June 10, 2024 3 min read

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PENN CEO Remuneration Package Faces Pushback from Shareholders

More than 44 million votes were cast against the proposed remuneration package of PENN CEO who fetched $15.5 million for 2023

The issue arose on June 4, during the Annual General Meeting, which saw 129,215,217 shares being represented in a voting process that would determine the pay package of Jay Snowden, the company’s boss, who is looking to collect $15.5m, owing to a mix of base salary, stock awards, and incentive plan compensation.

Third of PENN Shareholders Call Top Brass’ Remuneration into Question

He and the chief financial officer, Felicia Hendrix, have come under significant opposition, with 34.3% of all eligible shareholders voting against the pay packages. Hendrix also saw her base salary grow to $844,808 in 2023 from $712,500 previously which, when you include the stock options and other compensations, rose to $4 million.

All of this was revealed as a part of a filing the company made with the US Securities and Exchange Commission. Although the percentage of shareholders is not enough to block the passing of the package it is still enough to demonstrate that there is an internal strife in PENN over C-level executives’ payments.

The meeting also saw shareholders up in arms against David Handler’s reelection as the company’s chair. Some 27% of all votes were against his reelection. Vilma Black-Gupta and Anuj Dhanda’s reelections were also fought back by 27% and 16% of shareholders respectively.

Although pointing to an internal problem, these developments are not entirely unexpected. Last month, The Donerail Group took its cue from activist investors in other companies, including Entain, and openly criticized PENN’s leadership, calling its business model into question and mustering support to threaten the status quo.

ESPN Falls Short, Barstool Sportsbook Sale a Fiasco

This internal revolt, though, might have reached its apex during the general meeting. The Donerail Group was particularly outraged at the fact that the Barstool Sportsbook had been sold back to David Portnoy, himself a controversial figure whose allegedly rough sexual encounters with several women have led to unflattering press coverage. As to the Group, it stated:

“After four years of effort, attention, and billions of dollars of shareholder capital invested, the Company has been unable to disintermediate the online sports betting landscape, as it had forecast.

Moreover, the growing pattern of guidance misses, alongside a demonstrated unyielding appetite to continue to invest in the Company’s fledgling Interactive projects, irrespective of past results and without a clear return framework, has significantly damaged the credibility of this management team and Board of Directors (the “Board”).

We question whether such credibility is beyond repair, as PENN’s shares are now down over 80% in the last three years because of such damage.”

The Donerail Group

The Group similarly lambasted PENN’s qualified success with ESPN Bet, a powerful media property that branched out into sports betting, and which has not (yet) produced the desired results.

The Barstool sale was a particular fiasco with the company coughing up $550 million to acquire it only to sell it to its owner for $1, and then plonk down an additional $1.5 billion in the launch of ESPN Bet.

The solution, believes The Donerail Group? To sell the company to a fitting investor, such as Boyd Gaming, which can then decouple the land-based and digital businesses and sell the online platform to another buyer. To see this through, shareholders would have to come together.

Journalist

Jerome is a welcome new addition to the Gambling News team, bringing years of journalistic experience within the iGaming sector. His interest in the industry begun after he graduated from college where he played in regular local poker tournaments which eventually lead to exposure towards the growing popularity of online poker and casino rooms. Jerome now puts all the knowledge he's accrued to fuel his passion for journalism, providing our team with the latest scoops online.

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