PENN Entertainment faces a revolt from shareholders over its controversial decision on senior bonuses despite making an adjusted EBITDA loss of $196.0 million in the first-quarter.

Total compensation of Penn National Gaming’s Jay Snowden for 2023 was $65,887,214. An astonishing amount for any CEO.

The vast amount came through a stock award of over $53 million dollars. The award has a stock price hurdle that requires significant shareholder value creation before it would pay at maximum. In addition, the company must sharply outperform the S&P 500 (be in the top 25th percentile of TSR percentile in order for it to vest.

In addition to this award, Snowden received a 28.6 percent increase in base salary, from $1,400,000 to $1,800,000. As I have noted before, unjustified increases in salary inflate pay not only at the particular company (where multiples of salary are typically used in plan design), but at other companies as well since they have a significant ratcheting effect among peer groups. In Snowden’s case the bonus paid out at 375 percent of his base salary, or $6,750,000.

Snowden’s package stands out compared to that of the other named executive officers (NEO). The next highest paid executive received $4,325,414. Many institutional investors have as part of their guidelines a suggestion that it is a red flag for the CEO to be paid too much compared to other executives within the organization. It is normal to have some gap, but the concern is that too much differentiation may discourage retention within the executive suite. Many guidelines vote against pay packages where the CEO makes more than three or four times the average NEO. In this case, the CEO’s payment is more than 15 times the next highest executive.