Shares in Cineworld Group PLC (LON:CINE) moved lower on Monday after the cinema chain suffered a large shareholder rebellion over the pay package for its directors.
Announcing the results of the vote on its new long-term incentive plan, the FTSE 250 firm reported that investors representing 30.8% of the voting shares had opposed the director's remuneration policy, while 29.9% had voted against the long-term incentive plan.
READ: Cineworld gets US$750mln lifeline as banks agree new loan
Alicja Kornasiewicz, Cineworld’s chair, acknowledged that there had been “a significant number of votes cast against the plan” and that 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 investor revolt against the payment plans revolves around a new bonus scheme for Cineworld’s directors that would see CEO Mooky Greidinger pocket £65mln as part of a pot worth up to £208mln despite the company receiving taxpayer financial support and tapping its shareholders for funds in order to stave off bankruptcy during the coronavirus (COVID-19) pandemic.
In November, the firm also secured additional bank facilities of US$450mln to keep it afloat until next May as part of a package of measures worth a total of US$750mln.
The plans for such a massive payday for executives may also carry an extra sting for shareholders given the company’s shares have plunged around 65% over the last 12 months as the pandemic forced the firm to shutter its cinemas across the world.
Cineworld, where Greidinger's family trust owns a 20% stake, is not the only cinema chain having to raise huge sums of cash to keep itself afloat during the pandemic, with US-listed competitor AMC Entertainment Holdings Inc (NYSE:AMC) announcing on Monday that it has raised around US$917mln to see itself through the pandemic winter.
Shares in Cineworld were up 0.6% at 66.5p in late-afternoon trading on Monday.