Cineworld Faces Shareholder Revolt Over Pay Policy -- Update
--Proxy advisers recommend that Cineworld shareholders oppose
--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
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
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 email@example.com
(END) Dow Jones Newswires
May 07, 2021 09:17 ET (13:17 GMT)
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