Non-Vegas casino giant reorganizes to avoid shareholder, union spats
Exactly two weeks to the day after Penn National Gaming, Inc. (Nasdaq: PENN) announced its acquisition of M Resort, a casino workers labor union, UNITE HERE!, issued the following press release that might be of special interest to investors who paid nearly $40/share. (So far, after short-lived giddiness, their stake continues to drop like a rock.)
Read below for the official announcement:
The overwhelming majority of shareholders at Penn National Gaming, Inc. voted last week to change the way the company’s directors are elected. 40 million out of 67 million shares were cast for a shareholder resolution that nominees to the board must receive a majority of the votes cast in order to be seated. Under Penn’s current bylaws, a nominee needs only a single affirmative vote to be elected in uncontested director elections.
“A majority vote standard transforms the director election process from a symbolic process to a meaningful voice for shareholders,” ISS Proxy Advisory Service wrote in a report criticizing Penn National Gaming, Inc. on May 23, 2011.
The shareholder-approved reform comes one year after shareholders voted for another reform measure at Penn that would subject company directors to an annual election, a move designed to increase board accountability. The Penn board has so far failed to implement this measure. UNITE HERE was the sponsor of both resolutions.
Kate O’Neil, Senior Research Analyst at UNITE HERE said, “Overwhelming shareholder support for the proposal to adopt a majority vote standard sends a strong message to the board of Penn National that shareholders are seeking greater accountability. It is our hope that the board will adopt both this measure – and the one that received majority support last year – without delay.”
ISS recommended withhold votes for all director nominees in 2011, citing the board’s failure to enact the successful 2010 proposal for annual director elections. A significant minority of shareholders withheld votes from Directors Peter M. Carlino, Harold Cramer, and Saul V. Reibstein. Cramer, chair of the compensation committee, received over 20 million withhold votes. In past years other members of the compensation committee received significant withhold votes.
Also at the Penn shareholder meeting, shareholders approved executives pay in a new advisory vote required under the Dodd-Frank financial reform law. The majority of shareholders recommended that the advisory vote on executive pay be held annually, despite management’s recommendation that the pay plans be voted on every three years.
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About Penn National Gaming
Penn National Gaming (Nasdaq: PENN) owns, operates or has ownership interests in gaming and racing facilities with a focus on slot machine entertainment. The Company presently operates twenty-six facilities in eighteen jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario. In aggregate, Penn National’s operated facilities feature approximately 29,000 gaming machines, 560 table games, 2,400 hotel rooms and 1.1 million square feet of gaming floor space.
About UNITE HERE!