Although he just retired as CEO of Cinemark, Alan Stock won’t have to worry about being able to afford the large sized popcorn when he visits the theater. His new job as a consultant for the No. 3 exhibition chain will pay him $1.3M for the rest of 2012, $1M for 2013, and $333,675 for the first four months of 2014, the company says in an SEC filing. He’ll also continue to participate in Cinemark’s welfare benefit plans and insurance programs. He can’t join or assist a competitor during the consulting period, but can invest in up to five theaters as long as they’re at least 25 miles away from a Cinemark venue. He’s subject to a confidentiality agreement “during the Term and thereafter to the fullest extent permitted by law.” Stock and Cinemark also agreed not to say anything nasty about each other. The company said yesterday that Stock wanted to retire, and has been replaced by Tim Warner.
UPDATE, 6:40 AM: CEO Alan Stock made his comment in a conference call with analysts who asked what he’d do if Sony continues with its plan to stop paying for 3D glasses — leaving it to exhibitors to manage the expense. ”We think the way the glasses model works in the U.S. is a great way to work it,” he said. He added that there’s still a lot of time to negotiate before next summer, when Sony wants the change to take place. “I’m pretty confident we can work out a solution,” Stock says. “If we can’t, we’ll have to head in a different direction.” Regarding Universal’s plan, which it canceled, to show Tower Heist on cable VOD just three weeks after opening in theaters, Stock says the studio “thought they had something the exhibitors would comply with.” After Cinemark threatened to boycott the film, “there hasn’t been any further discussion of that particular test, or anything else they’re working on.”
The movie theater chain says its debt-refinancing effort sliced $4.9M from 2Q earnings. As a result Cinemark reported net profits of $40.4M, up 1.8% vs the same period last year, on revenues of $620.6M, up 15.1%. Earnings at 35 cents a share were short of the consensus forecast of 39 cents — but the company beat the $593.6M revenue projection. Admissions revenues increased 15.0% to $405.9 million and concession revenues increased 14.6% to $189.3 million. Cinemark, which has a big presence in Latin America as well as the U.S., says that attendance was up 9.8% in the quarter despite an average 4.6% increase in ticket prices; domestically, tickets were up 2.6% to an average of $6.64. The average consumer also spent 4.4% more than last year on concessions. “This quarter Cinemark generated its highest-ever quarterly worldwide attendance and as a result we achieved our highest-ever quarterly adjusted EBITDA,” says Cinemark CEO Alan Stock. “This record performance extended our domestic industry box office out-performance streak to 11 straight quarters. Our international circuit continues to distinguish itself with attendance growth of approximately four times the U.S. industry rate for the quarter.”
The money is flowing again into Big Media. Just about every media CEO who recently spoke to Wall Street analysts about this year’s 1st Quarter earnings said that ad sales are up and consumers are spending. “Viacom has never been stronger financially,” CEO Philippe Dauman crowed. At Disney, where net profits fell slightly, CEO Bob Iger expressed he was “confident in the trends we’re seeing across our segments”. So will these companies do more hiring and give out raises? Don’t be naive. Dauman, for one, told investors that he’s “watching for head count creep” while the company returns $1.9 billion to shareholders over the first 9 months of its fiscal year. Most Big Media companies are buying back their stock, making publicly held shares more valuable. CBS doubled its quarterly dividend to shareholders and Viacom plans to follow suit.
Here are some of the other major themes from this earnings season:
TV Advertising: Network executives were predictably upbeat about what will happen in their upfront ad sales negotiations in coming weeks. Disney CEO Bob Iger predicted the market will be “strong”. NBCUniversal chief Steve Burke upped that to “very strong”. And News Corp COO Chase Carey claimed it’ll be “truly strong”. Their pronouncements made CBS chief Les Moonves sound refreshingly bold when he projected “solid double-digit increases” in ad sales for his broadcast network. Executives cited the price increases they’ve seen in scatter sales as the economy has improved and auto, technology, telecom, …
My previous post showed that a lot of media company bigwigs have pay that’s out of whack with the other 4 top executives whom the SEC requires these corps to list. Now I want to show the flip side — CEOs that don’t set off alarm bells with corporate governance experts. Top dogs like News Corp’s Chase Carey, Comcast/NBCUniversal’s Steve Burke, Cinemark’s Alan Stock, World Wrestling Entertainment’s Kevin Dunn, Dreamworks Animation’s Jeffrey Katzenberg, Dish Network’s Charlie Ergen, Netflix’ Reed Hastings, AMC Entertainment’s Gerardo Lopez, Regal Entertainment Group’s, and National Cinemedia’s Kurt Hall make no more than 3 times as much as the average for the 4 other top executives whose compensation is listed in the annual proxy statement to shareholders. Let’s be clear: We aren’t saying that the executives below are fairly or unfairly paid. But they work at companies where the boards of directors at least seem to recognize that multiple people deserve the credit for the company’s performance:
1. Microsoft: B. Kevin Turner. Here’s an indication of how technology companies differ from most media ones: Executives in tech don’t depend so much on annual compensation. They typically own a lot of stock and profit when it appreciates. So CEO Steve Ballmer, who owns nearly 4.8% of Microsoft’s shares, is the lowest paid top executive listed in Microsoft’s proxy, with $1.4 million in compensation for the fiscal year that ended in June. Turner, the COO, …