³ÉÈËÓ°Òô

Cineworld Group plc shareholders voted in favour of a controversial remuneration policy at the company’s general meeting on Monday, 25 January 2021, which would award £65m each in shares to chief executive, Mooky Greidinger and his deputy and brother, Israel Greidinger. This falls under the new Long-Term Incentive Plan (2021 LTIP) and will be offered in full if the company’s share prices reach £1.90 (close to its pre-pandemic level of £1.97). Whilst the meeting in significant no votes of 30.7% against the Directors remuneration policy and 29.85% against the 2021 LTIP, this fell short of the requisite 50% to turn down the resolutions, despite warnings from advisory groups Glass Lewis and Institutional Shareholder Services (ISS). Executive directors also have a maximum opportunity of 150% of their salary for their annual bonus as part of the policy.

The general meeting was held in order to put to a vote the revised remuneration policy, which expires this year, after last being approved in 2018. The policy had not been proposed at the 2020 AGM and was postponed until now due to the ‘unprecedented impact of Covid-19 on the cinema industry’. The outcome of the general meeting is in line with the  in favour of the remuneration report at the . The overwhelming support represents a win for Cineworld, given that according to Market Tracker trend report: Voting results - the 2020 AGM season, the directors’ remuneration report was the most voted down resolution last year.

The ISS stated that ‘Given the exposure of the cinema industry to external factors outside of the executives’ control, this is not considered an appropriate performance incentive’. The ISS also noted that the Greidinger family, control 20% of Cineworld, and questioned whether there was ‘a genuine need to further incentivise’ the owners.

Cineworld has already put the majority of its employees on furlough with partial salary deferral for most of its full-time employees. The company also entered into discussions with all its key suppliers to reduce costs and implement payment plans, and the highlighted a drop in financial performance in the UK with revenue at $123.8m (six months to 30 June 2020) compared to 2019 (six months to 30 June 2019) at $316.4m. Despite showing continued struggles with the onset of lockdown and cinema closures, the FTSE 250 company is adamant that the 2021 LTIP ‘is necessary to reward and incentivise the Executive Directors and other senior executives in light of the challenging market conditions Cineworld faces globally.’

In its , the Investment Association stated that ‘COVID-19 has resulted in many employees being furloughed, asked to take pay-cuts or resulting in large scale redundancies. Remuneration Committees and management teams should be even more mindful of the wider employee context through this period and the impact that it should have on pay outcomes for the executive directors.’ Although executive directors at Cineworld voluntarily agreed to defer payment of their salaries and non-executive directors voluntarily agreed to defer their fees, this does not seem to be serving much purpose in light of the general meeting results.

The board acknowledged the ‘significant number of votes cast against the plan’ and Cineworld’s Chair, said the board would ‘continue to engage with shareholders on remuneration matters in the coming months in light of the feedback received during our consultation’.