Unite Here, the labor union representing workers at casino properties across the United States, announced that two of the most influential proxy advisory firms in the country — Glass Lewis and Co. and Institutional Shareholder Services — are recommending that Penn Entertainment shareholders vote in favor of its proposal to declassify the company's board of directors. The endorsements come ahead of Penn's annual shareholder meeting scheduled for June 16. The proposal, if approved, would also move Penn toward annual elections for all board directors.
Unite Here first unveiled its declassification proposal in April, citing a notable piece of corporate governance history: Penn Entertainment shareholders approved a nearly identical measure in 2010, but the company never implemented it. The union is now pressing investors to pass the proposal again, this time with the backing of two advisory services whose recommendations are closely followed by institutional investors that collectively manage trillions of dollars in assets.
Why Board Declassification Matters
Classified, or staggered, boards divide directors into groups that face election in different years, typically on a three-year cycle. This structure makes it significantly harder for shareholders to replace the full board in response to poor performance or strategic disagreements, because only a portion of directors can be voted out in any given year. Proponents of declassification argue that annual elections for all directors make boards more accountable to shareholders and more responsive to concerns about governance and management performance.
ISS and Glass Lewis cited the broad trend in corporate governance away from classified boards. According to data cited in Unite Here's shareholder communications, declassification proposals in 2025 received average shareholder support of 77.9 percent and passed at an 86 percent rate, reflecting a near-consensus view among institutional investors that staggered boards are an outdated governance structure.
The Proposal's Limits and Penn's Response
The proposal is precatory, meaning it is advisory rather than binding. Penn's board retains full discretion to determine whether to declassify, and if it chooses to do so, to proceed in a manner consistent with applicable law and gaming regulatory requirements. Penn has not made a public statement responding directly to the proxy firm endorsements.
The timing is notable given that Penn is simultaneously preparing for the June 24 opening of its new $360 million Hollywood Casino Aurora land-based facility in Illinois and navigating the closure of the Aurora riverboat on June 10. The company's annual meeting will take place while it is executing one of its most significant property transitions in recent memory. Penn Entertainment is one of the largest regional casino operators in the United States, running the ESPN BET sportsbook and dozens of casino resort properties across multiple states. The proxy contest adds a governance subplot to what is otherwise a period of significant operational activity for the company.
