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UNITE HERE Shareholder Engagement With Caesars Entertainment Results in Commitment for Corporate Governance Reform
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
Caesars Entertainment (CZR) has agreed to implement a majority vote standard for uncontested director elections by July 2022. This decision comes after UNITE HERE threatened to solicit proxies for a shareholder proposal on the matter. In 2019, approximately 70% of shareholders supported this change, highlighting a demand for increased shareholder influence. The reform aligns with corporate governance best practices, allowing shareholders to have a stronger voice in the election of directors.
Positive
Commitment to implement a majority vote standard by July 2022 enhances shareholder influence.
70% shareholder support in 2019 indicates strong backing for governance improvements.
Negative
Delay in implementing majority voting standard for over two years may raise governance concerns.
Potential for shareholder unrest if future proposals are ignored.
Caesars Will Implement a Majority Vote Standard for Director Elections in July 2022
NEW YORK--(BUSINESS WIRE)--
UNITE HERE and Caesars Entertainment, Inc. (NASDAQ: CZR) have reached an agreement whereby Caesars has committed to implement a majority vote standard for uncontested director elections at its Board of Directors meeting in July 2022. The agreement came after UNITE HERE provided notice to Caesars of its intention to independently solicit proxies for a majority vote shareholder proposal at the Company’s upcoming annual meeting, asking shareholders to vote on the issue for a second time. Seventy percent of shareholders previously voted in favor of the majority vote standard at the Company’s annual meeting in 2019 (when the Company was known as Eldorado Resorts, Inc., prior to its acquisition of Caesars Entertainment Corporation).
“We appreciate Caesars Entertainment’s decision to move to a majority vote standard for uncontested director elections. This reform will create a more meaningful voice for shareholders in selecting directors. As a relatively new S&P 500 company and as a leader in the gaming industry, Caesars Entertainment should be responsive to its shareholders and a role model for best corporate governance practices,” said UNITE HERE Senior Research Analyst L. Tchernyshyov.
In 2019, UNITE HERE made five non-binding proposals at Eldorado Resorts, the company which acquired Caesars Entertainment in 2020.1 The proposals included a recommendation to adopt a majority vote standard, which was approved by 70% of shareholders.2 After the Company failed to take any action to implement a majority voting standard for over two years, UNITE HERE informed Caesars of its intention to re-run the shareholder proposal at the 2022 annual meeting. In response, Caesars committed to implementing a majority voting standard, and UNITE HERE agreed it would not independently solicit proxies at the upcoming annual meeting.
UNITE HERE engages with companies in support of corporate governance improvements. “We believe that board responsiveness is critical to upholding shareholder rights and maximizing long-term shareholder value,” Tchernyshyov added.
About UNITE HERE
UNITE HERE represents hospitality workers in the United States and Canada. UNITE HERE’s members are beneficiaries of pension funds with over $60 billion in assets. UNITE HERE works to improve shareholder rights and is a member of the Council of Institutional Investors.
