UNITE HERE Urges Other PENN Entertainment Shareholders to Support Proposal to Declassify the Board
PENN (NASDAQ: PENN) shareholders already supported declassification in 2010, yet the Board has not implemented that outcome. In the years since, governance standards have moved in greater favor of annual elections as investor expectations have become clearer. In 2025, declassification proposals were reported to have seen average shareholder support of 77.9%, resulting in a passage rate of 86% across 14 proposals. (Goldberg, Mencher & Flynn,
Annual elections would:
- Support long-term value creation by reinforcing confidence in Board oversight
- Enhance accountability and responsiveness during a period of disruption in the traditional gaming industry created by prediction markets, the growth of internet gaming, and grey market activities such as skill-based games and sweepstakes gambling
- Reduce entrenchment risk and align PENN with governance norms embraced by leading industry peers
Importantly, the proposal is precatory. The Board retains full discretion to determine whether to declassify, and if it does so, to proceed in a manner that is consistent with the law and all applicable gaming regulatory requirements.
The Company’s Opposition—and Why It Falls Short
The Board has recommended against the proposal. We address their reasons cited below.
1. The Company’s Arguments Regarding Gaming Regulations Are Contradicted by the Practices of Gaming Peer Companies with Annual Elections
Ability to Attract Directors
PENN argues that operating in the highly regulated gaming industry under licensing requirements that require “extensive regulatory review and licensing of directors” can “hinder [its] ability to attract talented director candidates.” PENN notes these requirements are “unique to the gaming industry.” But despite these concerns, MGM Resorts International, Caesars Entertainment, Boyd Gaming, Golden Entertainment, and Full House Resorts all maintain annual elections, and all operate in the highly regulated gaming industry. Like PENN, each of the five companies operates under
“Each officer, director and employee of a publicly traded corporation who the Commission determines is or is to become actively and directly engaged in the administration or supervision of, or any other significant involvement with, the gaming activities of the corporation or any of its affiliated or intermediary companies must be found suitable therefor and may be required to be licensed by the Commission.” (See: Nevada NRS 463.637, “Commission” refers to the
PENN does not explain why it would face more difficulty attracting director candidates than gaming industry peers that maintain annual elections.
Large Regional Footprint
PENN states that it has the “largest regional footprint in the industry.” PENN reported as of year-end 2025 that it “owned, managed, or had ownership interests in 42 gaming and racing properties in 19 states” and that it “operates in 28 jurisdictions throughout North America” (
PENN does not explain why its regional footprint would be more of a hindrance to holding annual elections than Caesars’ regional footprint.
Licensure Requirement Before Performance of Duties
PENN argues “more significantly, certain of our jurisdictions, each of which is important to our operations, require directors to obtain licensure before they are permitted to vote on Board matters.” PENN does not name which jurisdictions. MGM Resorts International maintains annual elections and, like PENN, operates under
“A proposed new director, partner, officer, or key person required to be qualified or licensed under the act or these rules by virtue of his or her position with a holding company or affiliate that has control of a
PENN does not explain why its situation is different than, for example,
2. Stability and Long-Term Focus Do Not Require a Classified Board
The Board argues that a classified structure supports long-term strategic decision-making and continuity.
However, the widespread adoption of annual elections across large-cap companies, including in capital-intensive, highly regulated industries, demonstrates that annual elections and long-term thinking are not mutually exclusive. Directors elected annually are still experienced, accountable, and fully capable of overseeing multi-year strategic initiatives. Indeed, annual elections enhance long-term value by ensuring that directors remain continuously accountable for execution.
3. Board Refreshment and Shareholder Engagement Are Not Substitutes for Voting Rights
The Company points to its shareholder engagement program as evidence of responsiveness. The Company also highlights that six of eleven directors have joined within the past four years.
While engagement is important and refreshment is positive, they are not substitutes for shareholder rights. Shareholders’ ability to vote annually on directors is a direct implementation of the shareholder franchise, and helps ensure that refreshment is aligned with shareholders’ priorities.
Conclusion
The proposal to declassify the Board is simple, beneficial for shareholders, and consistent with the practices of gaming industry peers that maintain annual elections and operate in the highly regulated gaming industry. After more than a decade since shareholders first supported declassification, it is time to align PENN’s governance with modern standards of accountability.
We urge you to vote FOR this proposal.
This is not a solicitation of authority to vote your proxy. Please do not send us your proxy card, as it will not be accepted.
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