Over the past ten days Regal Entertainment Group gave guidance on 2017 earnings by announcing their revenue had declined last year, as well as making public the bonuses and pay raises some of its senior executives would be receiving in 2018. Regal, which is in the process of being acquired by Cineworld, is the second largest exhibitor in the United States, presently operating 7,321 screens in 560 cinemas.
As expected, and in alignment with industry figures throughout the territory, 2017 was a down year for Regal across the board. Box office receipts were fell 2.6% from the previous year and concessions was dropped 0.3%. Attendance at Regal theatres declined 6.7% to 197 million. Regal says an increase in ticket prices and concession sales per patron offset the decline in attendance. The latter was assisted by an expansion of the circuit’s food and alcohol offerings.
Despite the red ink needed to record 2017 revenue, Regal’s board of directors approved cash bonuses and pay raises on January 12th for four of its C-suite executives. This might seem inappropriate after such a financially disappointing year, especially one which saw Regal’s stock dip over 20% before the Cineworld merger was announced. Keep in mind however that such bonuses and pay increases are usually based on meeting targeted milestones and annual performance reviews as is the case here.
The 2017 performance bonuses for Regal’s executives were as follows:
|Executive and Position||Cash Bonus|
|Amy E. Miles, Chief Executive Officer||$1,055,600|
|Gregory W. Dunn, President and Chief Operating Officer||$631,200|
|David H. Ownby, Executive Vice President, Chief Financial Officer and Treasurer||$495,975|
|Peter B. Brandow, Executive Vice President, General Counsel and Secretary||$442,000|
The salaries Regal’s executives will receive in 2018 is as follows:
|Executive and Position||Fiscal 2018 Salary|
|Amy E. Miles, Chief Executive Officer||$1,108,800|
|Gregory W. Dunn, President and Chief Operating Officer||$675,000|
|David H. Ownby, Executive Vice President, Chief Financial Officer and Treasurer||$605,000|
|Peter B. Brandow, Executive Vice President, General Counsel and Secretary||$538,200|
It is also worth noting that the target-based cash bonus Regal CEO Amy Miles is eligible to receive for 2018 was raised to 125% of her base salary, up from 100%.
Of course, if the Cineworld deal closes many of these senior level of executives may not be with Regal at this time next year. They wouldn’t leave empty handed though. Miles, for instance, signed a three year contract extension in November of last year which, in the event of termination due to a change of control in the company, mandates that she receive two-and-half years’ salary as well as two times her target bonus within 30 days.