Adam Aron and the AMC Entertainment board have agreed to reduce the CEO’s target compensation by 25% this year, he said, as he’s bombarded with hostility by the theater chain’s large group of retail shareholders angry at the sinking stock. It means the target amount that he’d be eligible for would be lower.
Aron didn’t give details. His 2022 compensation totaled $23.7 million, including a base salary of $1.5 million, a $6 million cash bonus, and stock awards valued at $16.2 million. Pay for 2023 will come out in spring proxy statements. In late 2022, he had asked the board to freeze his compensation for 2023.
“There is no anguish in my voice about that. That is what a CEO of a company like yours should do,” he said on a call after earnings, noting that he’s the company’s single biggest individual shareholder. “I mean it when I say I ride with you.”
The shares have fallen more than 8% in late trading, to about $4.56, after earnings today, down sharply from a 52-week high of over $70. The stock is back to its pre-meme levels — before small investors on Reddit’s Wallstreetbets, day traders and others piled in during Covid. They drove the price higher — similar to what happened with GameStop. The buying squeezed short sellers and some AMC shareholders blame a Wall Street conspiracy for keeping a lid on the price. Aron told them today to get over it — AMC is in the business of running theaters, not reforming financial markets, he said.
“There are many things that impact stock price. But my own view is basically this: it has taken way too long for the entire movie theater industry, including AMC, to recover from Covid. And no one needed for the movie industry to be paralyzed by a debilitating strike … The key issues are the long, drawn out recovery and the strikes, combined with the steps we have been forced to take to wade through four years of a depressed box office.” There is hope, of course, he said, and it starts this weekend with Dune: Part Two with a gradual improvement in 2024 and, hopefully, a full recovery in 2025 and 2026.
Aron has also been fighting with stockholders over selling new shares once the company got the authorization to do so after a court case last year. Issuing new shares dilutes the holdings of current shareholders. He was firm that stock sales and the cash cushion they provide are key. “Period. Plain and simple. There can be no argument. Cash is king.”
Sounding hurt, he slammed retail shareholders’ who trash talk him on social media, who say he’s “actively working against the interests of retail shareholders, and is in the side of evil.”
“I share in your frustration. I feel your pain.”