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The estate agent Savills and Cineworld, the UK\u2019s biggest movie chain, have been hit by significant pay revolts by shareholders in a backlash over reward packages awarded to bosses during the pandemic.<\/p>\n
Almost 30% of investors in Britain\u2019s largest cinema chain failed to back a controversial new award scheme that could see bosses awarded more than \u00a3200m in shares if Cineworld\u2019s shares bounce back to pre-pandemic levels.<\/p>\n<\/p>\n
Cineworld, which will begin reopening its 127 UK sites next week as pandemic restrictions are lifted, reported that 27.7% of investors either voted against the share award scheme or abstained, which is often viewed as a protest vote.<\/p>\n
In addition, 27.8% failed to approve the company\u2019s remuneration report at its annual general meeting on Wednesday. And 15.7% of investors abstained or voted against the reappointment of Dean Moore, the chair of Cineworld\u2019s remuneration committee.<\/p>\n
The company, which has secured more than $1bn in financial lifelines to weather the pandemic, reported a record $3bn (\u00a32.1bn) loss for last year as cinema closures took its toll.<\/p>\n
But if the company\u2019s share price can return to pre-pandemic levels, its chief executive, Mooky Greidinger, and his brother and deputy Israel, will receive awards worth \u00a333m each.<\/p>\n
Mooky was paid \u00a3791,000 last year, less than half the \u00a31.68m he received in 2019, after the company moved to cut bonuses and share awards in light of the pandemic. Israel was paid \u00a3650,000, compared with \u00a31.3m in 2019.<\/p>\n
However, Cineworld\u2019s directors and non-executive directors are to receive a total of \u00a31.1m for taking a pay cut between April and June last year, which is due to be paid \u201cat a later date\u201d, according to its annual report published last month.<\/p>\n
Responding to the vote the company said that it would \u201ccontinue its dialogue with shareholders on remuneration matters\u201d.<\/p>\n
At Savills, the subject of a rare \u201cred top\u201d warning from the Investment Association, more than a quarter of investors failed to approve the company\u2019s remuneration report at its annual meeting.<\/p>\n
The company paid Mark Ridley, the chief executive, a \u00a3350,000 bonus despite failing to hit the minimum profit target required to trigger an award last year. <\/p>\n
The company, which made pre-tax profits of \u00a384.7m last year versus the minimum requirement of \u00a3120m, also paid Ridley \u00a3500,000 for meeting 90% of his separate \u201ckey objectives\u201d during the pandemic.<\/p>\n
Almost a fifth (19.6%) of investors voted against the company\u2019s remuneration report, while a further 6.1% abstained.<\/p>\n
\u201cThe board understands that shareholders\u2019 primary concern was its decision to take into account a wider number of operational and strategic performance metrics than the profit targets set prior to the pandemic,\u201d Savills said. <\/p>\n
\u201cThe board is satisfied that its recommendation was made in the best interests of all stakeholders. In light of the voting outcome \u2026 [the company] will engage with our leading shareholders over the coming months.\u201d<\/p>\n
Cineworld was braced for a pay revolt after investor advisory services said the new policy was excessive, but only 30% of shareholders voted against the plan at a special meeting in January. <\/p>\n
The schemes, which required 50% voter approval to be implemented, were never in any real doubt of being passed as the Greidinger family control 20% of Cineworld.<\/p>\n
The proposed long-term incentive plan will reward the company\u2019s senior executive team if Cineworld\u2019s share price bounces back to 190p within three years. If this level \u2013 which is close to its pre-pandemic level of 197p \u2013 is reached, bosses will share \u00a3104m. <\/p>\n
If the share price reaches the upper cap of 380p, executive directors would between them be awarded shares worth a total of \u00a3208m. Shares were trading at 91.6p on Wednesday.<\/p>\n
Cineworld\u2019s 5,500 UK staff have been out of work since October, when the company closed all its 127 sites indefinitely after the announcement that the release of the next James Bond film would be delayed until later this year.<\/p>\n
The world\u2019s second-largest cinema chain, which includes almost 540 sites in the US, started reopening in north America on 2 April.<\/p>\n
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