Published on: June 17, 2026, 03:07h.
Updated on: June 17, 2026, 03:07h.
- Penn Entertainment shareholders back proposal for declassifying board
- This marks the second instance of such support from the company’s investors
- Penn is not mandated to act on the declassification
During the annual gathering of regional casino operator Penn Entertainment (NASDAQ: PENN), shareholders favored a proposal to declassify the company’s board, driven by a labor union’s initiative.
UNITE HERE, a labor organization representing approximately 300,000 hospitality and leisure workers throughout the US and Canada, is the force behind the declassification initiative. The union celebrated the outcome of the June 16 vote.
“PENN shareholders have made their preferences clear: they seek annual elections for all board members,” stated Michael Hachey, director of gaming industry research at UNITE HERE. “The Board should now take actionable steps toward achieving declassification.”
Essentially, the union advocates for Penn, which has faced scrutiny over its approach to board member elections, to facilitate annual, transparent elections.
Penn’s Discretion in Implementation
According to the Securities and Exchange Commission (SEC), board elections empower shareholders “to engage in corporate governance.” This can be viewed as a form of investor democracy.
However, there are no binding laws or regulations in the United States requiring publicly traded companies to conduct annual elections. This indicates that while Penn’s investors prefer the UNITE HERE proposal, the gaming company is not obligated to comply with the vote.
In 2010, Penn’s shareholders also favored a similar initiative, but the Ameristar operator chose to retain a classified board. Recently, several notable proxy advisory firms have supported the UNITE HERE initiative, but it remains uncertain if the casino operator will take action.
“Investors will be expecting genuine, prompt responsiveness; not superficial measures that delay progress, and certainly not silence from management,” remarked Derrick Wortes, founder and principal of Cora Strategies, in the press release.
A Challenge Against ‘Insulated’ Boards
Some investor groups contend that, regardless of the industry, declassified boards signal effective corporate governance and align the interests of companies with those of their shareholders.
UNITE HERE, which successfully advocated for board declassification at Caesars Entertainment (NASDAQ: CZR) in 2019, asserts that Penn is an exception in the gaming sector. The union points out that Penn’s competitors, such as Boyd Gaming (NYSE: BYD), Caesars, and MGM Resorts International (NYSE: MGM), all conduct annual director elections. The labor organization further indicates that classified boards can “insulate” directors from shareholder scrutiny and diminish responsiveness to investor concerns.
“By implementing annual elections, PENN would enhance alignment between directors and shareholders, bringing its governance framework in line with investor expectations,” concludes Hachey. “We are eager to see how the Board responds.”