AMC Entertainment CEO Adam Aron received a $3.75 million bonus at a time when many of the company’s employees have been laid off and several of its theaters are closed due to COVID-19, according to public filings.
It’s been a grueling period for the world’s largest theater chain, one that has seen its cinemas shuttered indefinitely or operating at reduced capacity for much of the last 12 months as the coronavirus pandemic raged. AMC Entertainment, which was heavily leveraged heading into the pandemic, was believed to be on the verge of bankruptcy. However, Aron and his team were able to renegotiate the company’s substantial debt at several points and AMC now says it has raised enough capital to keep itself operational through the winter. AMC Entertainment piled on debt in recent years as it outfitted locations with enhanced seating and purchased competitors such as Carmike Cinemas and UCI & Odeon Cinema Group.
Aron also hammered out an agreement with Universal Pictures that allowed the company to release its movies on-demand within 17 days of their theatrical release in exchange for giving AMC a percentage of their home entertainment revenues.
Aron may have shown a deft hand at renegotiating the company’s debt and finding fresh sources of capital, but he did make one notable misstep. While promoting the safety measures that AMC was taking to reopen during COVID-19, he said mask-wearing would be optional in certain states where it was not legally mandated.
“We did not want to be drawn into a political controversy,” he told Variety at the time, a comment that inspired a social media backlash. AMC later pivoted and announced that mask-wearing would be required in all of its venues.
At one point in March, all of the company’s roughly 1,000 locations around the world were closed. That caused more than 26,000 theater employees to be furloughed, including Aron, who worked without pay for a period of time. Some of those employees have been hired back as theaters have reopened in major markets. However, a major box office revival has yet to take place and some centers of moviegoing, such as Los Angeles, remain closed, while others, like New York City, are scheduled to welcome back customers in a limited capacity next week. AMC’s stock recently got a big boost during the 2021 GameStop short squeeze.
Aron previously received a $1.25 million bonus in November. In 2019, Aron received a total compensation package worth $9.67 million. That package included a base salary of $1.25 million base salary, as well as $6.48 million in stock awards and $1.92 million in non-equity incentive plan compensation.