Lionsgate CEO Jon Feltheimer reaped the benefit from a year when his company cashed in on hits including The Hunger Games and the Twilight saga: His compensation rose 95.3% to $12.6M according to the company proxy out today. (The package: $1.3M salary, $6M bonus, $3.6M stock awards, $1.5M non-equity incentives, and $184,535 in other compensation.) But it seemed to pale next to the take for Vice Chairman Michael Burns, who had to report four years worth of option awards valued at $14M. With that included, he ended up with $28.2M, +406%. (The package: $970,962 salary, $4M bonus, $7.9M stock awards, $14M option awards, $1.3M non-equity incentives, and $33,484 other.) Lionsgate shares appreciated 70.8% in the fiscal year that ended in March. In making the awards, the board says it took into account the executives’ roles in integrating Lionsgate and Summit Entertainment; the increase in the stock price; sales of TV shows including Anger Management and Nashville; the early repayment of the Summit Entertainment term loan; and the performance of Hunger Games and The Twilight Saga: Breaking Dawn Part 2. Lionsgate will hold its annual shareholders meeting September 10 in Toronto.
Lionsgate CEO Jon Feltheimer Makes $12.6M In Fiscal 2013, +95%, But Vice Chair Michael Burns Does Even Better
The exec who helped to engineer this year’s acquisition of Summit Entertainment and refinancing deals that lowered Lionsgate’s interest costs will be well compensated in the new agreement that runs through October 2017. He’ll receive a base salary of $1M a year and a bonus targeted at half of that, according to the company’s SEC filing. Lionsgate also awarded him options to buy nearly 1.9M shares, plus 130,000 restricted stock units. He has leeway to take a big part of his bonus in stock. Burns also has other incentives to try to raise the share price: He can receive a bonus of $700,000 if the volume-weighted average price exceeds $17.00 for six consecutive months, with an additional $700,000 if it crosses $20.00, and an equal hit if it exceeds $23.00 for half a year — a potential total of $2.1M. And every three months he’ll receive shares equal to $187,500 based on the closing price on the last trading day before the quarterly issuance date beginning this past Friday. “We’re delighted that Michael will continue to help guide Lionsgate’s growth through 2017,” says CEO Jon Feltheimer. “From serving as our public face on Wall Street to reducing our cost of capital to helping spearhead our transition to a digital world, Michael is the best partner I could ask for, and he works tirelessly to create long-term shareholder value.”
Lionsgate’s Michael Burns On Staying Nimble, Getting Into The Jennifer Lawrence Business: Produced By Conference
Freelance writer Cari Lynn is a Deadline contributor based in Los Angeles.
Lionsgate has had a very good year and Vice Chairman Michael Burns, speaking today at the PGA’s Produced By conference, attributes this to staying nimble, embracing social media and banking on Jennifer Lawrence — all of which he says they’ll continue to do. The studio’s biggest hit The Hunger Games hit $400 million domestically this weekend. “The dream of any studio is to have franchises,” he said, looking to the opening of Hunger Games in China on 60 to 70 Imax screens. He’s also banking on the sequel to do even more since the book trilogy is catching on internationally. “We mitigate our risk with foreign pre-sales,” he says. Russia is also becoming a big market. “Several years ago, if someone had said Russia would be a giant territory, I’d have said, ‘have you been smoking weed?’ It was the same with China.” But asked if Lionsgate was going to move into worldwide distribution, the answer was a definitive No. “English-speaking is a place we like.” Foreign can be “too difficult. In some countries, for example, we can’t fire or hire people.”
Success breeds success on Wall Street. That seems to explain today’s nearly 10% surge in Lionsgate shares to $10.68 in early afternoon trading — a level they haven’t hit since mid-2008. Although the overall market is virtually flat, Lionsgate passed the $10-a-share mark this morning, and that’s a threshold for many big funds to move into a stock. Shares are up more than 28% so far in 2012. Today’s movement follows a generally upbeat response to this month’s $412.5M acquisition of Summit Entertainment, and positive buzz for The Hunger Games, which opens March 23. Stifel Nicholaus analyst Benjamin Mogil cited those two factors yesterday when he upgraded Lionsgate shares to “buy” from “hold” with a new target price of $12.50. Lionsgate execs also have been beating the drum, as Vice Chairman Michael Burns did yesterday in this appearance on CNBC:
Lionsgate Vice Chairman Michael Burns had to disappoint analysts who wanted him to open up about the big question of the day for his company: What’s going on with its reported merger talks with Summit Entertainment? “I’m not going to talk about any specific deal,” he said at the UBS Annual Global Media and Communications Conference. He noted, though, that a consolidation of independent film and TV companies is “a natural thing to happen.” He assured the group that Lionsgate is only interested in deals that add to its value, and don’t require it to either issue stock or take on additional debt. “We’re looking to delever, not lever up,” he says.
With that out of the way, he spoke candidly about the company’s plans for next year where he says “you’ll see us steady state for the first time” cranking out about a dozen movies and about three new TV shows. He’s encouraged about a plan to develop a TV series for ABC based on The Lincoln Lawyer – and Charlie Sheen’s Anger Management. ”I’ve known Charlie a long, long time,” Burns said. “Our goal is to keep Charlie working, keep him healthy — and we have a great partner in FX.” Burns says that a series it’s developing for
Lionsgate vice chairman Michael Burns appeared on CNBC this morning for a fairly wide-ranging interview that touched on the indie studio’s flirtation with Summit Entertainment, how it enjoys being a pure-play content creator and distributor, its slate, and how much it loves Netflix.
Lionsgate CEO Jon Feltheimer’s $7.9M Compensation Package For FY 2011 Up 116.8% Thanks To Carl Icahn
Billionaire Carl Icahn did a big favor for Lionsgate execs when he accumulated more than 33% of the stock in June 2010. That triggered change-in-control clauses in executives’ contracts, accelerating their stock payments for the fiscal year that ended this past March. An SEC filing out today shows that Feltheimer received $1.2M in salary and a $1.9M bonus — but nearly $4.8M in stock, up from $412,800 the previous year. The company also paid for personal expenses including $23,882 for club membership dues. Feltheimer’s bonus was down $50,000 in a year when Lionsgate shares increased less than 1%. The filing says that there are ”no specific financial performance targets or other objective performance criteria” for executives’ bonus awards; they’re based on ”a subjective determination” about how well they did. But Feltheimer was by far the highest-paid exec at Lionsgate: He made 250% more than the runner up, General Counsel Wayne Levin, with $3.2M. Feltheimer accounted for 46% of the total amount that went to the company’s top five execs who also included Vice Chairman Michael Burns ($2.7M), Co-COO Joseph Drake ($2M), and CFO James Keegan ($1.5M).
Welcome to the real-life game of Survivor: Wall Street. Lionsgate management tonight is trying to outwit, outplay, and outlast Carl Icahn before he effects a hostile takeover of the movie/TV studio for his son Brett. Lionsgate tonight announced it’s putting into place a “Shareholder Rights Plan” — i.e. a poison pill defense — to cap Icahn at 38% of its stock (he is currently at 37.9%) so he can’t do a “creeping bid” through open market purchases like he did today or private market transactions. ”If he wants control of the Company, he should make a bid that is fair to all shareholders along the lines of a permitted bid described in the press release below,” a studio insider tells me.
Today, Icahn’s stake rose to 37.9%, or 44.8M shares, of Lionsgate. With 12+% more stock, he can become its majority stockholder. And then Lionsgate’s 12-member board, and the studio’s management team of Jon Feltheimer and Michael Burns, all have a target on their backs. Icahn’s $7 a share tender offer expired at midnight Wednesday, and left him with a 33.9% stake in Lionsgate. (Icahn Now Owns 33.9% Of Lionsgate) Today, he acquired an additional 4% more of the company by buying on the open market. Lionsgate’s immediate reaction was effectively to enact a poison pill defense. But it enacted a poison pill months ago — to prevent Icahn from accumulating over 20% of Lionsgate stock through his tender offer — and Canadian regulators nixed that measure. Can that happen again?
Here is tonight’s Lionsgate statement:
SANTA MONICA, Calif., and VANCOUVER, British Columbia, July 1, 2010 — Lionsgate (the “Company”) today announced that its Board of Directors has adopted a Shareholder Rights Plan that is designed to encourage the fair and equal treatment of Lionsgate’s shareholders in connection with any initiative to acquire effective control of the Company.
The studio sees the glass as half full, putting out a statement that “66% of Lionsgate stockholders support management and rejected Carl Icahn’s $7-a-share tender offer. But after that offer expired last night, Carl Icahn now owns 33.9% of the Santa Monica movie and television studio which he’s been attempting to control for his son Brett through a hostile takeover. I’ve already reported that Lionsgate Vice Chairman Michael Burns flew to NYC last week to break bread with Icahn and discuss, among many topics, Lionsgate’s merger talks with MGM. But the rehetoric from both sides remains nasty. So can a negotiated settlement be reached before Icahn starts that promised expensive proxy fight prior to the studio’s annual shareolders meeting this September? the next news may well be Icahn’s announcement of a full slate of directors to replace Lionsgate’s board. here’s Lionsgate’s statement today:
At the completion of the Icahn Group’s offer, holders of over 66% of Lionsgate shares have rejected the Icahn Group’s offer, with only 2.1% of the outstanding shares being tendered into the offer during the subsequent offering period.
We want to take this opportunity to thank our shareholders. Lionsgate’s shareholders have repeatedly confirmed their support for the Board and management’s strategy to grow shareholder value by continuously rejecting the Icahn Group’s financially inadequate offer.
Our focus continues to be running the business to build value for all of our shareholders. As reflected in our strong fiscal 2010 results,
EXCLUSIVE: Reliable sources tells me that Lionsgate vice chairman Michael Burns flew to NYC on Wednesday night to have dinner with Carl Icahn “to see if they could work together and avert a hostile takeover of the studio”. This is a very big deal because in recent months and weeks the two men have been sparring very publicly on CNBC. Or Icahn and Lionsgate management have been sending nasty letters to shareholders and even nastier news releases to the media about each other. I understand that Burns explained why Lionsgate is having merger talks with MGM. That may be the reason why Carl was not completely dismissive of the idea Friday – but not why he still slammed management for distracting from the studio’s problems. Remember, a proxy fight like the one Icahn has pledged to wage is a very expensive proposition. And now that Lionsgate stock has joined the Russell 2000 index and jumped past Carl’s $7-a-share tender offer, Icahn may have to offer at least $7.50 to control more than 32% of the studio. Thus making his hostile takeover still more pricey.