Investors in Britain’s largest cinema chain have approved a controversial incentive scheme that could result in bosses being awarded more than £200m in shares, while acknowledging that 30% of shareholders who voted rejected the plan.
Cineworld, which closed all of its 127 sites in the UK and Ireland indefinitely in October, held a vote on a new pay policy and long-term incentive plan at a special meeting.
The cinema owner had been expecting a significant shareholder revolt after ISS and Glass Lewis, two influential investor advisory services, recommended rejecting the policies, branding them as unjustifiably excessive.
Investors accounting for 67% of Cineworld’s total shares voted. Of those, 30% voted to reject the policies.
“We are pleased that the plan has been supported by a wide range of our shareholders,” said Alicja Kornasiewicz, the chair of Cineworld. “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 schemes, which required 50% voter approval to be implemented, were never in any real doubt of being passed as the Greidinger family control 20% of Cineworld.
If the scheme hits its top target then the chief executive, Mooky Greidinger, and his brother and deputy, Israel, will receive awards worth £33m each.
The proposed long-term incentive plan will reward the company’s senior executive team if Cineworld’s share price bounces back to 190p within three years. If this level – which is close to its pre-pandemic level of 197p – is reached, bosses will share £104m. If the share price reaches the upper cap of 380p, executive directors would between them be awarded shares worth a total of £208m. Shares were trading at 64p on Monday.
Cineworld’s 5,500 UK staff have been out of work and furloughed since October, when the company closed all its sites indefinitely after the announcement that the release of the next James Bond film would be delayed. There has been a significant round of voluntary and compulsory redundancies since then.
In November, Cineworld secured financial lifelines from lenders worth $750m (£560m) to weather the coronavirus pandemic until May. On Monday, the Odeon owner, AMC, the world’s largest cinema chain, announced it had raised more than $900m, which its chief executive said “put any talk of an imminent bankruptcy off the table”.