Here at Small Screen, we have been covering news from Cineworld quite extensively in the time of this pandemic so far. Both from the critiques to handling over UK Staff with terminations and furloughs, looking to a CVA, the recent $450m debt cash flow deal and just why they’re in the situation they are in to begin with.
The company has lost a fortune over the crisis and remains billions in debt. Recent news in the UK business markets this evening report that Cineworld is looking for further anguish. This time with its shareholders.
It seems that despite the economic downturn, cinemas shuttered everywhere and the world’s second-biggest cinema chain being unable to operate it will award over £200 million in share awards to senior partners.
Virtually unlimited remuneration for Cineworld
Credit: Cineworld
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The vote enacting this is due next week, and advisory group Glass Lewis has stated this decision could in effect give “virtually unlimited remuneration” to those applicable. When thousands of its staff in the UK alone have been out of work since October it’s a surprising if not nauseating decision.
Some staff were forced to resign in order to claim their owed holiday pay, before the company took advantage of the UK furlough scheme a month later, and refused to take them back. They also let go of staff across the country who had served under 2 years and little employability rights.
Job Losses Continue Since October
Credit: Cineworld
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Members of management teams have also been let go in the past month as the company continues to restructure in the pandemic both voluntary and compulsory. The proposal would see the company’s leaders receive bonuses if the share price hits £1.90 within the next 3 years, which comes to around a £104m payout.
Chairman Mooky Greidinger who has called the Cineworld teams a “family” and his brother would be set to receive £33m each. It increases further however, the price then £3.80 further shares awarded to the amount of £208m would be distributed. It would amount to £65m for each brother.
This share price, considering the huge selection of blockbusters to come, is highly likely to be achieved over 3 years.
Hemorrhaging money
Credit: VUE
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For a company that is hemorrhaging money and demonstrates a history of mismanagement, both financially and operationally, along with making redundancies left right and centre – it seems highly repugnant.
The total amount would account for a 3,400% increase in the chief executive’s current salary. To come to pass 50% of the shareholders will have to vote in agreement, and should the company change hands, it will pay out in full.
So, what’s more likely, a £1.90 share price, or a take-over. Well, both are entirely possible.
The company is hugely in debt with little assets in some markets so a takeover could be at any point and has been long rumoured from Chinese businessman Liu Zaiwang.
And a share price boost is also easily permissible with the slate expected over the next 3 years. Whether it passes or not, the news itself has to be a huge knock to those who’ve been let go, or seen salaries vastly reduced due to the financial side of the company over the past 12 months.
What do you make of this news? Let us know your thoughts in the comments below.
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Reasonable Why not