WILL PETA HAVE BOARDROOM ACCESS TO LOBBY FOR ITS PROPOSALS?

The People for the Ethical Treatment of Animals organization recently announced that it had purchased small amounts of stock in publicly traded racino companies, namely Boyd Gaming, Gaming and Leisure Properties, Penn National Gaming, and VICI Properties.  Penn National Gaming owns the largest number of racetracks of any company in North America.

These firms operate racinos in Louisiana, New Mexico, Ohio, Pennsylvania, Texas, and West Virginia.  Some of their many racetracks are Belterra Park, Evangeline Downs, Mahoning Valley, Mountaineer, Penn National, and Thistledown. 

PETA reportedly intends to offer eleven reform recommendations to the companies in which it now owns stock, such as banning medication for a horse in the two weeks leading up to a race; replacing dirt-track surfaces with synthetic surfaces; and banning whips (a change that lies within the purview of state racing regulatory bodies rather than racetracks.)

Kathy Guillermo, PETA Senior Vice President, said: “Track owners in California and Kentucky are changing their rules and sparing horses a gruesome death, and every track owner in every racing state needs to do the same.  PETA is eager to get inside the boardroom and push racetracks to make simple changes that will make a world of difference for vulnerable horses.”

The purpose here is not to discuss the merits of the eleven PETA proposals.  Rather, the intention is to evaluate the practicality of the stated PETA goal “to get inside the boardroom and push racetracks to make simple changes…”

Publicly traded companies almost always have social and governance initiatives advanced at annual meetings by activist shareholders that their respective boards of directors routinely advise shareholders to vote down, which they almost always do.  So it would be difficult, to say the least, for PETA to get a majority of shareholders to go along with a proposal that a board of directors is against.  Moreover, the eleven recommendations PETA has put forward are largely tactical matters that are decided by management rather than by boards of directors who properly focus on macro strategic and governance decisions.

The view here is that PETA will not have much success getting an audience with the board of directors of the aforementioned casino companies, for two reasons:  PETA does not own enough shares of stock to have much influence and most of their proposals are not sufficiently strategic to warrant the attention of boards of directors of large public corporations, especially in companies wherein horse racing is subordinate in importance to casino operations.

On a personal note, although I own a sizeable amount of stock in a well-known casino and racetrack corporation, it is doubtful that I could get the chief executive officer on the phone, much less influence a board of directors meeting.

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