Jan 21, 2021
Cineworld facing revolt over proposed £65m CEO bonus scheme
Cineworld, the cinema chain whose business has been decimated by the pandemic, is facing a shareholder rebellion over a proposed bonus scheme that could award its chief executive up to £65m. Three top 30 shareholders told the Financial Times they would vote against the proposed pay package at a company meeting on Monday. The proposed incentive plan would put Cineworld's chief executive and deputy chief executive - the brothers Mooky and Israel Greidinger - in line to receive stock-based awards of up to 1.25 per cent of the company's issued shares if certain targets are hit. Glass Lewis, the proxy adviser, branded the potential payouts "Excessive", adding that based on the company's current share capital, the maximum payout would be approximately £65.2m. One big shareholder likened the proposal to a controversial pay plan at UK housebuilder Persimmon, which faced a backlash three years ago after it tried to award its chief executive a £110m bonus largely linked to a sharp rise in the company's share price. In its circular to shareholders, Cineworld argued that it needed to "Retain and motivate our highly regarded leadership team through the next phase of the company's recovery and beyond" and said it had consulted with its major shareholders on the design of the incentive plan. The Cineworld business grew out of the Greidinger family's first purchase of a cinema in 1930 and Israel Theatres, the family trust, is its biggest shareholder.
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