Penn Expands Board to 11, Settles Proxy Fight With HG Vora

Penn Entertainment has appointed three new independent directors, expanding its board to 11 members. It has also entered into a cooperation agreement with activist investor HG Vora Capital Management, formally ending a year-long proxy fight over the company’s financial performance, governance, and strategic direction.

The appointments — Heather Ace, Jeffrey Fox, and Fabio Schiavolin — were disclosed in a Feb. 23 press release and detailed in a Form 8-K filed with the U.S. Securities and Exchange Commission.

Under the agreement, HG Vora will abide by customary standstill and voting provisions through the 2028 annual meeting cycle. Meanwhile, Penn expands its board and supports the election of Schiavolin at its 2026 Annual Meeting.

The settlement concludes a battle that began in early 2025. HG Vora launched a proxy campaign accusing Penn of lagging its peers on financial performance and of strategic missteps, particularly in its digital pivot.

Cooperation Agreement Formalizes Truce

According to the Form 8-K filing, Penn:

• Increased the size of its board from eight to eleven members
• Appointed Ace and Fox as Class II directors (terms expiring in 2028)
• Appointed Schiavolin as a Class III director (term expiring in 2026)

The company agreed to use its “reasonable best efforts” to support Schiavolin’s election at the 2026 Annual Meeting. That includes listing him on the proxy card and recommending that shareholders vote in his favor.

In addition, Penn agreed to reimburse HG Vora for documented out-of-pocket expenses incurred in connection with its activist campaign, subject to an agreed cap.

HG Vora, in turn, agreed to:

• Vote in favor of the board’s director nominees and against any efforts to remove directors.
• Refrain from launching proxy contests or nominating alternative directors.
• Comply with customary standstill restrictions limiting further activist activity.

The standstill remains in place until 45 days before the nomination deadline for Penn’s 2028 Annual Meeting.

The agreement also requires dismissal, with prejudice, of the lawsuit HG Vora filed against Penn in federal court in May 2025.

The three new appointments, along with the two HG Vora nominees elected at Penn’s 2025 annual meeting, mean five of eleven board seats are now tied directly or indirectly to the activist campaign, marking a significant governance recalibration without a change in executive leadership.

End of a Year-Long Governance Fight

The settlement closes a dispute in which HG Vora has accused Penn’s board of governance failures, poor capital allocation, and strategic missteps.

The dispute intensified after HG Vora nominated three director candidates in early 2025. Penn ultimately agreed to nominate two of them, while reducing the number of available seats.

HG Vora argued that the move effectively altered the election framework and limited shareholder choice. It then filed a lawsuit alleging the board had manipulated the size and composition of its director slate.

Shortly after, the activist launched a dedicated campaign website. It also released a 116-page proxy presentation outlining its proposed governance and strategic reforms.

At PENN’s June 17 annual meeting, shareholders elected two HG Vora nominees — Johnny Hartnett and Carlos Ruisanchez — to the board.

In July, a federal judge denied HG Vora’s request for an expedited trial. The board subsequently formed a Special Litigation Committee to evaluate the claims.

In November, the committee review concluded that the board had acted “in good faith” in connection with the disputed board-seat decisions, prolonging the standoff before negotiations ultimately led to this week’s cooperation agreement.

Digital Strategy Remained a Flashpoint

Although the dispute encompassed broader governance concerns, Penn’s digital strategy remained central to the activist critique.

HG Vora argued that Penn committed more than $4 billion to building an online sports betting business through acquisitions and brand partnerships, without achieving meaningful market-share gains.

Penn acquired theScore Media in 2021 for $2 billion, adding a proprietary technology stack and platform to support its digital ambitions.

The company ultimately withdrew theScore Bet from the market after it acquired 100% of Barstool Sports, ultimately paying more than $500 million for full ownership before divesting the asset for $1 in 2023 as part of a strategic reset.

Following the Barstool exit, Penn spent $1.5 billion to launch ESPN Bet. While it aimed to capture 20% market share, the platform averaged a low single-digit share in most states where it operated.

In November 2025, Penn and ESPN mutually terminated the agreement after only two years into the 10-year contract. During its Q3 earnings call, Penn said it expects a $825 million write-down on the failed venture.

In December 2025, Penn relaunched theScore Bet.