--Proxy advisers recommend that Cineworld shareholders oppose remuneration policy

--Legal & General Investment Management plans to escalate vote position on concerns over pay package

--LGIM plans to vote against re-election of Cineworld's chair and members of the remuneration committee

 

By Adria Calatayud

 

Cineworld Group PLC faces a potential shareholder revolt at its annual general meeting due to be held on Wednesday after advisory firms recommended shareholders reject its remuneration policy.

Proxy advisers Institutional Shareholder Services and Glass Lewis cited concerns over potential excessive payouts to executives and change of control provisions that would discourage potential buyers from making an offer for the company.

ISS also recommended shareholders in Cineworld, the owner of U.S. cinema chain Regal, reject the company's remuneration report and the re-election of Dean Moore, chair of the board's remuneration committee, as director.

ISS said the structure of Cineworld's long-term incentive plan raises concerns on multiple fronts, including the amount of awards, the lack of stretch in the performance conditions, and that they would vest automatically on a change of control. Due to the severity of the remuneration concerns, shareholder support isn't considered warranted for the re-election of Mr. Moore, ISS said.

Legal & General Group PLC's investment-management arm plans to vote against re-election of Cineworld's chairwoman and all members of the board's remuneration committee due to concerns over its incentive plan.

"We have strong concerns about the structure of the long-term incentive plan granted to the executives, and its misalignment with the long-term interests of the company, its shareholders and other stakeholders," Legal & General Investment Management said in a blog post published Thursday.

"In particular, we note the impact of Covid-19 on the company's financials and stakeholders, including furloughs for employees and the suspension of dividends. We also take into account the current social sensitivities around income inequality," LGIM said.

The London-based asset manager said it would vote against resolutions to re-elect Cineworld Chairwoman Alicja Kornasiewicz as director at the company's annual general meeting due to be held on Wednesday. LGIM also said it would oppose the re-election of Mr. Moore and Camela Galano, member of the remuneration committee, and the election of Ashley Steel, member of the committee, as director.

Cineworld declined to comment on Friday. In its AGM circular, the company said its board believes the proposed resolutions are in the best interests of shareholders and the company as a whole and recommended that shareholders vote in favor of them.

LGIM said it had chosen to escalate its vote position as it was concerned by the lack of response from the company's remuneration committee and board despite significant opposition from shareholders to its pay proposals.

LGIM said it already raised concerns about Cineworld's pay package at a special shareholder meeting held in January. At that meeting, two remuneration resolutions were approved despite significant minority opposition.

Glass Lewis and ISS recommended that shareholders oppose Cineworld's remuneration proposals at the January meeting.

 

Write to Adria Calatayud at adria.calatayud@dowjones.com

 

(END) Dow Jones Newswires

May 07, 2021 09:17 ET (13:17 GMT)

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