AMC Entertainment awarded its chief executive Adam Aron with a $3.75 million bonus during a period when the theater chain dismissed a number of employees and was forced to close cinemas amid the coronavirus pandemic.
What Happened: The company said the bonuses recognized the “extraordinary efforts of employees” during the COVID-19 pandemic.
Aron will receive $3.75 million, in part for his work to “encourage continued engagement and retention, and incentivize our management and employees during the continuing and unprecedented difficult business conditions.”
Executives other than Aron are in line to receive bonuses in the range of $173,000 to $507,000.
The Leawood, Kansas-based theater chain took a huge blow from the pandemic and was forced to shut down operations for a large part of last year.
Movie theaters now face multi-pronged setbacks: Lockdown measures have forced movie-goers to stay home and try out alternatives, as movie studios experiment by releasing movies directly on streaming platforms.
After the coronavirus outbreak in March last year, AMC closed around 1,000 of its theatres around the world. During that period, over 26,000 AMC employees were laid off, including Aron, who worked without salary for a certain period.
AMC has staved off bankruptcy for the time being, but it’s safe to say many shareholders will be left wondering if now is the time to dish out bonuses to leadership in a still massively disrupted industry.
Many believed AMC was heading for bankruptcy, however, the company managed to negotiate its massive debt and said it has now secured enough money to keep operating. AMC has substantially increased its debt over recent years due to massive investments in theaters and acquisitions of rivals including Carmike Cinemas and UCI & Odeon Cinema Group.
Fresh Scenes Ahead: There could, however, be light at the end of the tunnel for AMC and its peers. On Monday, shares of AMC were trading higher after the company announced it will reopen its 13 theaters in New York City on March 5.
The rally came after Governor Andrew Cuomo announced theaters across New York state are permitted to re-open.
“Since reopening our first theaters with AMC Safe & Clean in August, AMC has welcomed back nearly 10 million moviegoers nationwide without a single reported case of COVID-19 transmission among moviegoers at our theaters,” CEO and President Adam Aron said in a press release.
Before receiving the $3.75 million bonus last year, Aron was paid $1.25 million in bonuses in November and a total compensation package of $9.67 million in 2019.
