Bosses at Cineworld have persuaded enough shareholders to vote in favour of a huge new bonus scheme that could see its chief executive net £65 million as part of a bonus pot worth up to £208 million.
Investors holding just over 70% of shares voted for the new long-term incentive plan, despite Cineworld receiving taxpayer support through furlough and tapping up shareholders for cash to avoid collapse during the pandemic.
Alicja Kornasiewicz, chair of the cinema chain, said: “We acknowledge that there were a significant number of votes cast against the plan and the board will continue to engage with shareholders on remuneration matters in the coming months in light of the feedback received during our consultation.”
The company, which is the world’s second-largest cinema operator, had expected a backlash although in the end 69.25% and 70.15% voted in favour of the remuneration and long-term incentive plans respectively.
Prior to the vote, proxy advisers for shareholders Glass Lewis and ISS had described the plans for the bonus as “excessive”.
They also questioned whether the chief executive, Mooky Greidinger, required further incentives considering his family already have a 20% stake in the business.
To get a £33 million payout Cineworld’s share price must hit 190p within three years – back to levels it was at prior to the pandemic. To unlock £65 million it must hit 380p. Shares were down 3.18% at 64p by Monday lunchtime.
More than 5,000 staff have been furloughed while its 127 UK cinemas, including its Picturehouse brand, are shut.
Bosses have also faced up to big name blockbusters being delayed or being moved straight to streaming services – risking the chances of a swift recovery.
Last week producers revealed that the latest James Bond film is being postponed a second time – from April to October.
In November bosses secured a £336 million (450 million US dollars) debt lifeline to help guide the troubled cinema chain through the coronavirus pandemic.
The group, which has also been forced to close its US sites, said at the time it had also secured access to another £233 million (310 million dollars) in liquidity to boost its finances.
At the time it also extended an £83 million revolving credit facility, which was due to expire next month, to May 2024, and pulled forward an expected tax refund of more than £150 million to early 2021.