Executives at Penn National Gaming will now receive full salaries after taking a cut in April. The move comes amid a skyrocketing Penn stock price and a positive outlook for the company.
Penn Restores Executive Salaries, Copes with Crisis
Penn National Gaming has reinstated the salaries of its executive team after the company’s CEO, CFO and general counsel decided to forego payment in April when the novel coronavirus outbreak forced the shutdown of all commercial properties across the United States a new filing to the Securities and Exchange Commission has revealed.
CEO Jay Snowden, CFO David Williams, and General Counsel Carl Sottosanti decide to show solidarity with their employees and forego a percentage of their payment until such a time that some normalization in operating results can be seen.
All salaries have been restored to their full amount on October 1. Snowden took a 25% pay cut effective on April 1, and Williams and Sottosanti opted for a 20% lower income during the period. That comes after a rocky first quarter with verticals decreasing rapidly.
The filing specified that restoring salaries was a justified move given the improved liquidity position of the company, adding that it had “entered into amendments to the employment agreements with the executive officers to restore the salaries.”
As per the filing, Snowden will receive $1.4 million, followed by Sottosanti with $695,000 and Williams with $650,000. All three executives agreed to slash their remuneration packages at the same time Penn National announced furloughs in April.
An estimated 26,000 employees had to go on leave nationwide across 41 properties and 19 states in late March. Penn announced layoffs in August, as the fallout of the novel coronavirus has forced the company to make difficult decisions.
In a bid to help secure employees’ livelihoods, Penn paid salaries through April and health benefits through the end of June. However, the company hasn’t said how many employees have successfully returned to work.
Penn Gaming Has Been Expanding during the Pandemic
The company has filed WARN Act notices with regulators to inform about possible layoffs. On the plus side, Penn was able to restore operations at the Tropicana Las Vegas, which it sold to the Gaming and Leisure Properties, but still remains in operation of the property through a lease agreement.
Penn received $307.5 million in rent credits as a result of the agreement. Penn’s share price has been recovering. It has jumped by 800% since March when most casinos’ stock took a tumble.
Deutsche Bank gaming analyst Carlo Santarelli has cautioned that the shares may have been inflated owing to unfounded optimism. He believes Penn’s share may be in for a tumble in 2021.
Despite the difficult times, Penn has been actively ramping up its products and involvement in key markets. In September, the company launched a new app in Pennsylvania, which had 65,000 downloads in the opening week.
Penn National is now going to dive into other key markets. Those include New Jersey, Indiana, Colorado, West Virginia, and Iowa in 2021. Penn similarly acquired a 36% stake in Barstool in January, tapping into the platform’s 66 million viewers.