Ruisanchez.
A critical vote ahead
With just over a week remaining before Penn’s annual meeting, the outcome of the vote could have a significant impact on the company’s future direction.
Penn, which has made a series of acquisitions and digital investments in recent years, has come under increasing pressure from investors concerned about returns and execution.
The company noted that following the meeting, 75% of its directors will have ed the board since 2019, a point it says reflects an ongoing commitment to board refreshment and shareholder value.
