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DEF 14A Filing
PENN Entertainment (PENN) DEF 14ADefinitive proxy
Filed: 23 Apr 24, 4:44pm
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
☒ | No fee required. |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
2 PROXY STATEMENT - 2024 | | |
A LETTER TO OUR SHAREHOLDERS |
| | PROXY STATEMENT - 2024 3 |
A LETTER TO OUR SHAREHOLDERS |
| | Sincerely, | |
| |||
| Jay Snowden CEO & President |
4 PROXY STATEMENT - 2024 | | |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS |
| | DATE AND TIME Tuesday, June 4, 2024 10 a.m. Eastern Time | | | | | LOCATION Live webcast accessible at: www.virtualshareholdermeeting .com/PENN2024 | | | | | RECORD DATE April 5, 2024 |
PROPOSAL | | | BOARD VOTE RECOMMENDATION | | | PAGE REFERENCE | |||
Proposal 1: Election of Class I Directors | | | | | FOR each Nominee | | | ||
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm | | | | | FOR | | | ||
Proposal 3: Advisory Vote to Approve the Compensation of Named Executive Officers | | | | | FOR | | |
| | PROXY STATEMENT - 2024 5 |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS |
YOUR VOTE IS IMPORTANT — HOW TO VOTE: | |||||||||
| | VIA THE INTERNET Go to www.proxyvote.com, available 24/7 | | | | | BY TELEPHONE Use the toll-free number shown on your Proxy Card or Voting Instruction Form and follow the recorded instructions | ||
| | BY MAIL Mark, sign, date and return the enclosed Proxy Card and related instructions in the postage-paid envelope | | | | | DURING THE MEETING Vote through the virtual portal at www.virtualshareholdermeeting .com/PENN2024 |
6 PROXY STATEMENT - 2024 | | |
| | PROXY STATEMENT - 2024 7 |
8 PROXY STATEMENT - 2024 | | |
PROXY STATEMENT SUMMARY |
| | DATE AND TIME Tuesday, June 4, 2024 10 a.m. Eastern Time | | | | | LOCATION Live webcast accessible at: www.virtualshareholdermeeting .com/PENN2024 | | | | | RECORD DATE April 5, 2024 |
PROPOSAL | | | BOARD VOTE RECOMMENDATION | | | PAGE REFERENCE | |||
Proposal 1: Election of Class I Directors | | | | | FOR each Nominee | | | ||
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm | | | | | FOR | | | ||
Proposal 3: Advisory Vote to Approve the Compensation of Named Executive Officers | | | | | FOR | | |
YOUR VOTE IS IMPORTANT — HOW TO VOTE: | |||||||||
| | VIA THE INTERNET Go to www.proxyvote.com, available 24/7 | | | | | BY TELEPHONE Use the toll-free number shown on your Proxy Card or Voting Instruction Form and follow the recorded instructions | ||
| | BY MAIL Mark, sign, date and return the enclosed Proxy Card and related instructions in the postage-paid envelope | | | | | DURING THE MEETING Vote through the virtual portal at www.virtualshareholdermeeting .com/PENN2024 |
| | PROXY STATEMENT - 2024 9 |
PROXY STATEMENT SUMMARY |
10 PROXY STATEMENT - 2024 | | |
PROXY STATEMENT SUMMARY |
ESPN & theScore | | | BEST-IN-CLASS REGIONAL CASINOS | | | CUTTING-EDGE TECHNOLOGY |
Leveraging leading sports media brands to expand our digital footprint through organic cross-sell opportunities | | | Leading properties in a geographically diversified portfolio creates sustained customer engagement and loyalty | | | Fully integrated sports media, sports betting and iCasino platforms drive growth and customer retention |
| | PROXY STATEMENT - 2024 11 |
PROXY STATEMENT SUMMARY |
(1) | Reflects sum of Adjusted EBITDAR for our retail operating segments (Northeast, Midwest, South, West). |
(2) | Reflects the sum of total revenues for our retail operating segments (Northeast, Midwest, South, West). |
(3) | Property-level margin is property-level Adjusted EBITDAR divided by total retail revenue. |
12 PROXY STATEMENT - 2024 | | |
PROXY STATEMENT SUMMARY |
(1) | PENN Entertainment’s Board and Committee leaders are: (i) Jane Scaccetti (Audit Committee Chair); (ii) Barbara Shattuck Kohn (Compensation Committee Chair); (iii) Marla Kaplowitz (Nominating and Corporate Governance Committee Chair); (iv) Thomas Auriemma (Compliance Committee Chair); (v) Barbara Shattuck Kohn (Lead Independent Director); and (vi) David Handler (Board Chair). Each of these Board and Committee leaders are independent directors except for Mr. Auriemma who serves as an independent non-director member of the Compliance Committee. Mr. Auriemma is the Company’s former Vice President, Chief Compliance Officer and former Director of the Division of Gaming Enforcement in New Jersey, with over 30 years of experience as a gaming regulator in the State of New Jersey. |
(2) | As self-identified. |
(3) | Each graphic above excludes John Jacquemin, who is not standing for re-election at our 2024 Annual Meeting. |
| | PROXY STATEMENT - 2024 13 |
PROXY STATEMENT SUMMARY |
BOARD OF DIRECTORS | AGE (1) | DIRECTOR SINCE | INDEPENDENT | AUDIT | COMPENSATION | NOMINATING AND CORPORATE GOVERNANCE | COMPLIANCE (2) | # OF OTHER PUBLIC COMPANY BOARDS | |
Vimla Black-Gupta | 54 | 2021 | Y | | | | | 0 | |
Anuj Dhanda | 61 | 2024 | Y | 1 | |||||
David Handler (3) | 59 | 1994 | Y | | | | 0 | ||
Marla Kaplowitz | 58 | 2020 | Y | | | | | 0 | |
Ronald Naples | 78 | 2013 | Y | | | | | 0 | |
Saul Reibstein | 76 | 2011 | Y | | | 1 | |||
Jane Scaccetti | 70 | 2015 | Y | | | 0 | |||
Jay Snowden (4) | 48 | 2019 | N | | 0 | ||||
Barbara Shattuck Kohn | 73 | 2004 | Y | | | 1 |
Member | Chair | Audit Committee Financial Expert |
(1) | Ages as of our 2024 Annual Meeting. |
(2) | The Compliance Committee is chaired by an independent non-director member, Thomas N. Auriemma. Mr. Auriemma is the Company’s former Vice President, Chief Compliance Officer and former Director of the Division of Gaming Enforcement in New Jersey, with over 30 years of experience as a gaming regulator in the State of New Jersey. |
(3) | Mr. Handler has served as Board Chair since 2019. |
(4) | Mr. Snowden serves as our Chief Executive Officer and President. |
(5) | Mr. Jacquemin is not standing for re-election at our 2024 Annual Meeting. Our Board will be reduced to nine directors effective as of our 2024 Annual Meeting. |
(6) | This table reflects Committee assignments as of our 2024 Annual Meeting. |
14 PROXY STATEMENT - 2024 | | |
PROXY STATEMENT SUMMARY |
| | PROXY STATEMENT - 2024 15 |
PROXY STATEMENT SUMMARY |
CORPORATE GOVERNANCE BEST PRACTICES | |||
ROBUST BOARD AND COMMITTEE COMPOSITION | | | • Independent Board Chair • Separate lead independent Director role • All Directors (except CEO) are independent • Each member of our Audit Committee qualifies as an “audit committee financial expert” as defined by the SEC • All Committees comprised solely of independent members |
REFRESHED AND DIVERSE BOARD | | | • Ongoing and thoughtful Board and Committee refreshment • Three new independent directors appointed in the last four years with extensive marketing, strategy, technology, media, cybersecurity and digital transformation experience to effectively oversee growth strategy • 67%(1) diverse Board based on gender, race/ethnicity and LGBTQ+ identity • 4 out of 6 board leadership roles are held by women |
ALIGNMENT WITH SHAREHOLDER INTERESTS | | | • Annual say-on-pay vote • One class of common stock with equal voting rights • Shareholder engagement program is overseen by the Nominating and Corporate Governance Committee, with engagement efforts led by our Board Chair and the Chairs of our Compensation Committee and Nominating and Corporate Governance Committee • Robust stock ownership guidelines for executives and directors • Policies prohibiting hedging and pledging of PENN securities |
EFFECTIVE RISK OVERSIGHT | | | • Quarterly review of the Company’s risk profile, including risks associated with cybersecurity, human capital management, DE&I, climate change and sustainability • Compliance Committee with broad authority, comprised of independent directors and external non- director compliance professional • Cybersecurity oversight by Board and Audit Committee • Independent directors meet regularly without management • The Compliance Committee receives quarterly updates on whistleblower matters • Comprehensive new director onboarding and continuing education program |
SUCCESSION PLANNING | | | • Extensive CEO and executive leadership succession planning • Robust director succession planning with focus on Board candidates with diverse experience, skills, background, race/ethnicity and gender • Annual Board and Committee self-evaluations |
(1) | Excludes Mr. Jacquemin, who is not standing for re-election at our 2024 Annual Meeting. |
16 PROXY STATEMENT - 2024 | | |
PROXY STATEMENT SUMMARY |
OUTREACH | | | ENGAGED | | | DIRECTOR LED | ||||||
57% | | | Contacted shareholders representing 57% of the Company’s outstanding shares during the off-season | | | 47% | | | Engaged with shareholders representing 47% of the Company’s outstanding shares during the off-season | | | Engagement efforts led by our Independent Board Chair, Compensation Committee Chair and Nominating and Corporate Governance Committee Chair |
Key discussion topics: | |||
• Corporate governance priorities | | | • Cybersecurity risk management |
• Capital allocation strategy and strategic initiatives | | | • Executive compensation program |
RECENT GOVERNANCE ENHANCEMENTS (2023-2024) | | | • In early 2024, appointed Mr. Dhanda, a highly qualified independent director with extensive technology, cybersecurity and business transformation experience, to support our strategy of leveraging PENN’s significant reach to expand our digital footprint, drive our omnichannel strategy and efficiently grow and monetize our customer ecosystem • Transitioned 2024 executive performance-based equity award program design to a 3-year performance period with 70% weighting allocation to financial metrics and made consistent changes to the final unvested portions of the 2023 and 2022 equity grants (covering the two and one-year remaining periods, respectively) • Enhanced proxy disclosure around long-term incentive program metrics and earned performance-based equity awards for the last three performance cycles • Established carbon abatement targets for 2024 and beyond |
ROBUST TRACK RECORD OF PROACTIVE GOVERNANCE CHANGES (2021-2022) | | | • Updated the Nominating and Corporate Governance Committee Charter to require an annual review of each director's independence to ensure recommendations are made to the Board based on annual findings • Diversified performance metrics for the short- and long-term compensation plans • Formalized shareholder engagement effort into a biannual shareholder engagement program overseen by the Nominating & Corporate Governance Committee • Enhanced ESG practices and reporting: • Published EEO-1 data and the first SASB report • Finalized Scope 1 and 2 carbon emissions assessment • Established mandatory company-wide DE&I training for all employees • PENN Interactive received the RG Check iGaming Accreditation from the Responsible Gambling Council (“RGC”), becoming the first U.S. operator to voluntarily undergo this process, which is widely regarded as one of the most comprehensive responsible gambling accreditation programs in the world • Amended stock ownership guidelines for our executive officers to increase holding requirements from 5x to 6x base salary for the CEO and to align all other NEOs at 3x base salary • Appointed Ms. Black-Gupta, a highly-qualified independent director with extensive marketing, strategy, media, and digital transformation experience, to support our strategy of offering integrated entertainment, sports content and casino gaming experiences |
| | PROXY STATEMENT - 2024 17 |
PROXY STATEMENT SUMMARY |
PLANET We're dedicated to safeguarding our natural resources | | | PEOPLE We’re committed to DE&I | | | COMMUNITY We’re challenging conventions in our communities |
• Established inaugural carbon abatement targets to reduce Scope 1 and 2 GHG emissions by 25% by 2030. • Updated our Scope 1 and 2 greenhouse gas inventory and completed our initial Scope 3 greenhouse gas inventory. • Completed PENN’s inaugural CDP climate change disclosure. • Alignment with the Casino and Gaming Industry standard of the Sustainability Accounting Standards Board (“SASB”) reporting framework. • Alignment with the Task Force on Climate-Related Financial Disclosures (“TCFD”) reporting framework. • Procured 100% carbon-free energy for properties located in deregulated jurisdictions. • Diverted from landfills over 4,300 tons of paper, bailed cardboard, scrap metal, glass, plastic and aluminum waste and recycled over 2,000 pallets. Our racetracks diverted over 42,000 tons of agricultural waste to local farms. • LEED certification targeted for two of our current development projects. • PENN’s properties increased their procurement of cage-free eggs and reduced-antibiotic turkey. | | | • New Diverse Vendor Incubator Program implemented to help our current vendors enhance their capacity and grow their businesses. • Exceeded our goals for diverse vendor procurement, with a total spend of over $108M – a 70% increase in companywide diverse spend since implementation of our program in 2020. • Launched our new PENN Women initiative which is intended to increase inclusivity and provide allies and mentorship at all levels of our workforce. • Expanded our talent development offerings in 2023 with the following pilot programs: HR Business Partner Cohort, Mentor Program, Early Career Leadership Academy and Mid-Career Leadership Academy, while relaunching our Gaming and Hospitality Cohorts. | | | • Our team members provided over 9,500 volunteer hours to help those in need. • Created military scholarships at Penn State Berks and Alvernia University to help student veterans and active-duty military students in need of financial support to pursue their educational goals. • Expect to create approximately 1,500 permanent jobs and 1,750 construction jobs as a result of our 4 retail growth projects, which all broke ground in 2023. • Companywide we donated over $8M in support to local charities and veteran focused organizations and generated over $17 million in economic development grants. |
| PENN CARES FOR OUR PEOPLE, OUR COMMUNITIES, AND OUR PLANET PENN Entertainment is deeply committed to good corporate citizenship and serving as a socially responsible partner to our team members, communities and customers. The Nominating and Corporate Governance Committee oversees sustainability risks and initiatives which includes environmental and social responsibility, talent strategy and culture, and our DE&I initiatives. |
| | PROXY STATEMENT - 2024 19 |
PROXY STATEMENT SUMMARY |
2023 Target CEO Compensation | | | 2023 Average Other NEOs Target Compensation | | | |
| | | |
* | The above pie charts reflect the target percent values of new incentives awarded in 2023. These percent values vary somewhat from the grant values reflected in the Summary Compensation Table and the Grants of Plan-Based Awards Table in the CD&A section below, because the values in those tables include portions of performance-based equity awards that reflect awards originally made in 2021, 2022, and 2023 (consistent with SEC disclosure rules). |
2023 PAY AND PERFORMANCE ALIGNMENT |
• In alignment with our commitment to a pay-for-performance philosophy, a significant portion of target executive compensation is at risk, delivered in the form of annual incentives, and long-term equity incentives. • Following market-based compensation adjustments approved for our CEO and other NEOs for 2023, the regular rate of our target annual executive compensation levels remained slightly below the peer group median. • Our short- and long-term incentives were earned at 99.1% and 108.1% of target, respectively, in alignment with our strong 2023 financial and operational performance results, which included successful implementation of financial and omnichannel initiatives prior to the unanticipated change in strategy related to our transformative strategic alliance with ESPN, resulting in the launch of ESPN BET in November 2023. • Realizable compensation for 2023 was 64% of target compensation levels, reflecting the alignment of our executive pay opportunities with company performance. In response to input from shareholders in our engagement sessions, we enhanced this year’s disclosure of the performance metrics to detail threshold, target and maximum performance levels and achieved results. • Additionally, in response to our shareholder preferences, we adopted a three-year performance cycle for the 2024 performance-based equity awards, with pre-determined rigorous financial performance metrics accounting for 70% of the overall metrics and the remaining 30% allocated to key quantitative operational targets. Similarly, we have applied the same multi-year performance metrics to the 2024 – 2025 outstanding portion of the 2023 performance-based equity awards. |
20 PROXY STATEMENT - 2024 | | |
| | PROXY STATEMENT - 2024 21 |
CLASS I DIRECTOR NOMINEES |
Board Recommendation | | | | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH CLASS I DIRECTOR NOMINEE: (I) David Handler; (II) Vimla Black-Gupta; and (III) Anuj Dhanda |
| | KEY SKILLS AND EXPERTISE: • Financial (Capital Markets, Accounting & Tax): Acquired over his nearly 30-year career in investment banking with several leading global investment firms, where he successfully launched and expanded multiple technology sector groups. He most recently co-founded Tidal Partners, a strategic M&A advisory firm. • Strategic Planning / M&A: Gained through decades of advising major technology companies on large- scale, high-profile and industry-defining transactions. Mr. Handler's long-term exposure to the gaming and technology industries, including opportunities created by emerging technologies, is an especially valuable asset to PENN, particularly as it relates to evaluating potential acquisitions in support of the Company's growth strategy. • Technology / Digital: As a co-founder of an M&A advisory firm focused on the technology sector, Mr. Handler contributes to the Board deep strategic insights into the evolving and dynamic industry landscape, expertise in effective risk oversight and the ability to identify strategic opportunities for PENN's omnichannel growth strategy. EXPERIENCE: Tidal Partners – Co-Founder and Partner (2022-Present) • Strategic M&A advisory firm focused on the technology industry Centerview Partners – Partner, founding Head of the Technology Group (2008-2022) • Investment banking and advisory firm UBS – Managing Director, Co-Head of Americas Technology Investment Banking (2006-2009) • Global investment bank Bear Stearns & Company – Managing Director, Co-Head of Communications Technology Investment Banking (2000-2006) • Specialized financial services company and investment bank Jefferies – Managing Director, Head of New York Investment Banking (1995-2000) • Investment banking and capital markets firm | |
David Handler | | ||
Class I Director (Independent) Age: 59 Director Since: 1994 Board Chair Since: 2019 Education: • NYU Stern School of Business: BA, Marketing • NYU Stern School of Business: MBA, Finance | |
| | KEY SKILLS AND EXPERTISE: • Industry Experience (Gaming, Hospitality, Media): Acquired over Ms. Black-Gupta's more than 25- year executive career in global marketing roles, including as Global Chief Marketing Officer at Equinox. In this role, she led the enterprise-wide marketing strategy for over 300 equinox sport clubs and a pipeline of 10 lifestyle Equinox hotels with a focus on customer experience and digital engagement that successfully elevated the lifestyle brand, enhanced client loyalty and expanded omnichannel growth opportunities. • Sales & Marketing: Developed through her multiple roles focused on the development and execution of marketing strategies and digital media engagement tactics for global consumer brands. This included overseeing a digital marketing strategy for the $1B Bobbi Brown Cosmetics brand in over 150 countries, strategically positioning marketing for Procter and Gamble’s Gillette Venus and Oral B brands, and pioneering the beauty industry's first digital channel launch in support of Estée Lauder's Bobbi Brown brand, as well as her current role as Co-Founder of Ourself, where she is driving proprietary innovation in Bio-Technology for the fast growing direct-to-consumer and professional brand. • Strategic Planning / M&A: Obtained throughout numerous executive leadership roles, where Ms. Black-Gupta was responsible for strategy development and M&A initiatives, including at Estée Lauder, where she worked closely with the corporate development team to support the company's M&A strategy to fuel brand innovation and growth, and in her current role as Co-Founder and previously CEO of Ourself, where she oversaw go-to-market product and commercial strategy. EXPERIENCE: Ourself – Chief Executive Officer and Co-Founder (Co-Founder beginning 2021, CEO 2022-2024) • An innovative skincare biotech skincare brand Equinox Fitness Club and Hotel – Global Chief Marketing Officer (2017-2019) • Luxury fitness company Bobbi Brown Cosmetics – Senior Vice President of Global Marketing (2013-2017) • Global premium beauty brand Estée Lauder – Vice President Global Marketing Idea Bank (2008-2013) • A multinational cosmetics company Procter & Gamble – Global Marketing Director (2005-2007) • Global consumer goods corporation Various executive global marketing leadership roles for Gillette and Procter & Gamble – (1997-2005) | |
Vimla Black-Gupta | | ||
Class I Director (Independent) Age: 54 Director Since: 2021 Committees: • Compensation • Nominating and Corporate Governance Education: • Duke University: BA • Northwestern University's Kellogg School of Management: MBA | |
22 PROXY STATEMENT - 2024 | | |
CLASS I DIRECTOR NOMINEES |
| | KEY SKILLS AND EXPERTISE: • Technology / Digital: Obtained through numerous executive leadership roles with consumer- oriented and digitally-enabled businesses with responsibilities for technological transformation efforts, including customer digital engagement and intelligence, application, and supply chain modernization. At Albertsons Companies (NYSE: ACI), he led the shift to exclusively cloud-based operations and is currently focused on accelerating business growth through the use of AI. In recognition of his contributions to advancing the use of technology in business, Mr. Dhanda was inducted into the CIO Hall of Fame. • Cybersecurity: Acquired through more than 15 years of service as Chief Information Officer with leading national retail and financial services companies, overseeing the security of IT architecture, application platforms and data, including in Mr. Dhanda’s current role with Albertsons Companies where he oversees the security and reliability of the payments platform that processes approximately $78 billion in sales. • Strategic Planning / M&A: Gained by serving in strategic planning roles at JP Morgan (NYSE: JPM) and executive roles with PNC Financial Services Group (NYSE: PNC), which focused on leading business development in high potential markets and enterprise-wide transformation strategies. He played critical roles in leading business and technology functions across multiple mergers and acquisitions by PNC. At Albertsons Companies, Mr. Dhanda oversaw the post-acquisition integration of the company and Safeway to a common platform and is currently leading the Integration planning for Albertsons for their planned merger with Kroger. EXPERIENCE: Albertsons Companies, Inc. (NYSE: ACI) – EVP and Chief Technology and Transformation Officer (Since 2023), EVP and Chief Information Officer (2015-2022) • Leading Fortune 100 grocery store chain Giant Eagle, Inc. – SVP, Digital Commerce and Chief Information Officer (2013-2015) • American supermarket chain The PNC Financial Services Group, Inc. (NYSE: PNC) – EVP and CIO (2008-2013), SVP and CIO, PNC Bank (2005-2008), SVP and Manager, Eastern Markets (1997-1999), Small Business Lending (1995-1997) • Diversified U.S.-based financial services institution JP Morgan Chase & Co. (NYSE: JPM) (Formerly JP Morgan & Co.) – SVP, Marketing and Business Planning Manager, Consumer Bank (1992-1995), Strategic Planning Officer, Regional Banking Operations Division (1989-1992), Management Consultant, Retail Operations and Technology (1988-1989) • Leading global financial services firm Citigroup, Inc. (NYSE: C) – Management Consultant (1986-1987) • Diversified financial services holding company | |
Anuj Dhanda | | ||
Class I Director (Independent) Age: 61 Director Since: 2024 Committees: • Compliance Education: • University of Delhi: BA, Commerce • Rutgers University: MBA • Rutgers University: PhD, Finance Public Board Directorships: • BlueLinx Holdings (NYSE: BXC) (2023-Present) | |
Board Recommendation | | | | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH CLASS I DIRECTOR NOMINEE: (I) David Handler; (II) Vimla Black-Gupta; and (III) Anuj Dhanda |
| | PROXY STATEMENT - 2024 23 |
CONTINUING DIRECTORS |
| | KEY SKILLS AND EXPERTISE: • Industry Experience (Gaming, Hospitality, Media) and Government Affairs: Gained over Ms. Kaplowitz's more than 35-year career in the media industry, including her current role as Chief Executive Officer of 4A's, a trade association for advertising agencies that serves corporate members representing more than 85% of total U.S. advertising spend. In her current role, Ms. Kaplowitz works closely with members of the U.S. Congress to address critical issues pertaining to the media and digital media industry and the industry's evolving regulatory landscape. • Sales & Marketing: Acquired through her extensive career in marketing and communications, including executive leadership roles focused on identifying strategic growth areas to build consumer loyalty and strengthen brand equity. During Ms. Kaplowitz's nearly 25 years at media communication agencies, she led marketing campaigns for global high-profile brands across personal care, restaurant and financial services sectors. Ms. Kaplowitz has successfully guided clients through impacts of evolving technologies on consumer behavior, including risks and opportunities associated with digital consumer experiences, omnichannel growth strategies and data privacy risks. • Sustainability: Obtained through her leadership roles in advertising, marketing and media that required understanding of the evolving impact of climate risks on various industries and evolving consumer preferences. Ms. Kaplowitz's work has included advising global companies on the FTC's updated Green Guides on the use of environmental marketing claims, as well as the shifting regulatory and legislative landscape across state jurisdictions. EXPERIENCE: American Association of Advertising Agencies (4A's) – President and CEO (2017-Present) • Trade association serving more than 600 member agencies throughout the U.S. MEC Global (now Wavemaker Global) – CEO of North America (2011-2017) • Global media agency. Mediavest (now Spark Foundry) – EVP, Managing Director (2006-2011), SVP, Group Media Director (1999-2002) • A full-service media agency that provides marketing, content and technology solutions. Ammirati Puris Lintas – SVP, Group Media Director (1996-1999) • Advertising Agency | |
Marla Kaplowitz | | ||
Class III Director (Independent) Age: 58 Director Since: 2020 Committees: • Nominating and Corporate Governance, Chair • Compensation Education: • UC Santa Barbara: BA, Sociology | |
| | KEY SKILLS AND EXPERTISE: • Risk Management: Acquired during Ms. Scaccetti’s almost 45-year career as a practicing CPA, including at Drucker & Scaccetti, which she co-founded, and at Laventhol & Horwath, where she was the first woman to be named tax partner. In these roles, she provided counsel to U.S. and international companies on a wide range of complex tax planning, corporate transactions and business strategy matters. • Cybersecurity: Developed through her leadership role at Drucker & Scaccetti, where she oversaw the creation and continued evolution of information security systems and controls to safeguard the firm’s information infrastructure. Ms. Scaccetti’s expertise was further enhanced through her role as the chair of the audit committee at multiple public companies for over three decades and her service on the board of a $3B+ in revenue non-profit institution where cybersecurity is paramount to protecting personal health records and information; annual CPA continuing education requirements; and cybersecurity oversight and cybersecurity training from the National Association of Corporate Directors. • HR / Talent Management / DE&I: Gained through her experience working with corporate clients on succession planning, compensation and organizational development of key staff, as well as her extensive experience managing people and developing talent as a partner, principal and CEO for accounting and business advisory firms. EXPERIENCE: Armanino LLP – Of Counsel (2022-Present) • The successor company of Drucker & Scaccetti, P.C. Drucker & Scaccetti, P.C. – Chief Executive Officer (2013-2021), Partner (1990-2021) • A public accounting and business advisory firm Laventhol & Horwath – Partner (1987-1990), Staff/Manager (1977-1987) • An international accounting firm | |
Jane Scaccetti | | ||
Class III Director (Independent) Age: 70 Director Since: 2015 Committees: • Audit, Chair • Compliance Education: • Temple University's Fox School of Business: BBA • Villanova Law School: MA, Taxation Public Board Directorships: • Myers Industries, Inc (2016-2021) • The Pep Boys (2002-2016) | |
24 PROXY STATEMENT - 2024 | | |
CONTINUING DIRECTORS |
| | KEY SKILLS AND EXPERTISE: • Industry Experience (Gaming, Hospitality, Media): Gained from Mr. Snowden’s more than 25- year successful career in the highly regulated and rapidly evolving gaming and sports betting industry, and hospitality and entertainment sectors. Prior to being appointed as CEO in 2020, he served as PENN’s President and Chief Operating Officer and as SVP of Regional Operations. Mr. Snowden previously spent 12 years with Caesars Entertainment, where he acquired significant gaming industry management experience across several regional and destination markets, including as Senior Vice President and General Manager of both Caesar’s and Harrah’s Resorts in Atlantic City. • HR / Talent Management / DE&I: Acquired through his executive leadership career overseeing talent strategies at large corporations, including talent integration initiatives following strategic transactions. At PENN, Mr. Snowden oversaw the launch of the expansive DE&I strategy and evolution of talent initiatives to support the growth of the Interactive segment. • Technology / Digital: Since being named CEO, Mr. Snowden has led PENN’s expansion into sports media, entertainment and technology, including the Company’s acquisition of theScore and transformative strategic alliance with ESPN. His deep industry knowledge and digital transformation expertise provide unique perspectives on the Company’s strategic navigation of its broader omnichannel expansion. EXPERIENCE: PENN Entertainment • CEO and President (2020-Present) • President and Chief Operating Officer (2017-2019) • Chief Operating Officer (2014-2017) • Senior Vice President of Regional Operations (2011-2014) Caesars and Harrah's Resorts Atlantic City – Senior Vice President and General Manager (2010-2011) • Casino resort and hotel Caesars Entertainment Corporation – Various leadership positions in St. Louis, San Diego and Las Vegas (1998-2010) • Leading global gaming and hospitality resort chain | |
Jay Snowden | | ||
Class III Director (Executive Director) Age: 48 Education: • Harvard University: BA • Washington University in St. Louis: MBA | |
| | KEY SKILLS AND EXPERTISE: • Financial (Capital Markets, Accounting & Tax): Acquired over Ms. Shattuck Kohn’s 35-year career in investment banking, capital markets and project finance, where she advised companies on M&A and capital allocation strategies. Additionally, as president of an investment banking firm she co-founded, Shattuck Hammond Partners, Ms. Shattuck Kohn was responsible for overseeing the company’s financial reporting and compliance processes. Ms. Shattuck Kohn contributes this extensive financial expertise to the Board to evaluate potential acquisitions and financing opportunities. • Regulatory / Public Policy: During her extensive investment banking career, Ms. Shattuck Kohn specialized in navigating the highly regulated healthcare industry at both the state and federal government levels, obtaining regulatory approvals for multiple transactions across various jurisdictions. • Corporate Governance: Ms. Shattuck Kohn brings over 20 years of public company director experience, and currently serves as a director on the boards of Fluent (NASDAQ: FLNT), an advertising and marketing services company, and Emblem Health, one of the nation’s largest nonprofit health plans. She previously served as a director of Computer Task Group (NYSE: CTG), a division of Sunlife Financial Corporation. EXPERIENCE: Hammond Hanlon Camp LLC – Principal (2012-2018) • Strategic advisory and investment banking firm Shattuck Hammond Partners – Principal, Founder and President (1993-2012, when acquired by Morgan Keegan – Raymond James) • An investment banking firm Cain Brothers, Shattuck & Company – Principal and Co-Founder (1983-1993) • A healthcare financial advisory firm Goldman Sachs & Co. – Vice President and Manager of Healthcare Investment Banking Group (1976-1983) • Multinational investment bank and financial services company | |
Barbara Shattuck Kohn | | ||
Class II Director (Independent) Age: 73 Director Since: 2004 Committees: • Compensation, Chair • Audit Education: • Connecticut College: BA, Environmental Studies Public Board Directorships: • Fluent, Inc. (2019-Present) | |
| | PROXY STATEMENT - 2024 25 |
CONTINUING DIRECTORS |
| | KEY SKILLS AND EXPERTISE: • Cybersecurity: Developed through his over 40 years of service in executive leadership and independent director roles at public companies, which included both oversight and execution of information security and customer data privacy programs. • Government Affairs: Acquired through holding a number of government leadership positions, including Chair of the Pennsylvania Stimulus Oversight Commission, Chief Accountability Officer for the Commonwealth of Pennsylvania, Chair of the Federal Reserve Bank of Philadelphia and various roles in the White House. Additionally, as CEO of a public specialty chemical company, Mr. Naples led regulatory compliance efforts and was responsible for maintaining strong relationships with government agencies. • Sustainability: Obtained extensive expertise while serving in the White House as Special Assistant to the Head of the Federal Energy Administration and while serving as Executive Director of a Presidential Task Force on energy problems. As a CEO of several public companies and during his most recent service on the board of Glatfelter Corp., a sustainably engineered products company, Mr. Naples developed expertise in establishment, execution and oversight of sustainability practices and processes to strengthen customer access and market position, and preparedness for evolving sustainability requirements. EXPERIENCE: Commonwealth of Pennsylvania – Chief Accountability Officer (2009-2011) Quaker Chemical Corporation (NYSE: KWR) – Chief Executive Officer and Chairman (1995-2008) • Public specialty chemical company serving the metalworking and manufacturing industries worldwide Federal Reserve Bank of Philadelphia – Board Chair (2001-2005) Hunt Manufacturing Company – Chief Executive Officer and Board Chair (1981-1995) • Consumer and commercial product business with retail distribution Presidential Task Force on Energy – Executive Director (1975-1976) White House – White House Fellow (1974-1975), serving as: • Assistant to the Counselor to the President for Economic Affairs • Special Assistant to the Head of the Federal Energy Administration U.S. Army – Captain (1967-1971) | |
Ronald Naples | | ||
Class II Director (Independent) Age: 78 Director Since: 2013 Committees: • Compliance • Nominating and Corporate Governance Education: • U.S. Military Academy at West Point: BS • Fletcher School at Tufts University: MA • Harvard Business School: MBA Public Board Directorships: • Glatfelter Corp. (2000-2021) • Quaker Chemical Corp. (1997-2009) • Hunt Manufacturing Company (1981-1995) | |
| | KEY SKILLS AND EXPERTISE: • Financial (Capital Markets, Accounting and Tax): Acquired through more than 40 years of service in the public accounting industry as a licensed CPA advising public and private companies, including in the gaming industry. Mr. Reibstein developed significant familiarity with PENN’s growth drivers and capital allocation strategies from serving as the Company’s Chief Financial Officer between 2013 and 2016. In that role, he oversaw PENN’s capital restructuring, obtained financing for new property development and gained insights into every aspect of the Company’s operations. • Regulatory / Public Policy: Gained through his first-hand experience working with state gaming regulators while serving as CFO of PENN. This included working with regulators throughout the licensing application process and overseeing the Company’s compliance program across multiple jurisdictions. • Corporate Governance: Developed through Mr. Reibstein’s service as Independent Board Chair at Vishay Precision Group (NYSE: VPG). His previous roles on Vishay’s Board included Chair of the Audit Committee and a member of both its Compensation and Nominating and Corporate Governance Committees, which provided him with extensive experience across all key governance aspects of a public company. EXPERIENCE: PENN Entertainment – Executive Advisor (2017), Senior Vice President, Chief Financial Officer (2013-2016), Treasurer (2014-2016) CBIZ, Inc. (NYSE: CBZ) – Member of the senior management team holding a number of positions, including, most recently: Executive Managing Director and Head of New York Office (2004-2013) • Professional services company specializing in accounting, tax, insurance and human resources advisory BDO Seidman – Regional Managing Partner (1998-2003), Partner (1993-2003) • National accounting services firm | |
Saul Reibstein | | ||
Class II Director (Independent) Age: 76 Director Since: 2018 (and previously a director from 2011-2014) Committees: • Audit • Compensation Education: • Fox School of Business at Temple University: BBA, Accounting and Finance Public Board Directorships: • Vishay Precision Group, Inc. (2010-Present) | |
26 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
WHAT WE DO | | | WHAT WE DON'T DO | ||||||
| | 89% Independent Directors. Eight of our nine directors have been determined by us to be “independent” as defined by the Nasdaq Rules. | | | | | No Poison Pill or Shareholder Rights Plan. We do not have a “poison pill” or shareholder rights plan. | ||
| | Independent Chair. Our Board Chair is an independent director. | | | | | No Significant Related Party Transactions. We do not currently have any significant related party transactions. In addition, no immediate family relationships exist between any of our directors or executive officers and any of our other directors or executive officers. | ||
| | Ongoing Board Refreshment. Three new independent directors appointed in the last four years demonstrates our commitment to ensuring that our Board meets our evolving oversight needs. | | | | | No Option Trading or Short Selling of Our Securities. Our insider trading policy prohibits our directors and officers from trading in options, warrants, puts and calls or similar instruments on Company securities or sell Company securities “short”. | ||
| | Regular Board and Committee Self-Evaluations. The Board of Directors and each Committee conduct a comprehensive annual self-evaluation process. | | | | | No Hedging of Our Securities. Our insider trading policy prohibits our directors and officers from engaging in any hedging or monetization transactions involving our securities. | ||
| | Systemic Risk Oversight by Board and Committees. Our Board has overall responsibility for risk oversight, while each of our Audit, Compensation, Nominating and Corporate Governance, and Compliance Committees monitor and address risks within the scope of their expertise and charter. | | | | | No Pledging of Our Securities. Our insider trading policy prohibits our directors and officers from purchasing our securities on margin or pledging our securities as collateral for margin or other loans. | ||
| | Entirely Independent Committees. All the members of our Audit, Compensation, and Nominating and Corporate Governance Committees are independent. | | | | | No Single-Trigger Change in Control Severance Rights. Acceleration of equity vesting is provided only upon a combination of a change in control and a qualified termination. | ||
| | Audit Committee Financial Experts. Each member of our Audit Committee qualifies as an “audit committee financial expert” as defined by the SEC. | | | | | No Gross-Up Payments to Cover Excise Taxes. We do not provide tax gross-ups to our officers in connection with a change in control severance or other compensation, benefits or executive perquisites. | ||
| | Stock Ownership Guidelines for Directors. Our stock ownership guidelines require that each of our directors accumulate a holding of shares having a value of 5x the value of the annual retainer amount | | | | | |||
| | Stock Ownership Guidelines for Executives. Our stock ownership guidelines require our CEO to accumulate a holding of shares equal to 6x his annual base salary, and our other executives to accumulate a holding of shares equal to 3x their respective annual base salaries. | | | | | |||
| | Shareholder Outreach. The Company has a long-standing practice of frequent communication and discussion with shareholders, and formally expanded this program to include annual off-cycle outreach in 2022. | | | | | |||
| | Clawback Policy. We maintain discretion to clawback incentive awards in the event of misconduct and maintain a robust mandatory clawback policy covering excess incentive based compensation in the event of a restatement. | | | | |
| | PROXY STATEMENT - 2024 27 |
CORPORATE GOVERNANCE MATTERS |
CORPORATE GOVENANCE GUIDELINES | | | The Board has adopted and regularly reviews Corporate Governance Guidelines (the “Corporate Governance Guidelines”) that are intended to provide a structure which permits our Board and management to effectively pursue the Company’s objectives for the benefit of its shareholders and other constituencies. The Corporate Governance Guidelines include policies and procedures relating to, among other items, the role, structure and composition of the Board; Board procedures and leadership; risk oversight; use of outside consultants; and conflicts of interest. The Board and the Nominating and Corporate Governance Committee regularly consider the efficacy of the Corporate Governance Guidelines and the policies referenced therein. |
CODE OF BUSINESS CONDUCT | | | The Board has adopted and regularly reviews the Company’s Code of Business Conduct (the “Code of Conduct”), which applies to all directors and employees of the Company, including its principal executive officer, principal financial officer and principal accounting officer. The Code of Conduct is designed to, among other things, promote ethical behavior, deter wrongdoing, address potential conflicts of interest, and encourage both compliance with applicable laws and full and accurate reporting in the Company’s filings with the SEC. The Code of Conduct also provides for a 24-hour hotline that any employee, patron, vendor or other third party can use to report, anonymously if they so choose, any suspected fraud, financial impropriety or other alleged wrongdoing. These reports are promptly investigated and receive the highest level of management attention, with particular focus from the Company’s Chief Compliance Officer; Vice President, Internal Audit; Chief Human Resources Officer and Legal Department, as appropriate. Subsequently, senior management provides investigation summaries to the Compliance Committee and the Audit Committee. |
WHERE TO FIND OUR CORPORATE GOVERNANCE DOCUMENTS | | | www.pennentertainment.com/investors/corporate-governance Please visit our website to view or obtain copies of our Corporate Governance Guidelines, committee charters and Code of Business Conduct. The information found on, or accessible through, our website is not incorporated into, and does not form a part of, this Proxy Statement or any other report or document we file with or furnish to the SEC. You may also obtain, free of charge, a copy of our Corporate Governance Guidelines, committee charters and Code of Business Conduct by directing your request in writing to Secretary, PENN Entertainment, Inc., 825 Berkshire Boulevard, Wyomissing, PA 19610. Additional information relating to the corporate governance of our Company is also set forth below and included in other sections of this Proxy Statement. |
28 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
| | PROXY STATEMENT - 2024 29 |
CORPORATE GOVERNANCE MATTERS |
30 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
| | | | |||
Marla Kaplowitz Appointed Nov. 2020 | | | Vimla Black-Gupta Appointed Jun. 2021 | | | Anuj Dhanda Appointed Mar. 2024 |
| | | | |||
| | | | John Jacquemin Not standing for re-election at our 2024 Annual Meeting |
| | PROXY STATEMENT - 2024 31 |
CORPORATE GOVERNANCE MATTERS |
• Consulting with the Board Chair regarding the information, agendas and schedules of Board and Board Committee meetings, including the ability to add items to the agendas for any meeting; • Scheduling, setting the agenda for and serving as Chair of meetings of independent directors; • Serving as principal liaison between the independent directors and the Board Chair and between the independent directors and senior management; • Presiding at all meetings of the Board at which the Board Chair is not present, including executive sessions of the independent directors; and • In the event of the death, incapacity, resignation or removal of the Board Chair, serving as the acting Board Chair until a new Board Chair is selected. |
2023 Board and Committee Meetings | | | BOARD MEETINGS HELD IN 2023: 19 |
32 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
AUDIT COMMITTEE MEMBERS | | | MEETINGS HELD IN 2023: 10 |
| | | | |||
Jane Scaccetti Chair | | | Barbara Shattuck Kohn Member | | | Saul Reibstein Member |
• | Serving as an independent and objective party to monitor the Company’s financial reporting process and internal control system; |
• | Reviewing and appraising the audit efforts of the Company’s independent auditors and internal auditors and monitoring their independence; |
• | Maintaining free and open communication with and among the independent auditors, the internal auditors, and the financial and senior management of the Company and the Board; |
• | Reviewing and pre-approving all conflicts of interest and related-person transactions involving Board members or executive officers; and |
• | Engaging with the Chief Information Officer and broader Cybersecurity Committee to discuss cybersecurity risks and potential adjustments to cybersecurity policies, standards and processes. |
| | PROXY STATEMENT - 2024 33 |
CORPORATE GOVERNANCE MATTERS |
COMPENSATION COMMITTEE MEMBERS | | | MEETINGS HELD IN 2023: 4 |
| | | | | | ||||
Barbara Shattuck Kohn Chair | | | Marla Kaplowitz Member | | | Vimla Black-Gupta Member | | | Saul Reibstein Member |
• | Annually evaluating the performance of all executive officers and approving – and for the CEO, recommending to the Board for approval – all executive officer compensation design and levels, employment agreements and separation agreements; |
• | Reviewing and recommending for Board approval the performance criteria, goals and objectives of short-and long-term incentive plans; |
• | Reviewing executive compensation programs annually to determine whether they are properly coordinated and are achieving their intended purposes; |
• | Assessing the Company’s leadership succession planning; |
• | Approving the incentive awards that the CEO may grant to employees other than executive officers; |
• | Monitoring trends and best practices in executive compensation; |
• | Periodically reviewing executive compensation administration policies; |
• | Recommending director compensation to the Board; and |
• | Formulating and administering the Company’s stock ownership guidelines. |
34 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE MEMBERS | | | MEETINGS HELD IN 2023: 3 |
| | | | |||
Marla Kaplowitz Chair | | | Ronald Naples Member | | | Vimla Black-Gupta Member |
• | Identifying and recommending, for the Board’s selection, director nominees, including candidates recommended by shareholders; |
• | Overseeing regular self-evaluations of the Board, its Committees, and its directors and making recommendations for improvement based on collected feedback; |
• | Overseeing ESG risks and initiatives, including environmental and sustainability initiatives, social responsibility and DE&I; |
• | Annually reviewing the Company’s corporate governance principles and guidelines; |
• | Reviewing and recommending the appropriate structure, composition and size of the Board and its Committees; |
• | Considering the Board’s leadership structure, including the separation of the Board Chair and CEO roles and the appointment of a Lead Independent Director; |
• | Overseeing the Company's culture and talent strategy; |
• | Making recommendations on the eligibility criteria for new Board and Committee members, including the skills, expertise, diversity and independence that should be represented on the Board and its Committees; and |
• | Overseeing the Company’s orientation programs for new directors and continuing education programs for directors. |
| | PROXY STATEMENT - 2024 35 |
CORPORATE GOVERNANCE MATTERS |
COMPLIANCE COMMITTEE MEMBERS | | | MEETINGS HELD IN 2023: 5 |
| | | | | | ||||
Thomas Auriemma Chair | | | Anuj Dhanda Member | | | Jane Scaccetti Member | | | Ronald Naples Member |
• | Assessing the adequacy of the Company’s compliance policies and procedures; |
• | Assessing the effectiveness of the Company’s compliance efforts, particularly the training on and implementation of compliance procedures; |
• | Reviewing executive compensation programs annually to determine whether they are properly coordinated and are achieving their intended purposes; |
• | Monitoring audits and investigations conducted or overseen by the Company’s compliance personnel; |
• | Monitoring any administrative investigations of and disciplinary actions against the Company or its executives; |
• | Reporting to the Board any matters of concern regarding the Company’s regulatory compliance; and |
• | Evaluating new directors for compliance with suitability standards. |
36 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
AUDIT COMMITTEE | | | • Oversees integrity of financial statements and financial disclosures, effectiveness of the internal controls, the internal audit function, the external independent auditor, compliance with legal and regulatory requirements, information and cybersecurity, and exposure to major financial risks. • Responsible for overseeing annual Enterprise Risk Management assessment. • Receives regular updates from the Chief Information Officer on cybersecurity matters. |
COMPENSATION COMMITTEE | | | • Oversees risks related to compensation programs, executive compensation matters, talent management, and, in coordination with the Board, succession planning for the CEO and senior management. • A discussion of the compensation risk assessment process undertaken by the Compensation Committee is described on page 55. |
NOMINATING & CORPORATE GOVERNANCE COMMITTEE | | | • Oversees risks associated with Board structure and director succession planning, including Board diversity, ESG and DE&I initiatives, and other governance policies and practices. • Oversees and receives regular reports from the Chairs of the Company's ESG Committee and Diversity Committee. |
COMPLIANCE COMMITTEE | | | • Oversees risks associated with the Company’s compliance with various gaming regulatory laws and regulations and the adequacy and effectiveness of the Company’s gaming regulatory compliance efforts, as well as the Company’s anonymous whistle-blower hotline. • Receives quarterly reports from the Chief Compliance Officer and the Legal Department on material Compliance Committee and legal matters. |
| | PROXY STATEMENT - 2024 37 |
CORPORATE GOVERNANCE MATTERS |
CYBERSECURITY COMMITTEE | | | ESG COMMITTEE | | | DIVERSITY COMMITTEE |
Focuses on information and cybersecurity risks and readiness and oversees a robust cybersecurity program, which employs security scanning and monitoring tools, regular gap and threat assessments and audits and enterprise-wide security awareness exercises and training, as well as the procurement of insurance for cyber events, including ransomware coverage. Chaired by the Chief Information Officer, who engages with our Audit Committee and the Board directly in accordance with our Cyber Incident Response Policy, in the event the Company experiences any material cyber events. | | | Comprised of senior management from different departments within the Company, focuses on developing and implementing policies and practices designed to foster a culture that helps to attract and retain diverse talent, and reinforces our longstanding commitment to being a trusted and valued member of our communities and a responsible steward for the environment. Our SVP, Public Affairs & Government Relations serves as Chair of the ESG Committee and provides regular quarterly reports to the Board on the Company's ESG initiatives and reports to the Nominating and Corporate Governance Committee at every regular meeting. | | | Formed under the executive sponsorship of our CEO and comprised of senior management and team members from different levels of the organization to formalize and enhance the Company’s DE&I practices both within the Company and in our communities. Chaired by the SVP of Regional Operations and provides regular reports to the CEO, the Board and the Nominating and Corporate Governance Committee on the Company’s DE&I initiatives. |
KEY RISK MANAGEMENT OVERSIGHT AREAS | |||
• Market and macroeconomic environment • Gaming legislation, regulatory matters, compliance and legal issues • Technology, information and cybersecurity • Business continuity • Capital allocation and capital markets | | | • Human capital and talent development • Board and executive succession • Compensation matters • Financial reporting • Corporate social responsibility, including ESG and DE&I • Regulatory compliance |
38 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
| | PROXY STATEMENT - 2024 39 |
CORPORATE GOVERNANCE MATTERS |
| | FALL | | | | | WINTER | | | | | SPRING | | | | | SUMMER | ||||
Board-led off-season engagement with shareholders to obtain feedback following the Annual Meeting. Respond to shareholder inquiries and proposals to engage. | | | Review off-season shareholder feedback with the full Board and relevant committee to assess potential enhancements to the executive compensation, corporate governance and sustainability practices. | | | Publish Annual Report, Proxy Statement and Corporate Sustainability Report. Board-led shareholder engagement to discuss items on the Annual Meeting agenda. | | | Review feedback and results from the Annual Meeting, corporate governance best practices, proxy season trends and regulatory developments with the full Board and relevant Committee(s) to identify key engagement priority topics and initiatives. |
WE ALSO REGULARLY COMMUNICATE WITH SHAREHOLDERS THROUGH A NUMBER OF RECURRING FORUMS, INCLUDING: | |||||||
• Quarterly Earnings Presentations • SEC Filings • Annual Report and Proxy Statement | | | • Annual Meeting of Shareholders • Investor Meetings, Conferences and Web Communications |
40 PROXY STATEMENT - 2024 | | |
CORPORATE GOVERNANCE MATTERS |
OUTREACH | | | ENGAGED | | | DIRECTOR LED | ||||||
57% | | | Contacted shareholders representing 57% of the Company’s outstanding shares during the off-season | | | 47% | | | Engaged with shareholders representing 47% of the Company’s outstanding shares during the off-season | | | Engagement efforts led by our Independent Board Chair, Compensation Committee Chair and Nominating and Corporate Governance Committee Chair |
2023 Off-season Shareholder Engagement - Key Discussion Topics | |||
• Corporate governance priorities • Cybersecurity risk management | | | • Capital allocation strategy and strategic initiatives • Executive compensation program |
| | PROXY STATEMENT - 2024 41 |
CORPORATE GOVERNANCE MATTERS |
42 PROXY STATEMENT - 2024 | | |
| | PROXY STATEMENT - 2024 43 |
PR0POSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Board Recommendation | | | | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024. |
44 PROXY STATEMENT - 2024 | | |
DIRECTOR COMPENSATION |
NAME | | | FEES EARNED OR PAID IN CASH ($) (3) | | | STOCK AWARDS ($) (1) (2) | | | TOTAL ($) |
Vimla Black-Gupta | | | 70,000 | | | 249,995 | | | 319,995 |
David Handler | | | 50,000 | | | 375,007 | | | 425,007 |
John Jacquemin(5) | | | 55,000 | | | 249,995 | | | 304,995 |
Marla Kaplowitz | | | 75,000 | | | 249,995 | | | 324,995 |
Barbara Shattuck Kohn | | | 80,000 | | | 249,995 | | | 329,995 |
Ronald Naples | | | 65,000 | | | 249,995 | | | 314,995 |
Saul Reibstein | | | 70,000 | | | 249,995 | | | 319,995 |
Jane Scaccetti | | | 85,000 | | | 249,995 | | | 334,995 |
Anuj Dhanda(4) | | | — | | | — | | | — |
(1) | Reflects aggregate grant date fair value of stock awards granted in 2023, which does not include any cash fees that directors voluntarily elected to receive in shares of restricted stock as detailed in footnote (3) below. The amounts listed are calculated based on the closing price on the day prior to grant date computed in accordance with FASB ASC Topic 718. |
(2) | As of December 31, 2023, the following stock awards were outstanding: (i) for Ms. Black-Gupta 10,933 shares of restricted stock; (ii) for Mr. Handler, 14,520 shares of restricted stock; (iii) for Mr. Jacquemin, 10,420 shares of restricted stock; (iv) for Ms. Kaplowitz, 8,541 shares of restricted stock; (v) for Ms. Shattuck Kohn, 8,541 shares of restricted stock; (vi) for Mr. Naples, 8,541 cash settled restricted stock units and 2,221 shares of restricted stock; (vii) for Mr. Reibstein, 8,541 cash settled restricted stock units and 2,392 shares of restricted stock; and (viii) for Ms. Scaccetti 11,445 shares of restricted stock. |
(3) | As described above, in 2023 each non-employee director could elect to receive his or her retainer fees in cash or shares of restricted stock, which vest on the first anniversary of the date of grant. This column reflects director compensation eligible to be paid in cash, which consists of the annual Board retainer and any applicable fees for committee members and committee chairs. Each of the following directors elected to receive restricted stock in lieu of such amounts eligible to be paid in cash, in the following amounts: Mr. Handler — $50,000; Ms. Scaccetti — $85,000; Mr. Jacquemin — $55,000; Mr. Naples — $65,000; Mr. Reibstein — $70,000; and Ms. Black-Gupta — $70,000. |
(4) | Mr. Dhanda was appointed to the Board in 2024, and therefore was not paid any compensation in 2023. |
(5) | Mr. Jacquemin is not standing for re-election at the 2024 Annual Meeting. |
| | PROXY STATEMENT - 2024 45 |
EXECUTIVE OFFICERS |
NAME | | | AGE (1) | | | POSITION |
Jay Snowden | | | 48 | | | Chief Executive Officer, President and Director |
Felicia Hendrix | | | 55 | | | Executive Vice President, Chief Financial Officer |
Todd George | | | 54 | | | Executive Vice President, Operations |
Chris Rogers | | | 48 | | | Executive Vice President, Chief Strategy Officer and Secretary |
(1) | Ages as of our 2024 Annual Meeting. |
46 PROXY STATEMENT - 2024 | | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
5% SHAREHOLDERS, OFFICERS AND DIRECTORS | | | NUMBER OF SHARES BENEFICIALLY OWNED | | | PERCENTAGE OF COMMON STOCK |
Beneficial owners of 5% or more of our common stock: | | | | | ||
FMR LLC (1) | | | 15,824,941 | | | 10.42% |
The Vanguard Group, Inc. (4) | | | 14,729,920 | | | 9.70% |
HG Vora Capital Management (2) | | | 14,500,000 | | | 9.55% |
BlackRock, Inc. (3) | | | 13,009,868 | | | 8.57% |
Executive Officers and Directors: | | | | | ||
Vimla Black-Gupta | | | 32,987 | | | 0.02% |
Anuj Dhanda | | | 0 | | | 0.00% |
David Handler | | | 223,450 | | | 0.15% |
John Jacquemin (8) | | | 120,842 | | | 0.08% |
Marla Kaplowitz | | | 26,203 | | | 0.02% |
Ronald Naples | | | 20,587 | | | 0.01% |
Saul Reibstein (6) | | | 37,055 | | | 0.02% |
Jane Scaccetti | | | 79,324 | | | 0.05% |
Barbara Shattuck Kohn (7) | | | 28,541 | | | 0.02% |
Jay Snowden (5) | | | 2,314,598 | | | 1.52% |
Felicia Hendrix (5) | | | 95,231 | | | 0.06% |
Todd George (5) | | | 218,640 | | | 0.14% |
Chris Rogers (5) | | | 132,463 | | | 0.09% |
All current executive officers and directors as a group (13 persons) (6) | | | 3,329,921 | | | 2.19% |
(1) | Based on its Schedule 13G/A filed with the SEC on February 9, 2024, the number of shares in the table includes shares beneficially owned as of December 31, 2023, by FMR LLC and Abigail P. Johnson. FMR LLC has sole voting power over 15,103,485 shares, shared voting power over 0 shares, sole dispositive power over 15,824,941 shares and shared dispositive power over 0 shares. Abigail P. Johnson has sole voting power over 0 shares, shared voting power over 0 shares, sole dispositive power over 15,824,941 shares and shared dispositive power over 0 shares. The address of the entity and individual listed above is 245 Summer Street, Boston, Massachusetts 02210. |
(2) | Based on its Schedule 13D/A filed with the SEC on January 16, 2024, the number of shares in the table includes share beneficially owned as of January 12, 2024, by HG Vora Capital Management LLC. HG Vora Capital Management LLC has sole voting power over 0 shares, shared voting power over 14,500,000 shares, sole dispositive power over 0 shares and shared dispositive power over 14,500,000 shares. The address of HG Vora Capital Management LLC is 330 Madison Avenue, 21st Floor, New York, NY 10017. |
(3) | Based on its Schedule 13G/A filed with the SEC on January 25, 2024, the number of shares in the table includes shares beneficially owned as of December 31, 2023, by BlackRock, Inc. and its listed affiliates. BlackRock, Inc. has sole voting power over 12,365,398 shares, shared voting power over 0 shares, sole dispositive power over 13,009,868 shares and shared dispositive power over 0 shares. The address of BlackRock, Inc. is 50 Hudson Yards, New York, New York 10001. |
(4) | Based on its Schedule 13G/A filed with the SEC on February 13, 2024, the number of shares in the table includes shares beneficially owned as of December 29, 2023, by The Vanguard Group, Inc. and its listed affiliates. The Vanguard Group, Inc. has sole voting power over 0 shares, shared voting power over 53,742 shares, sole dispositive power over 14,531,892 shares and shared dispositive power over 198,028 shares. The address of Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
(5) | The number of shares in the table includes shares that may be acquired upon the exercise of outstanding options or options that may be exercised within 60 days from the Record Date, as follows: Mr. Snowden, 1,515,753, Ms. Hendrix, 42,792; Mr. George, 152,315, Mr. Rogers, 87,812, and all current executive officers and directors as a group, 1,798,672 shares. |
(6) | The number of shares in the table excludes 150 shares owned by Mr. Reibstein’s spouse, as to which shares Mr. Reibstein disclaims beneficial ownership. |
(7) | The number of shares in the table excludes 1,750 shares owned by the estate of Ms. Shattuck Kohn’s late spouse, as to which shares Ms. Shattuck Kohn disclaims beneficial ownership. |
(8) | Mr. Jacquemin is not standing for re-election at the 2024 Annual Meeting. |
| | PROXY STATEMENT - 2024 47 |
COMPENSATION COMMITTEE REPORT |
| | | | | | ||||
Barbara Shattuck Kohn Chair | | | Marla Kaplowitz Member | | | Vimla Black-Gupta Member | | | Saul Reibstein Member |
48 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
| | | | | | ||||
Jay A. Snowden Chief Executive Officer, President and Director | | | Felicia R. Hendrix Executive Vice President, Chief Financial Officer | | | Todd George Executive Vice President, Operations | | | Chris Rogers Executive Vice President, Chief Strategy Officer and Secretary |
| | PROXY STATEMENT - 2024 49 |
EXECUTIVE COMPENSATION |
(1) | Reflects sum of Adjusted EBITDAR for our retail operating segments (Northeast, Midwest, South, West). |
(2) | Reflects the sum of total revenues for our retail operating segments (Northeast, Midwest, South, West). |
(3) | Property-level margin is property-level Adjusted EBITDAR divided by total retail revenue. |
50 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
2023 Target CEO Compensation | | | 2023 Average Other NEOs Target Compensation | | | |
| | | |
| | PROXY STATEMENT - 2024 51 |
EXECUTIVE COMPENSATION |
52 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
OUTREACH | | | ENGAGED | | | DIRECTOR LED | ||||||
57% | | | Contacted shareholders representing 57% of the Company’s outstanding shares during the off-season | | | 47% | | | Engaged with shareholders representing 47% of the Company’s outstanding shares during the off-season | | | Engagement efforts led by our Independent Board Chair, Compensation Committee Chair and Nominating and Corporate Governance Committee Chair |
| | PROXY STATEMENT - 2024 53 |
EXECUTIVE COMPENSATION |
| | | | | | | | | | ||||||
| | COMPONENT | | | CEO | | | OTHER NEOS | | | KEY CHARACTERISTICS | | | 2023 PERFORMANCE METRICS | |
FIXED PAY | | | Base Salary | | | | | | | • Fixed cash compensation designed to compensate executives for their day- to-day responsibilities based on the job responsibilities, individual performance, experience, expertise and qualifications | | | N/A | ||
VARIABLE PAY | | | SHORT-TERM INCENTIVE PROGRAM (“STIP”) | ||||||||||||
| Short-Term Incentive Plan (“STIP”) | | | | | | | • Cash compensation tied to the achievement of pre-determined quantitative performance goals • Aligns a significant portion of target cash compensation to the achievement of near-term EBITDAR goals that support our long-term growth strategy | | | Adjusted EBITDAR | ||||
| LONG-TERM INCENTIVE PROGRAM (“LTIP”)* | ||||||||||||||
| Performance- Based Equity (50% Weighting of Total LTIP) | | | | | | | • Equity incentive designed to motivate achievement of pre-set performance goals throughout a three-year performance period to drive long-term shareholder value • Performance metrics reflect key drivers of our long-term growth, including incentives to advance our omnichannel growth strategy, as well as to encourage progress on key sustainability initiatives • Settling in shares of our restricted stock to align interests of our executives with those of our shareholders, promote an ownership mentality, and motivate long-term shareholder value creation | | | Omnichannel • Loyalty Database Activations • Loyalty App Registrations • Retail to Online Registrations • Online to Retail Activations Interactive • iCasino Handle • Online Sportsbook Handle ESG/Sustainability • Key metrics that promote inclusive culture across our organization, encourage inclusive leadership and incentivize progress on making our operations more energy efficient | ||||
| Stock Options (50% Weighting of Total LTIP) | | | | | | | • Equity incentives motivate executives to build long-term shareholder value • Award vests ratably over a four-year period to encourage long-term retention | | | Stock options only deliver value to executives to the degree our stock price appreciates after the grant date, strongly aligning executive interests with shareholder value creation and motivating sustained, long-term outperformance |
* | The performance-based equity weighting in the table above reflects the target values of new incentives awarded in 2023. These values vary somewhat from the grant values reflected in the Summary Compensation Table and the Grants of Plan-Based Awards Table, below, since the values in these tables include portions of performance-based equity grants that were part of performance-based equity awards originally made in 2021, 2022, and 2023. |
54 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
In determining the final payouts, the Compensation Committee approved adjustments to both short-and long-term incentive programs that it believed more reasonably represented full-year 2023 performance results achieved by our executive team, as follows: • STIP Adjustments: Interactive segment results for the period following our decision to launch ESPN BET were excluded from the calculation of Adjusted EBITDAR. The Compensation Committee determined that it was appropriate to calculate Adjusted EBITDAR by only accounting for Interactive segment results for the period from January through the end of June, prior to the Company’s decision to launch ESPN BET, and that doing so accurately reflected management’s strong performance in 2023, distinct from the unanticipated change in Interactive strategy. These adjustments resulted in an increase of executive STIP achievement from 78.1% to 99.1% of target, as set out in more detail in “2023 STIP Awards” below. Please see Appendix “A” for details on reconciliation of GAAP to non-GAAP financial measures. • LTIP Adjustments: The Compensation Committee exercised its discretion to reduce the achievement level for the 2023 performance-based equity awards for our executive team by excluding Interactive segment goals from the LTIP calculation entirely and including omnichannel results only for January to October 2023, the period prior to the launch of ESPN BET. By doing so, the Compensation Committee sought to limit any artificial inflation of the LTIP achievement resulting from the success of the ESPN BET launch. Through these discretionary reductions, the Compensation Committee lowered LTIP achievement from 141.4% to 108.1% of target, reducing performance-based equity awards to our executives by 33%, which the Compensation Committee believed to reflect management’s performance for the year more accurately than the unadjusted LTIP goals. |
| | PROXY STATEMENT - 2024 55 |
EXECUTIVE COMPENSATION |
COMPENSATION COMMITTEE (comprised solely of independent directors and reports to the Board) | | | • Oversees risks associated with the Company’s compensation policies and practices; • Evaluates and determines the appropriate executive compensation philosophy and objectives for PENN Entertainment; • Reviews and approves annually the executive compensation peer group; • Recommends the compensation of our CEO, subject to approval by the independent members of the Board; • Approves the appropriate design and levels of our executive compensation program and compensation arrangements for our other NEOs; • Approves the performance metrics, goals, payout ranges and other elements used in the incentive performance- based compensation plans for our NEOs; and • Conducts an annual evaluation of our CEO’s performance in executive session. |
INDEPENDENT MEMBERS OF THE BOARD | | | • Review the Compensation Committee’s annual evaluation of the CEO’s performance; and • Consider the Compensation Committee’s recommendations with regard to our CEO compensation and, if appropriate, approve changes in target pay levels, incentive program design and final payouts. |
INDEPENDENT COMPENSATION CONSULTANT (Exequity) | | | • Provides advice and assistance to the Compensation Committee in carrying out its duties and responsibilities with respect to the Company’s executive compensation programs and non-employee director compensation; and • Regularly attends Compensation Committee meetings and also communicates with the Compensation Committee Chair outside meetings regarding matters related to the Compensation Committee’s responsibilities. |
CHIEF EXECUTIVE OFFICER (with the assistance of Chief Human Resources Officer) | | | • Provides input to the Compensation Committee with respect to the compensation-setting process to ensure that compensation programs are aligned with our strategic objectives and reflect appropriate performance goals; • Provides the Compensation Committee with input regarding performance of NEOs (other than himself); and • Provides the Compensation Committee with input regarding executive performance and recommends base salary and annual short- and long-term incentive targets for each of our NEOs (other than himself). |
56 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
COMPENSATION COMMITTEE PEER GROUP | |||
Boyd Gaming Corporation | | | MGM Resorts International |
Caesars Entertainment, Inc. | | | Red Rock Resorts, Inc. |
DraftKings Inc. | | | Roku, Inc. |
Electronic Arts Inc. | | | Sirius XM Holdings, Inc. |
Las Vegas Sands Corp. | | | Wynn Resorts, Ltd. |
Lions Gate Entertainment Corporation | | | Zynga inc. |
| | PROXY STATEMENT - 2024 57 |
EXECUTIVE COMPENSATION |
NAMED EXECUTIVE OFFICER | | | 2023 BASE SALARY | | | 2022 BASE SALARY | | | PERCENT INCREASE FROM 2022 |
Jay Snowden | | | $1,800,000 | | | $1,800,000 | | | 0% |
Felicia Hendrix | | | $850,000 | | | $715,000 | | | 19% |
Todd George | | | $950,000 | | | $900,000 | | | 6% |
Chris Rogers | | | $725,000 | | | $675,000 | | | 7% |
58 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
For the reasons described above, and as detailed in “Impact of ESPN Strategic Alliance on 2023 Compensation Outcomes” on page 54, the Compensation Committee approved adjustments to target and achieved performance levels for Adjusted EBITDAR, which resulted in an increase in payout levels under our STIP to 99.1% of target, from the unadjusted achievement of 78.1% of target, as follows: • First, the performance target and actual results for Corporate Adjusted EBITDAR were adjusted from $1.923 billion to $1.915 billion, and from $1.513 billion to $1.897 billion, respectively, to remove Interactive results from both the performance target and actual results, resulting in an adjusted payout percentage of 99.6% of target; and • The Compensation Committee then used its discretion to reduce the overall STIP achievement by 50-basis points, from 99.6% to 99.1%, to reflect the Interactive segment’s performance from January to June, the period prior to the Company’s decision to enter into the strategic long-term alliance with ESPN. |
| | PROXY STATEMENT - 2024 59 |
EXECUTIVE COMPENSATION |
2023 STIP Performance Metric | | | Threshold (85% of Target) | | | Target (100% of Target) | | | Maximum (115% of Target) | | | Achievement ($) | | | Payout (% of Target) |
Corporate Adjusted EBITDAR | | | $1.647B | | | $1.938B | | | $2.229B | | | $1.513B | | | 78.1% |
Final Adjustment to Corporate Adjusted EBITDAR | | | $1.628B | | | $1.915B | | | $2.202B | | | $1.897B | | | 99.1% |
NAMED EXECUTIVE OFFICER | | | 2023 ANNUAL INCENTIVE OPPORTUNITY (% of Base Salary) | | | TARGET STIP OPPORTUNITY | | | ADJUSTED STIP PAYOUT LEVEL | | | ACTUAL 2023 STIP PAYOUT |
Jay Snowden | | | 250% | | | $4,500,000 | | | 99.1% | | | $4,365,000 |
Felicia Hendrix | | | 100% | | | $850,000 | | | 99.1% | | | $824,500 |
Todd George | | | 100% | | | $950,000 | | | 99.1% | | | $929,417 |
Chris Rogers | | | 100% | | | $725,000 | | | 99.1% | | | $703,250 |
60 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
| | PROXY STATEMENT - 2024 61 |
EXECUTIVE COMPENSATION |
EQUITY VEHICLE | | | PURPOSE | | | WEIGHTING FOR CEO AND OTHER NEOS | | | 2023 PERFORMANCE METRICS |
Performance- Based Equity Awards | | | Incentivize performance on key financial, strategic and operational metrics that drive success of the transformation strategy and our ability to create long-term value | | | | | • 2023 Performance-Based Equity Award is split into two tranches: • Tranche 1: 1/3 of the target award value, with payout contingent upon strategic and operational metrics tied to omnichannel, interactive segment and ESG priorities, based on a one-year performance period for 2023. Any earned shares are subject to service-based vesting requirements through the end of the three-year performance period • Tranche 2: 2/3 of the target award value, with payout for the two-year performance period, covering 2024 and 2025, based on the new performance metrics structure of 70% allocation to financial performance measures and the remaining 30% weighting allocated to strategic operational metrics • Payouts range between 0-150% of target | |
Stock Options | | | Incentivize creation of long-term shareholder value through successful execution of the growth priorities | | | | | • Deliver value only if the Company’s stock price appreciates from the grant date • Vest and become exercisable at a rate of one-fourth per year over 4 years to support retention |
62 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
NAMED EXECUTIVE OFFICER | | | 2023 TARGET LTIP AWARD VALUE | | | PERFORMANCE-BASED EQUITY (50% of Target LTIP Value) | | | STOCK OPTIONS (50% of Target LTIP Value) |
Jay Snowden | | | $11,130,000 | | | $5,565,000 | | | $5,565,000 |
Felicia Hendrix | | | $2,975,000 | | | $1,487,500 | | | $1,487,500 |
Todd George | | | $3,325,000 | | | $1,662,500 | | | $1,662,500 |
Chris Rogers | | | $1,740,000 | | | $870,000 | | | $870,000 |
• | Omnichannel metrics (60%) focused on incentivizing growth of PENN Play database and retail and online cross-sell opportunities to generate a greater brand loyalty and spend-per-customer, which are critical elements of our omnichannel growth strategy to support revenue growth and drive profitability. The Compensation Committee set targets to align with our operating plan and projections for new customer growth and expectations around marketing and promotional spend for the year. The Committee considered the performance targets to be rigorous and requiring a significant level of effort to be achieved. |
• | 2H Interactive metrics (30%) designed to incentivize growth of online sports betting and iCasino market share, which are key indicators of our future growth in the digital space. In light of the planned migration of the Barstool Sportsbook onto our proprietary technology stack in the second half of the year, the Compensation Committee set Interactive metrics based on performance for the second half of the year. This was done to both account for the unique operating environment during the pre-migration portion of the year, and to incentivize a seamless integration effort and minimize potential disruptions associated with a significant technological migration. |
• | ESG metrics (10%) promote inclusive culture across our organization, encourage inclusive leadership and incentivize progress on making our operations more energy efficient. |
| | PROXY STATEMENT - 2024 63 |
EXECUTIVE COMPENSATION |
64 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
AWARD YEAR | | | METRICS | | | WEIGHTING(1) | | | ACTUAL PAYOUT % of Target | | | TOTAL EARNED SHARES FOR 2021 % of Target | | | TOTAL EARNED SHARES FOR 2022 % of Target | | | TOTAL EARNED SHARES FOR 2023 % of Target | | | TOTAL PAYOUT % of Target |
2023 AWARD | | | Omnichannel | | | 86% | | | 103.5% | | | | | | | | | ||||
| Interactive | | | n/a | | | n/a | | | | | | | 108.1% | | | N/A | ||||
| ESG | | | 14% | | | 135.6% | | | | | | | | | ||||||
2022 AWARD | | | Omnichannel | | | 50% | | | 141.6% | | | | | 99.6% | | | 108.1% | | | N/A | |
| iCasino Market Share | | | 30% | | | 0% | | | | |||||||||||
| Ontario Launch | | | 10% | | | 141.8% | | | | |||||||||||
| ESG | | | 10% | | | 146.5% | | | | |||||||||||
2021 AWARD | | | Adj. EBITDAR Margin | | | 50% | | | 150% | | | 150% | | | 99.6% | | | 108.1% | | | 119.2% |
| Online Platform Launch | | | 50% | | | 150% | |
(1) | Weightings for 2023 Award reflect the impact of Compensation Committee discretionary adjustments to exclude Interactive results for the entire year and only include Omnichannel achievements from January 1 to October 31, 2023, the period prior to the launch of ESPN BET. |
NAMED EXECUTIVE OFFICER | | | 2023 AWARD (First Tranche) | | | 2022 AWARD (Second Tranche) | | | 2021 AWARD (Third Tranche) |
Jay Snowden | | | 67,191 | | | 41,538 | | | 14,009 |
Felicia Hendrix | | | 17,799 | | | 6,464 | | | 2,698 |
Todd George | | | 19,893 | | | 7,236 | | | 3,009 |
Chris Rogers | | | 10,410 | | | 6,103 | | | 2,387 |
| | PROXY STATEMENT - 2024 65 |
EXECUTIVE COMPENSATION |
• | PHASE I - “Stock Price Hurdle Award”: an equity-based grant with performance vesting conditions tied to the achievement of aspirational stock price hurdles, which must be maintained for 60 consecutive trading days, during the period ending December 31, 2025; and |
• | PHASE II - “Relative TSR Hurdle Award”: an equity-based award that, contingent upon achievement of at least one milestone under the Stock Price Hurdle Award (Phase I), provides an opportunity to earn additional shares if the Company’s five-year TSR measured at the end of 2026 and 2027 equals or exceeds the 75th percentile of the S&P 500 index. |
| | PROXY STATEMENT - 2024 67 |
EXECUTIVE COMPENSATION |
68 PROXY STATEMENT - 2024 | | |
EXECUTIVE COMPENSATION |
POSITION | | | REQUIRED VALUE OF SHARES HELD |
CHIEF EXECUTIVE OFFICER | | | Six (6) times base salary |
OTHER EXECUTIVE OFFICERS | | | Three (3) times base salary |
| | PROXY STATEMENT - 2024 69 |
COMPENSATION TABLES AND ARRANGEMENTS |
EXECUTIVE NAME AND PRINCIPAL POSITION | | | YEAR | | | SALARY ($) | | | BONUS ($) | | | STOCK AWARDS ($) (a) | | | OPTION AWARDS ($) (a) | | | NON-EQUITY INCENTIVE PLAN COMPENSATION ($) (b) | | | ALL OTHER COMPENSATION ($) (c) | | | TOTAL ($) |
Jay Snowden Chief Executive Officer and President | | | 2023 | | | 1,800,000 | | | — | | | 3,388,480 | | | 5,564,999 | | | 4,365,000 | | | 423,826 | | | 15,542,305 |
| 2022 | | | 1,800,000 | | | — | | | 2,146,326 | | | 4,814,999 | | | 4,696,343 | | | 617,946 | | | 14,075,614 | ||
| 2021 | | | 1,786,154 | | | — | | | 53,054,562 | | | 4,050,022 | | | 6,750,000 | | | 246,476 | | | 65,887,214 | ||
Felicia Hendrix Executive Vice President, Chief Financial Officer | | | 2023 | | | 844,808 | | | — | | | 751,055 | | | 1,487,504 | | | 824,500 | | | 100,150 | | | 4,008,017 |
| 2022 | | | 712,500 | | | — | | | 405,381 | | | 857,987 | | | 746,197 | | | 91,433 | | | 2,813,498 | ||
| 2021 | | | 537,500 | | | 375,000 | | | 518,491 | | | 779,989 | | | 975,000 | | | 25,000 | | | 3,210,980 | ||
Todd George Executive Vice President, Operations | | | 2023 | | | 948,077 | | | — | | | 839,580 | | | 1,662,504 | | | 929,417 | | | 100,196 | | | 4,479,774 |
| 2022 | | | 854,962 | | | — | | | 914,511 | | | 960,475 | | | 923,853 | | | 108,325 | | | 3,762,126 | ||
| 2021 | | | 722,404 | | | — | | | 1,589,576 | | | 870,014 | | | 1,087,500 | | | 55,920 | | | 4,325,414 | ||
Chris Rogers (d) Executive Vice President, Chief Strategy Officer and Secretary | | | 2023 | | | 723,079 | | | — | | | 526,479 | | | 869,992 | | | 703,250 | | | 91,979 | | | 2,914,779 |
| 2022 | | | 671,202 | | | — | | | 464,331 | | | 810,051 | | | 704,504 | | | 89,843 | | | 2,739,931 | ||
| 2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
(a) | Amounts set forth in the Stock Awards and Option Awards columns represent the aggregate grant date fair value of awards granted in each year as computed in accordance with ASC 718, disregarding estimates of forfeitures related to service- based vesting conditions. Performance Award values are based upon their probable outcome of the performance condition as of the grant date. For compensation purposes, Performance Awards are not considered granted until such time that the performance goals are established. For additional information about the assumptions used in these calculations, see (i) footnote (a) in the Grants of Plan Based Awards Table below, and (ii) Notes 2 and 16 to our audited consolidated financial statements included in our 2023 Annual Report. The amounts presented in the Stock Awards column for each named executive officer during 2023 include the grant date fair value of their awards as follows: |
(b) | The amounts reflect cash payments for 2023 pursuant to the Company’s annual short-term incentive plan, which provided for the payment of incentive compensation upon the Company’s achievement of pre-established performance goals. A discussion of our annual short-term incentive plan may be found in our CD&A under “Annual Short-Term Incentive Plan.” |
(c) | For Mr. Snowden, All Other Compensation in 2023 consisted of: (i) $324,817 in Company matching contributions under the Company’s Deferred Compensation Plan (“DCP”); (ii) $8,551 in Company paid insurance premiums; (iii) $20,300 in tax and financial planning; (iv) $6,600 in matching 401(k) contributions; and (v) $63,558 representing aggregate incremental cost for use of the Company’s aircraft which is based on variable costs of operating the aircraft including fuel costs, landing costs and repairs and maintenance. |
(d) | Mr. Rogers became a named executive officer of the Company in 2022 and, therefore, in accordance with SEC regulations, only compensation information for the fiscal year in which each became a named executive officer is included in the Summary Compensation Table. |
70 PROXY STATEMENT - 2024 | | |
COMPENSATION TABLES AND ARRANGEMENTS |
PERFORMANCE AWARD COMPENSATION DISCLOSED FOR 2023 | ||||||||||||||||||
YEAR | | | DISCLOSED VS. DESIGN | | | 2021 | | | 2022 | | | 2023 | | | 2024 | | | 2025 |
2023 Performance Award | | | Plan Design Value | | | — | | | — | | | 100% | | | — | | | — |
| Value Disclosed in Summary Compensation Table | | | — | | | — | | | 33% | | | 33% | | | 33% | ||
2022 Performance Award | | | Plan Design Value | | | — | | | 100% | | | — | | | — | | | — |
| Value Disclosed in Summary Compensation Table | | | — | | | 33% | | | 33% | | | 33% | | | — | ||
2021 Performance Award | | | Plan Design Value | | | 100% | | | — | | | — | | | — | | | — |
| Value Disclosed in Summary Compensation Table | | | 33% | | | 33% | | | 33% | | | — | | | — |
NAME | | | GRANT DATE (a) | | | AWARD DATE (a) | | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS ($) | | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (#) | | | ALL OTHER STOCK AWARDS: (#) | | | ALL OTHER OPTION AWARDS (#) (b) | | | EXERCISE PRICE OF OPTION AWARDS ($/SHARE) | | | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS ($)(c) | ||||||||||||
| THRESHOLD ($) | | | TARGET ($) | | | MAXIMUM ($) | | | THRESHOLD (#) | | | TARGET (#) | | | MAXIMUM (#) | | |||||||||||||||||||
Jay Snowden | | | — | | | — | | | 2,250,000 | | | 4,500,000 | | | 6,750,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| 1/4/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 296,566 | | | 29.27 | | | 5,564,999 | ||
| 3/8/2023(d) | | | 4/12/2021 | | | — | | | — | | | — | | | 6,483 | | | 12,965 | | | 19,448 | | | — | | | — | | | — | | | 386,746 | ||
| 3/8/2023(e) | | | 3/9/2022 | | | — | | | — | | | — | | | 19,222 | | | 38,443 | | | 57,665 | | | — | | | — | | | — | | | 1,146,755 | ||
| 3/8/2023(f) | | | 3/8/2023 | | | — | | | — | | | — | | | 31,093 | | | 62,185 | | | 93,278 | | | — | | | — | | | — | | | 1,854,979 | ||
Felicia Hendrix | | | — | | | — | | | 425,000 | | | 850,000 | | | 1,275,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| 1/4/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 79,271 | | | 29.27 | | | 1,487,504 | ||
| 2/28/2023(d) | | | 4/12/2021 | | | — | | | — | | | — | | | 1,249 | | | 2,497 | | | 3,746 | | | — | | | — | | | — | | | 75,160 | ||
| 2/28/2023(e) | | | 2/15/2022 | | | — | | | — | | | — | | | 2,991 | | | 5,982 | | | 8,973 | | | — | | | — | | | — | | | 180,058 | ||
| 2/28/2023(f) | | | 2/28/2023 | | | — | | | — | | | — | | | 8,237 | | | 16,473 | | | 24,710 | | | — | | | — | | | — | | | 495,837 | ||
Todd George | | | — | | | — | | | 475,000 | | | 950,000 | | | 1,425,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| 1/4/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 88,597 | | | 29.27 | | | 1,662,504 | ||
| 2/28/2023(d) | | | 4/12/2021 | | | — | | | — | | | — | | | 1,393 | | | 2,785 | | | 4,178 | | | — | | | — | | | — | | | 83,829 | ||
| 2/28/2023(e) | | | 2/15/2022 | | | — | | | — | | | — | | | 3,349 | | | 6,697 | | | 10,046 | | | — | | | — | | | — | | | 201,580 | ||
| 2/28/2023(f) | | | 2/28/2023 | | | — | | | — | | | — | | | 9,206 | | | 18,411 | | | 27,617 | | | — | | | — | | | — | | | 554,171 | ||
Chris Rogers | | | — | | | — | | | 362,500 | | | 725,000 | | | 1,087,500 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| 1/4/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 46,363 | | | 29.27 | | | 869,992 | ||
| 2/28/2023(d) | | | 4/12/2021 | | | — | | | — | | | — | | | 1,105 | | | 2,209 | | | 3,314 | | | — | | | — | | | — | | | 66,491 | ||
| 2/28/2023(e) | | | 2/15/2022 | | | — | | | — | | | — | | | 2,824 | | | 5,648 | | | 8,472 | | | — | | | — | | | — | | | 170,005 | ||
| 2/28/2023(f) | | | 2/28/2023 | | | — | | | — | | | — | | | 4,817 | | | 9,634 | | | 14,451 | | | — | | | — | | | — | | | 289,983 |
(a) | The grant date shown in the table was determined pursuant to ASC 718, which is the date our Compensation Committee (or our Board for the CEO) established the performance criteria for the first one-third of the 2023 Performance Awards, the second one-third of the 2022 Performance Awards and the final one-third of the 2021 Performance Awards. The award date shown above represents the date on which our Compensation Committee (or our Board for the CEO) awarded the target number of Performance Awards to the named executive officers when the date differs from the grant date. |
(b) | Option awards represent stock options granted to the executives as part of their annual equity incentive compensation. The option awards vest over four years, 25% on the first anniversary of the date of grant and 25% on each succeeding anniversary. |
(c) | Represents the full grant date fair value of awards under ASC 718. Generally, the full grant date fair value is the amount the Company expenses in its financial statements over the award’s vesting period. Assumptions used in the calculation of the amounts for stock option awards and performance awards are included in Notes 2 and 16 to the Company’s audited financial statements in our 2023 Annual Report. |
(d) | Equity incentive awards represent performance-based restricted stock awards approved on April 12, 2021 in connection with the Company’s 2021 Performance Awards. The aggregate target number of restricted stock having a three-year award period consisting of three one-year performance periods and a three-year service period were: (i) 38,897 for Mr. Snowden; (ii) 7,491 for Ms. Hendrix; (iii) 8,356 for Mr. George; and (iv) 6,627 for Mr. Rogers. |
(e) | Equity incentive awards represent performance-based restricted stock units approved on March 9, 2022 for Mr. Snowden and February 15, 2022 for the other named executive officers in connection with the Company’s 2022 performance-based equity program. The aggregate target number of restricted stock units having a three-year award period consisting of three one-year performance periods and a three-year service period were: (i) 115,329 for Mr. Snowden; (ii) 17,946 for Ms. Hendrix; (iii) 20,090 for Mr. George; and (iv) 16,943 for Mr. Rogers. |
(f) | Equity incentive awards represent performance-based restricted stock units approved on March 8, 2023 for Mr. Snowden and February 28, 2023 for the other named executive officers in connection with the Company’s 2023 performance-based equity program. The aggregate target number of restricted stock units having a three-year award period consisting of three one-year performance periods and a three-year service period were: (i) 186,557 for Mr. Snowden; (ii) 49,419 for Ms. Hendrix; (iii) 55,233 for Mr. George; and (iv) 28,904 for Mr. Rogers. |
| | PROXY STATEMENT - 2024 71 |
COMPENSATION TABLES AND ARRANGEMENTS |
NAME | | | OPTION AWARDS | | | STOCK AWARDS | ||||||||||||||||||
| NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS: | | | OPTION EXERCISE PRICE ($) | | | OPTION EXPIRATION DATE | | | NUMBER OF SHARES OR UNITS HELD THAT HAVE NOT VESTED (#) | | | MARKET VALUE OF SHARES OR UNITS HELD THAT HAVE NOT VESTED ($) (k) | | | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) | | | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) | |||||
| EXERCISABLE (#) | | | UNEXERCISABLE (#) | | |||||||||||||||||||
Jay Snowden | | | 105,769 | | | — | | | 30.74 | | | 1/3/2025 | | | 51,863(h) | | | 1,349,475 | | | — | | | — |
| 156,203 | | | — | | | 19.45 | | | 1/3/2029 | | | 96,108(i) | | | 2,500,730 | | | 38,443(l) | | | 1,000,287 | ||
| 1,032,706 | | | — | | | 18.81 | | | 8/6/2029 | | | 93,278 (j) | | | 2,427,094 | | | 124,372(l) | | | 3,236,159 | ||
| 44,820 | | | 44,819(b) | | | 80.89 | | | 1/5/2031 | | | — | | | — | | | 300,000(m) | | | 7,806,000 | ||
| 39,852 | | | 119,556(d) | | | 50.64 | | | 1/4/2032 | | | — | | | — | | | 600,000(n) | | | 15,612,000 | ||
| — | | | 296,566(e) | | | 29.27 | | | 1/4/2033 | | | — | | | — | | | — | | | — | ||
Felicia Hendrix | | | 5,849 | | | 5,848(c) | | | 117.82 | | | 2/23/2031 | | | 9,989(h) | | | 259,914 | | | — | | | — |
| 7,101 | | | 21,304(d) | | | 50.64 | | | 1/4/2032 | | | 14,955(i) | | | 389,129 | | | 5,982(l) | | | 155,652 | ||
| — | | | 79,271(e) | | | 29.27 | | | 1/4/2033 | | | 24,710(j) | | | 642,954 | | | 32,946(l) | | | 857,255 | ||
Todd George | | | 5,375 | | | —(f) | | | 14.10 | | | 1/4/2024 | | | 11,142(h) | | | 289,915 | | | — | | | — |
| 13,360 | | | — | | | 30.74 | | | 1/3/2025 | | | 16,743(i) | | | 435,653 | | | 6,696(l) | | | 174,230 | ||
| 25,404 | | | — | | | 19.45 | | | 1/3/2029 | | | 27,617(j) | | | 718,594 | | | 36,822(l) | | | 958,108 | ||
| 45,796 | | | 15,265(a) | | | 26.14 | | | 1/3/2030 | | | — | | | — | | | — | | | — | ||
| 9,628 | | | 9,628(b) | | | 80.89 | | | 1/5/2031 | | | — | | | — | | | — | | | — | ||
| 7,949 | | | 23,849(d) | | | 50.64 | | | 1/4/2032 | | | — | | | — | | | — | | | — | ||
| — | | | 88,597(e) | | | 29.27 | | | 1/4/2033 | | | — | | | — | | | — | | | — | ||
Chris Rogers | | | 7,074 | | | — | | | 14.10 | | | 1/4/2024 | | | 8,837(h) | | | 229,939 | | | — | | | — |
| 3,584 | | | — | | | 30.74 | | | 1/3/2025 | | | 14,120(i) | | | 367,402 | | | 5,647(l) | | | 146,935 | ||
| 24,290 | | | — | | | 19.45 | | | 1/3/2029 | | | 14,451(j) | | | 376,015 | | | 19,270(l) | | | 501,405 | ||
| 17,614 | | | 5,871(a) | | | 26.14 | | | 1/3/2030 | | | — | | | — | | | — | | | — | ||
| 7,636 | | | 7,636(b) | | | 80.89 | | | 1/5/2031 | | | — | | | — | | | — | | | — | ||
| 6,704 | | | 20,114(d) | | | 50.64 | | | 1/4/2032 | | | — | | | — | | | — | | | — | ||
| — | | | 46,363(e) | | | 29.27 | | | 1/4/2033 | | | — | | | — | | | — | | | — |
(a) | The vesting date is January 3, 2024. |
(b) | The vesting dates are January 5, 2024 and January 5, 2025. |
(c) | The vesting dates are February 23, 2024 and February 23, 2025. |
(d) | The vesting dates are January 4, 2024, January 5, 2025, and January 4, 2026. |
(e) | The vesting dates are January 4, 2024, January 4, 2025, January 4, 2026 and January 4, 2027. |
(f) | The option award consists of a Cash Settled Stock Appreciation Award. |
(g) | The stock awards consist of performance awards, which were made under the performance-based equity program adopted under the 2018 and 2022 Long Term Incentive Compensation Plans. |
(h) | The vesting date shall be in the first quarter of 2024 following the certification of performance by the Compensation Committee or the Board of Directors, as applicable. Per instructions to Item 402(f)(2), since performance goals exceed the threshold, the disclosure reports the next higher performance measure. |
(i) | The vesting date shall be in the first quarter of 2025 following the certification of performance by the Compensation Committee or the Board of Directors, as applicable. Per instructions to Item 402(f)(2), since performance goals exceed the threshold, the disclosure reports the next higher performance measure. |
(j) | The vesting date shall be in the first quarter of 2026 following the certification of performance by the Compensation Committee or the Board of Directors, as applicable. Per instructions to Item 402(f)(2), since performance goals exceed the threshold, the disclosure reports the next higher performance measure. |
(k) | Calculated based on the closing price of $26.02 for the Company’s common stock on December 29, 2023, which was the last trading day of the Company’s 2023 fiscal year. |
(l) | These amounts represent the target number of performance-based restricted stock and restricted stock units for the performance periods ending December 31, 2024, December 31, 2025 and December 31, 2026. The final number of shares or units earned, if any, will be based on the performance achieved for such periods. |
(m) | These awards make up the Stock Price Hurdle Award. A discussion of the Stock Price Hurdle Award may be found in our CD&A under “CEO Performance Based Supplemental Equity Awards.” |
(n) | These awards make up the Relative TSR Hurdle Award. A discussion of the Relative TSR Hurdle Award may be found in our CD&A under “CEO Performance Based Supplemental Equity Awards.” |
72 PROXY STATEMENT - 2024 | | |
COMPENSATION TABLES AND ARRANGEMENTS |
| | OPTION AWARDS | | | STOCK AWARDS | |||||||
NAME | | | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | | | VALUE REALIZED ON EXERCISE ($) | | | NUMBER OF SHARES ACQUIRED ON VESTING (#) (a) | | | 2023 VALUE REALIZED ON VESTING ($) (b) |
Jay Snowden | | | 219,222 | | | 2,445,285 | | | — | | | — |
Felica Hendrix | | | — | | | — | | | 1,061 | | | 33,655 |
Todd George | | | — | | | — | | | 49,965 | | | 1,422,329 |
Chris Rogers | | | — | | | — | | | 13,121 | | | 354,137 |
(a) | The number of shares acquired on vesting includes 30,690 restricted stock units, which were settled in cash, for Mr. George; and 5,707 restricted stock units, which were settled in cash, for Mr. Rogers. |
(b) | Value realized represents fair value, per share, as of the trading day immediately prior to the vesting date. |
NAME | | | EXECUTIVE CONTRIBUTIONS IN LAST FISCAL YEAR ($) (a) | | | COMPANY CONTRIBUTIONS IN LAST FISCAL YEAR ($) (b) | | | AGGREGATE EARNINGS IN LAST FISCAL YEAR ($) (c) | | | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($) | | | AGGREGATE BALANCE AT LAST FISCAL YEAR END ($) (d) |
Jay Snowden | | | 649,634 | | | 324,817 | | | 875,812 | | | 7,861 | | | 6,066,251 |
Felicia Hendrix | | | 159,100 | | | 79,550 | | | 113,895 | | | 1,596 | | | 643,712 |
Todd George | | | 561,579 | | | 93,596 | | | 671,328 | | | 2,256 | | | 4,307,780 |
Chris Rogers | | | 169,310 | | | 71,379 | | | 193,110 | | | 1,718 | | | 1,338,450 |
(a) | For each executive, the executive’s contribution is included in the executive’s Salary column for 2023, as reported in the Summary Compensation Table. |
(b) | For each executive, the Company’s contribution is included in the executive’s All Other Compensation column for 2023, as reported in the Summary Compensation Table. |
(c) | Amounts reflect the change in account value during fiscal year 2023. No amounts are reported in the Summary Compensation Table because the earnings were not above market or preferential. |
(d) | The amount of each executive’s aggregate balance at fiscal year-end that was reported as compensation in the Summary Compensation Table for previous years is as follows: |
| | PROXY STATEMENT - 2024 73 |
COMPENSATION TABLES AND ARRANGEMENTS |
74 PROXY STATEMENT - 2024 | | |
COMPENSATION TABLES AND ARRANGEMENTS |
EXECUTIVE PAYMENTS | | | VOLUNTARY TERMINATION BY EXECUTIVE ($) | | | TERMINATION WITHOUT CAUSE BY COMPANY ($) | | | TERMINATION FOR CAUSE BY COMPANY ($) | | | TERMINATION UPON DEATH ($) | | | TERMINATION UPON DISABILITY ($) | | | CHANGE IN CONTROL ($) | | | CHANGE IN CONTROL TERMINATION WITHOUT CAUSE ($) |
Cash Severance Benefit (a) | | | — | | | 12,600,000 | | | — | | | — | | | — | | | — | | | 15,750,000 |
Benefit Continuation (b) | | | — | | | 47,591 | | | — | | | — | | | — | | | — | | | 47,591 |
Restricted Shares (c)(d) | | | — | | | 5,032,399 | | | — | | | 9,268,793 | | | 9,268,793 | | | — | | | 9,268,793 |
Vested Stock Options (e) | | | 8,472,064 | | | 8,472,064 | | | — | | | 8,472,064 | | | 8,472,064 | | | 8,472,064 | | | 8,472,064 |
Vested Deferred Compensation Balance (f) | | | 6,066,251 | | | 6,066,251 | | | 6,066,251 | | | 6,066,251 | | | 6,066,251 | | | 6,066,251 | | | 6,066,251 |
Total | | | $14,538,315 | | | $32,218,305 | | | $6,066,251 | | | $23,807,108 | | | $23,807,108 | | | $14,538,315 | | | $39,604,699 |
(a) | In the case of termination without cause by Company, the amount represents a payment equal to two times the sum of (a) annual base salary for 2023 and (b) target cash bonus for 2023. For change in control termination without cause, the amount represents a payment equal to two and a half times the sum of (a) annual base salary for 2023 and (b) target cash bonus for 2023. |
(b) | Represents employer cost of medical, dental, and vision coverage for a period of twenty-four months should Mr. Snowden elect COBRA coverage for these benefits based on his benefit elections in place on December 31, 2023. |
(c) | Restricted stock award values were computed based on the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. |
(d) | Restrictions on unvested awards lapse upon death, disability or a change in control termination without cause. |
(e) | Amounts represent the difference between the exercise price of Mr. Snowden’s options and the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. Vested stock options issued under the 2008 Plan, 2018 Plan and 2022 Plan are cancelled when an executive is terminated for cause by the Company. |
(f) | Company contributions to the Deferred Compensation Plan vest 20% per year during the first five years of service. However, vesting is accelerated upon death, retirement, change in control or, at the option of the committee administering the Deferred Compensation Plan, involuntary termination. |
EXECUTIVE PAYMENTS | | | VOLUNTARY TERMINATION BY EXECUTIVE ($) | | | TERMINATION WITHOUT CAUSE BY COMPANY ($) | | | TERMINATION FOR CAUSE BY COMPANY ($) | | | TERMINATION UPON DEATH ($) | | | TERMINATION UPON DISABILITY ($) | | | CHANGE IN CONTROL ($) | | | CHANGE IN CONTROL TERMINATION WITHOUT CAUSE ($) |
Cash Severance Benefit (a) | | | — | | | 2,975,000 | | | — | | | — | | | — | | | — | | | 3,400,000 |
Restricted Shares (b)(c) | | | — | | | 1,018,813 | | | — | | | 2,031,720 | | | 2,031,720 | | | — | | | 2,031,720 |
Vested Deferred Compensation Balance (d) | | | 558,629 | | | 558,629 | | | 558,629 | | | 643,712 | | | 558,629 | | | 643,712 | | | 643,712 |
Total | | | $558,629 | | | $4,552,442 | | | $558,629 | | | $2,675,432 | | | $2,590,349 | | | $643,712 | | | $6,075,432 |
(a) | In the case of termination without cause by the Company, the amount represents a payment equal to the sum of (a) twenty four months of annual base salary for 2023 and (b) one and a half times the target cash bonus for 2023. For change in control termination without cause, the amount represents a payment equal to two times the sum of (a) annual base salary for 2023 and (b) target cash bonus for 2023. Represents employer cost of medical, dental and vision coverage for a period of twenty four months should the Ms. Hendrix elect COBRA coverage for these benefits based on her benefit elections in place on December 31, 2023. |
(b) | Restricted stock award values were computed based on the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. |
(c) | Restrictions on unvested awards lapse upon death, disability or a change in control termination without cause. |
(d) | Company contributions to the Deferred Compensation Plan vest 20% per year during the first five years of service. However, vesting is accelerated upon death, retirement, change in control or, at the option of the committee administering the Deferred Compensation Plan, involuntary termination. |
| | PROXY STATEMENT - 2024 75 |
COMPENSATION TABLES AND ARRANGEMENTS |
EXECUTIVE PAYMENTS | | | VOLUNTARY TERMINATION BY EXECUTIVE ($) | | | TERMINATION WITHOUT CAUSE BY COMPANY ($) | | | TERMINATION FOR CAUSE BY COMPANY ($) | | | TERMINATION UPON DEATH ($) | | | TERMINATION UPON DISABILITY ($) | | | CHANGE IN CONTROL ($) | | | CHANGE IN CONTROL TERMINATION WITHOUT CAUSE ($) |
Cash Severance Benefit (a) | | | — | | | 3,325,000 | | | — | | | — | | | — | | | — | | | 3,800,000 |
Benefit Continuation (b) | | | — | | | 50,309 | | | — | | | — | | | — | | | — | | | 50,309 |
Restricted Shares (c)(d) | | | — | | | 1,138,713 | | | — | | | 2,271,051 | | | 2,271,051 | | | — | | | 2,271,051 |
Vested Stock Options (e) | | | 230,974 | | | 230,974 | | | — | | | 230,974 | | | 230,974 | | | 230,974 | | | 230,974 |
Vested Deferred Compensation Balance (f) | | | 4,307,780 | | | 4,307,780 | | | 4,307,780 | | | 4,307,780 | | | 4,307,780 | | | 4,307,780 | | | 4,307,780 |
Total | | | $4,538,754 | | | $9,052,776 | | | $4,307,780 | | | $6,809,805 | | | $6,809,805 | | | $4,538,754 | | | $10,660,114 |
(a) | In the case of termination without cause by the Company, the amount represents a payment equal to the sum of (a) two times annual base salary for 2023 and (b) one and one half times the target cash bonus for 2023. For change in control termination without cause, the amount represents a payment equal to two times the sum of (a) annual base salary for 2023 and (b) target cash bonus for 2023. |
(b) | Represents employer cost of medical, dental and vision coverage for a period of twenty four months should Mr. George elect COBRA coverage for these benefits based on his benefit elections in place on December 31, 2023. |
(c) | Restricted stock award values were computed based on the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. |
(d) | Restrictions on unvested awards lapse upon death, disability or a change in control termination without cause. |
(e) | Amounts represent the difference between the exercise price of Mr. George’s options and the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. Vested stock options issued under the 2008 Plan, 2018 Plan and 2022 Plan are cancelled when an executive is terminated for cause by the Company. |
(f) | Company contributions to the Deferred Compensation Plan vest 20% per year during the first five years of service. However, vesting is accelerated upon death, retirement, change in control or, at the option of the committee administering the Deferred Compensation Plan, involuntary termination. |
EXECUTIVE PAYMENTS | | | VOLUNTARY TERMINATION BY EXECUTIVE ($) | | | TERMINATION WITHOUT CAUSE BY COMPANY ($) | | | TERMINATION FOR CAUSE BY COMPANY ($) | | | TERMINATION UPON DEATH ($) | | | TERMINATION UPON DISABILITY ($) | | | CHANGE IN CONTROL ($) | | | CHANGE IN CONTROL TERMINATION WITHOUT CAUSE ($) |
Cash Severance Benefit (a) | | | — | | | 2,143,316 | | | — | | | — | | | — | | | — | | | 2,900,000 |
Benefit Continuation (b) | | | — | | | 33,380 | | | — | | | — | | | — | | | — | | | 33,380 |
Restricted Shares (c)(d) | | | — | | | 781,719 | | | — | | | 1,430,007 | | | 1,430,007 | | | — | | | 1,430,007 |
Vested Stock Options (e) | | | 243,907 | | | 243,907 | | | — | | | 243,907 | | | 243,907 | | | 243,907 | | | 243,907 |
Vested Deferred Compensation Balance (f) | | | 1,338,450 | | | 1,338,450 | | | 1,338,450 | | | 1,338,450 | | | 1,338,450 | | | 1,338,450 | | | 1,338,450 |
Total | | | $1,582,357 | | | $4,540,772 | | | $1,338,450 | | | $3,012,364 | | | $3,012,364 | | | $1,582,357 | | | $5,945,744 |
(a) | In the case of termination without cause by the Company, the amount represents a payment equal to the sum of (a) eighteen months of annual base salary for 2023 and (b) one and a half times the average of the last two full year’s bonuses paid. For change in control termination without cause, the amount represents a payment equal to two times the sum of (a) annual base salary for 2023 and (b) target cash bonus for 2023. |
(b) | Represents employer cost of medical, dental and vision coverage for a period of eighteen months should Mr. Rogers elect COBRA coverage for these benefits based on his benefit elections in place on December 31, 2023. |
(c) | Restricted stock award values were computed based on the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. |
(d) | Restrictions on unvested awards lapse upon death, disability or a change in control termination without cause. |
(e) | Amounts represent the difference between the exercise price Mr. Rogers’ options and the closing price of the Company’s common stock on December 29, 2023 ($26.02 per share), which was the last trading day of 2023. Vested stock options issued under the 2008 Plan, 2018 Plan and 2022 Plan are cancelled when an executive is terminated for cause by the Company. |
(f) | Company contributions to the Deferred Compensation Plan vest 20% per year during the first five years of service. However, vesting is accelerated upon death, retirement, change in control or, at the option of the committee administering the Deferred Compensation Plan, involuntary termination. |
76 PROXY STATEMENT - 2024 | | |
COMPENSATION TABLES AND ARRANGEMENTS |
| | PROXY STATEMENT - 2024 77 |
COMPENSATION TABLES AND ARRANGEMENTS |
78 PROXY STATEMENT - 2024 | | |
COMPENSATION TABLES AND ARRANGEMENTS |
| | PROXY STATEMENT - 2024 79 |
COMPENSATION TABLES AND ARRANGEMENTS |
PLAN CATEGORY | | | (A) | | | (B) | | | (C) |
| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | | | WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS ($) | | | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (A)) | ||
Equity compensation plans approved by shareholders | | | 3,475,403 | | | $30.18 | | | 11,008,469(1)(2) |
Equity compensation plans not approved by shareholders (3) | | | 234,781 | | | $14.40 | | | 251,825 |
(1) | Includes 954,135 shares issuable at maximum in connection with performance-based restricted stock awards granted under performance-based equity plans adopted under the 2022 Plan; 600,000 stock settled restricted stock units and 300,000 restricted stock awards with market-based and service-based vesting conditions solely to the Company’s Chief Executive Officer and 236,212 stock settled restricted units with performance-based vesting conditions that are dependent on the achievement of certain milestones. The weighted-average exercise price in column (b) does not take these awards into account. |
(2) | The 2022 Plan provides that, while awards of stock options, stock appreciation rights, and awards of restricted stock, or shares issued pursuant to any other full value awards are counted as one share of common stock granted under such plan, for purposes of determining the number of shares available for issuance under such plan. Awards that are settled in cash rather than shares of stock are not counted against the limit in the 2022 Plan. |
(3) | In connection with our October 19, 2021 acquisition of theScore, we assumed the Score Media and Gaming Inc. Second Amended and Restated Stock Option and Restricted Stock Unit Plan (the “Score Media Plan”). Upon the assumption of the Score Media Plan, the remaining share reserve thereunder was converted into a share reserve relating to shares of Company common stock based on the equity award exchange ratio applicable to outstanding equity awards of theScore. The Score Media Plan was approved by the Score Media and Gaming Inc. security holders prior to the acquisition but has not been approved by our shareholders. The Score Media Plan permits grants of stock options and restricted share units to directors, officers, employees of theScore at the time of the acquisition (“eligible persons”) (or wholly-owned corporations of such eligible persons). No future awards will be granted under the Score Media Plan. |
80 PROXY STATEMENT - 2024 | | |
PAY VERSUS PERFORMANCE |
| | | | | | | | | | VALUE OF INTIAL $100 INVESTMENT BASED ON: | | | | | ||||||||||
FISCAL YEAR | | | SUMMARY COMPENSATION TABLE TOTAL FOR PEO 1 | | | COMPENSATION ACTUALLY PAID TO PEO2 | | | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOS3 | | | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOS4 | | | TOTAL SHAREHOLDER RETURN5 | | | PEER GROUP TOTAL SHAREHOLDER RETURN6 | | | NET INCOME ($M)7 | | | ADJUSTED EBITDAR ($M)8 |
2023 | | | $15,542,305 | | | $10,187,197 | | | $3,800,856 | | | $3,866,865 | | | $101.80 | | | $104.27 | | | ($491.4) | | | $1,512.6 |
2022 | | | $14,075,614 | | | ($10,073,072) | | | $3,105,185 | | | $1,412,413 | | | $116.20 | | | $82.85 | | | $221.7 | | | $1,939.4 |
2021 | | | $65,887,214 | | | $7,961,396 | | | $3,440,477 | | | $2,027,447 | | | $202.86 | | | $110.71 | | | $420.5 | | | $1,994.4 |
2020 | | | $3,898,655 | | | $75,499,569 | | | $3,232,591 | | | $13,492,467 | | | $337.91 | | | $112.34 | | | ($669.1) | | | $1,094.8 |
1 | The dollar amounts reported are the amounts of total compensation reported for Mr. Snowden (our Principal Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Compensation Tables and Arrangements—2023 Summary Compensation Table.” |
2 | The dollar amounts reported represent the amount of “compensation actually paid” to Mr. Snowden, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Snowden during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following “Compensation Actually Paid Calculation” table displays the adjustments made to Mr. Snowden’s total compensation for each year to determine the compensation actually paid. |
3 | The dollar amounts reported represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Snowden) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Snowden) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022 and 2023, Felicia Hendrix, Todd George and Chris Rogers; (ii) for 2021, Felicia Hendrix, Todd George and Harper Ko; and (iii) for 2020, David Williams, William J. Fair and Carl Sottosanti. |
4 | The dollar amounts reported represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Snowden), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Snowden) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following “Compensation Actually Paid Calculation” table displays the adjustments made to average total compensation for the NEOs as a group (excluding Mr. Snowden) for each year to determine the average compensation actually paid to the NEOs as a group (excluding Mr. Snowden). |
5 | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
6 | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: Russell 3000 Casino and Gambling Index. |
7 | The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. |
8 | The Company believes Adjusted EBITDAR is the financial performance measure most closely linked to the calculation of compensation actually paid. Adjusted EBITDAR is a non-GAAP financial measure. For a definition and reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure, see the section entitled “Non-GAAP Financial Measures” on pages 43 - 45 of our 2023 Annual Report. |
| | PROXY STATEMENT - 2024 81 |
PAY VERSUS PERFORMANCE |
| | |||||||||||||||||||||||
| | PEO | | | NEO AVERAGE | |||||||||||||||||||
| | 2023 | | | 2022 | | | 2021 | | | 2020 | | | 2023 | | | 2022 | | | 2021 | | | 2020 | |
Summary Compensation Table Total | | | $15,542,305 | | | $14,075,614 | | | $65,887,214 | | | $3,898,655 | | | $3,800,856 | | | $3,105,185 | | | $3,440,477 | | | $3,232,591 |
Less: Reported Fair Value of Equity Awards(a) | | | $8,953,479 | | | $6,961,325 | | | $57,104,584 | | | $2,431,391 | | | $2,045,705 | | | $1,470,912 | | | $1,645,208 | | | $1,699,259 |
Add: Year End Fair Value of Equity Awards(b) | | | $9,604,572 | | | $5,919,253 | | | $22,335,085 | | | $3,668,075 | | | $2,302,218 | | | $1,016,402 | | | $1,231,271 | | | $5,549,713 |
Add: Change in Fair Value of Outstanding and Unvested Equity Awards(b) | | | ($4,077,352) | | | ($18,419,902) | | | ($20,839,582) | | | $64,271,366 | | | ($271,763) | | | ($ 1,066,153) | | | ($1,020,003) | | | $6,437,966 |
Add: Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year(b) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Add: Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year(b) | | | ($1,928,849) | | | ($4,686,713) | | | ($ 2,316,737) | | | $6,092,864 | | | $81,259 | | | ($ 172,109) | | | $20,909 | | | ($28,544) |
Less: Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year(b) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Add: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation(b) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Compensation Actually Paid(c) | | | $10,187,197 | | | ($10,073,072) | | | $7,961,396 | | | $75,499,569 | | | $3,866,865 | | | $1,412,413 | | | $2,027,447 | | | $13,492,467 |
(a) | The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
(b) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; and (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
(c) | The Company does not maintain any defined benefit pension programs for its executives. |
82 PROXY STATEMENT - 2024 | | |
PAY VERSUS PERFORMANCE |
| | PROXY STATEMENT - 2024 83 |
PAY VERSUS PERFORMANCE |
84 PROXY STATEMENT - 2024 | | |
PAY VERSUS PERFORMANCE |
| | PROXY STATEMENT - 2024 85 |
PAY VERSUS PERFORMANCE |
86 PROXY STATEMENT - 2024 | | |
PAY VERSUS PERFORMANCE |
| | PROXY STATEMENT - 2024 87 |
88 PROXY STATEMENT - 2024 | | |
PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF NAMED EXECUTIVE OFFICERS |
Board Recommendation | | | | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADVISORY APPROVAL OF THE NAMED EXECUTIVE OFFICER COMPENSATION. |
| | PROXY STATEMENT - 2024 89 |
AUDIT COMMITTEE REPORT |
| | | | |||
Jane Scaccetti Chair | | | Barbara Shattuck Kohn Member | | | Saul Reibstein Member |
90 PROXY STATEMENT - 2024 | | |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
FEES | | | FISCAL 2023 | | | FISCAL 2022 |
Audit Fees (1) | | | $7,339,971 | | | $7,059,221 |
Audit-Related Fees (2) | | | — | | | — |
Tax Fees (3) | | | $20,000 | | | $20,000 |
Other Fees (4) | | | $18,290 | | | $18,290 |
Total Fees | | | $7,378,261 | | | $7,097,511 |
(1) | Audit fees include fees associated with the annual audit, reviews of the Company’s quarterly reports on Form 10-Q, annual audits required by law for certain jurisdictions, and other audit and attestation services related to statutory or regulatory filings. Audit fees also include the audit of the Company’s internal controls over financial reporting, as required by Section 404 of the Sarbanes Oxley Act of 2002. Audit fees included additional fees associated with registration statement on Forms S-3 and S-8, comfort letters and consents. |
(2) | There were no audit-related fees in 2023 or 2022. |
(3) | Tax fees for 2023 and 2022 included advisory services. |
(4) | Other fees for 2023 and 2022 included fees to the Canadian Public Accountability Board. |
| | PROXY STATEMENT - 2024 91 |
OTHER MATTERS |
92 PROXY STATEMENT - 2024 | | |
OTHER MATTERS |
| | PROXY STATEMENT - 2024 93 |
OTHER MATTERS |
94 PROXY STATEMENT - 2024 | | |
ABOUT THE MEETING: QUESTIONS AND ANSWERS |
PROPOSAL | | | BOARD VOTE RECOMMENDATION | | | PAGE REFERENCE | |||
Proposal 1: Election of Class I Directors | | | | | FOR each Nominee | | | ||
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm | | | | | FOR | | | ||
Proposal 3: Advisory Vote to Approve the Compensation of Named Executive Officers | | | | | FOR | | |
PROPOSAL | | | VOTE REQUIRED | | | BROKER DISCRETIONARY ALLOWED? |
Election of Class I Directors | | | Plurality of Votes Cast | | | No |
Ratification of PwC | | | Majority of Votes Cast | | | Yes |
Advisory Vote on Executive Compensation | | | Majority of Votes Cast | | | No |
| | PROXY STATEMENT - 2024 95 |
ABOUT THE MEETING: QUESTIONS AND ANSWERS |
• | Attending the Annual Meeting: To attend the Annual Meeting, visit www.virtualshareholdermeeting.com/PENN2024. You will be asked to enter the 16-digit control number found on the proxy card or the voting instruction form that accompanied your proxy materials. |
• | Voting During the Annual Meeting: If you are a shareholder as of the Record Date, you may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. |
• | Technical Support for the Annual Meeting: If you have difficulty accessing the virtual Annual Meeting, Technicians will be available to assist you via the toll-free phone number listed at www.virtualshareholdermeeting.com/PENN2024. |
• | Vote by Internet. To vote on the Internet, you must go to www.proxyvote.com, have your Notice of Availability, Proxy Card or voting instruction form in hand and follow the instructions. If you vote via the Internet, you do not need to return your Proxy Card. |
• | Vote by Phone. To vote by telephone, you must call the toll-free number listed on your Notice of Availability and/or Proxy Card, have your Notice of Availability, Proxy Card or voting instruction form in hand and follow the instructions. If you vote by telephone, you do not need to return your Proxy Card. |
• | Vote by Mail. To vote by mail, if you have not already received one, you may request a Proxy Card from us as instructed in the Notice of Availability and sign, date and mail the Proxy Card in the postage-paid envelope provided. Properly signed and returned proxies will be voted in accordance with the instructions contained therein. |
96 PROXY STATEMENT - 2024 | | |
ABOUT THE MEETING: QUESTIONS AND ANSWERS |
• | notifying our Secretary in writing that you would like to revoke your proxy; or |
• | attending our Annual Meeting (virtually) and following the instructions available on the meeting website during the meeting. |
| | PROXY STATEMENT - 2024 97 |
ABOUT THE MEETING: QUESTIONS AND ANSWERS |
| | PROXY STATEMENT - 2024 A-1 |
APPENDIX |
(DOLLARS IN MILLIONS) | | | FOR THE YEAR ENDED DECEMBER 31, 2023 |
Net loss | | | (491.4) |
Income tax benefit | | | (8.2) |
Interest expense, net | | | 464.7 |
Interest income | | | (40.3) |
Income from unconsolidated affiliates | | | (25.3) |
Gain on Barstool Acquisition, net | | | (83.4) |
Gain on REIT transactions, net | | | (500.8) |
Other income | | | (5.5) |
Operating loss | | | (690.2) |
Loss on disposal of Barstool | | | 923.2 |
Stock-based compensation | | | 85.9 |
Cash-settled stock-based award variance | | | (13.8) |
Loss on disposal of assets | | | 0.1 |
Contingent purchase price | | | 1.9 |
Depreciation and amortization | | | 435.1 |
Impairment losses | | | 130.6 |
Insurance, recoveries, net of deductible charges | | | (13.9) |
Income from unconsolidated affiliates | | | 25.3 |
Non-operating items of equity, method investments | | | 7.4 |
Other expenses | | | 29.9 |
Adjusted EBITDA (1) | | | 921.5 |
Rent expense associated with triple net operating leases | | | 591.1 |
Adjusted EBITDAR (2) | | | 1,512.6 |
Adjustments Approved for 2023 Bonus Program (STIP) (3) | | | 384.0 |
Adjusted EBITDAR Used in 2023 Bonus Program (STIP) (3) | | | 1,896.6 |
(1) | We define Adjusted EBITDA as earnings before interest expense, net; interest income; income taxes; depreciation and amortization; stock-based compensation; debt extinguishment charges; impairment losses; insurance recoveries, net of deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening expenses; loss on disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations;” and other. Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net; income taxes; depreciation and amortization; and stock-based compensation expense) added back for Barstool (prior to our acquisition of Barstool on February 17, 2023) and our Kansas Entertainment, LLC joint venture. Adjusted EBITDA is inclusive of rent expense associated with our triple net operating leases with our REIT landlords. |
(2) | We define Adjusted EBITDAR as Adjusted EBITDA (as defined above) plus rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business). |
(3) | Adjustments to the target and achieved performance results for the 2023 STIP calculation of Adjusted EBITDAR only include Interactive segment results for January 1 to June 30, 2023, the period prior to the Company’s decision to enter into a strategic alliance with ESPN, and to exclude Interactive segment results for the period following the Company’s decision to launch ESPN BET. |