Exodus Of Penn National Top Brass Continues With CFO’s Departure

Posted on September 30, 2019

There’s churn at the top of Penn National Gaming, the parent company of Hollywood Casino.

The parent company, with 42 facilities in 19 jurisdictions, is considered one of the largest regional gaming operator in North America. PNG is based in Pennsylvania and operates both Hollywood and The Meadows Casino within the state. Penn is actively developing two mini-casinos in Pennsylvania and operates a sportsbook and an online casino in the state.

Timothy Wilmott, William Fair leaving PNG

One departure is a planned retirement. Another was a reaction to an antitrust law change. However, the third appeared to have caught the company and financial market off-guard a bit.

Timothy Wilmott, 60, Penn’s current CEO, who had joined the company in 2008 and moved up to lead it in 2013, announced in early August he plans to retire. Wilmott has spoken of retiring for at least a year. He helped oversee Penn’s acquisition of Pinnacle Entertainment, a deal that closed in the fall of 2018.

He is also currently chairman of the American Gaming Association, an industry lobbying group. Wilmott, who attended Lehigh University and the Wharton School at Penn, had total compensation of $8,878,353 in 2018, much of it stock-related.

In a planned succession, current Penn COO Jay Snowden, 41, will replace Wilmott on Jan. 1. Wilmott had groomed Snowden for the slot, according to a former Penn executive.

The announcement that Penn’s CFO William “BJ” Fair, 65, is leaving on March 31 due to personal reasons seems to have caught PNG off guard though. Fair holds a Wharton degree and is a former executive in the skiing industry. Underscoring the surprise nature of this departure, a search is currently underway for his successor.

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Chairman Peter Carlino takes on an emeritus role

In an unintended consequence of the $2.8 billion Pinnacle acquisition, Peter Carlino, 71, had to step away from his role on June 12 as chairman of Penn National. He remains as chairman emeritus of Penn, though he cannot vote.

For now, David Handler, 53, on the board since 1994, will fill in as chairman. Handler is a partner in a financial advisory and private equity firm, Centerview Partners.

The board shuffled members around to comply with the Clayton Antitrust Act. The law makes Carlino ineligible to serve as a director to both Penn National and Gaming and Leisure Properties Inc. (GLPI). That’s a real estate investment trust company that Penn National spun off 2013.

Carlino remains CEO of GLPI while he is a non-voting member of the Penn board.

Real estate is an apparent issue

Antitrust rules changed after the Pinnacle purchase. That caused a problem due to an over-concentration of assets, specifically in Baton Rouge, LA, where both Pinnacle and GLPI held interests.

The June announcement that Caesars and Eldorado are merging and the possibility of more antitrust issues arising due to over-concentration in some markets has not helped stock prices in the casino sector.

Penn’s stock has had some issues in the past year. Penn hit $34.72 within the year, but the company’s close last week was $18.25. The price appeared to be heading up on Monday.

The stock had closed even lower the week before after Fair’s announcement.

Investors are waiting to see how the ultimate ownership of properties shake out, explained a gaming executive familiar with Wilmott through AGA.

Carlino could return as the chairman of Penn, but only after changes are made in the ownership of the Louisiana properties owned by Penn and Pinnacle, believes a former Penn executive.

More departures or retirements are likely before Wilmott’s tenure ends, the former Penn executive believes. That could allow Snowden to promote or add personnel who are personally loyal to him.

Kevin Shelly Avatar
Written by
Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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