DEF 14A of Cinemark Holdings, Inc.
Filed Apr 2, 2024 · FY20230000950170-24-040155
Item 1: Election of Class II Directors
Item 1: Election of Class II Directors Our Board is comprised of 11 members, the majority of whom are independent. The size of the Board may be fixed from time to time exclusively by our Board as provided in our Certificate of Incorporation. Our Board consists of three classes of directors, designated as Class I, Class II and Class III. The members of each class are elected to serve a three-year term, with the term of each class ending in successive years. The term of the current Class II directors, Ms. Antonellis and Messrs. Sepulveda and Zoradi, expire at the Annual Meeting. All nominees have been recommended by the Nominating and Corporate Governance Committee (“Governance Committee”) and nominated by the Board for re-election at the Annual Meeting. Ms. Antonellis and Messrs. Sepulveda and Zoradi have consented to be nominated for re-election to the Board as a Class II director. If elected, they will serve on the Board for a three-year term expiring on the date of our 2027 annual meeting of stockholders. At this time, we have no reason to believe that any nominee will be unable or unwilling to serve if elected. However, should any of them become unable or unwilling to serve before the Annual Meeting, your proxy card authorizes us to vote for a replacement nominee if the Board names one.
Item 1: Election of Class II Directors
| | The Board recommends a vote FOR each director nominee. |
Item 1: Election of Class II Directors
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BOARD COMPOSITION
BOARD COMPOSITION
Director Skills and Qualifications
Director Skills and Qualifications The nominees and continuing members of the Board collectively possess the knowledge, skills and unique perspectives needed to successfully guide our Company toward continued sustainable growth. They possess broad-based business knowledge, outstanding achievement in their professional careers, a commitment to ethical values, executive leadership and meet the Company’s articulated director qualifications, including independence, accountability, integrity, sound judgment in areas relevant to the Company’s businesses and diversity of background. In addition, our nominees and directors have demonstrated experience and expertise in a number of different substantive areas relevant to the Company, such as theater and retail operations; e-commerce; marketing and brand management; strategic planning; real estate; risk management; legal, compliance and regulatory matters; mergers and acquisitions; and finance. Our Board reflects a diversity of experience in varying substantive areas relevant to our operations and industry, as well as background, gender, race and age. The following summarizes certain aspects of the Board’s current composition: The following matrix provides information regarding the members of our Board, including certain types of skills, experience and attributes possessed that our Board believes are relevant to our business. The matrix does not encompass all of the skills or experience of our directors.
Director Skills and Qualifications
| Skill/Experience Matrix | | | | | | | | | | | | | Experience | Director | | | | | | | | | | | | | | | | | | | | | | | | | Financial Literacy | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | | ✓ | ✓ | | Financial Management/Corporate Finance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Accounting and Financial Oversight | ✓ | | ✓ | ✓ | | ✓ | ✓ | | | | | | Corporate Governance | ✓ | ✓ | | ✓ | | ✓ | ✓ | | | ✓ | | | CEO Experience | ✓ | | ✓ | | ✓ | | ✓ | | ✓ | ✓ | ✓ | | Executive Experience | | ✓ | | ✓ | | ✓ | | ✓ | | | | | Industry Knowledge | ✓ | | ✓ | | ✓ | | | ✓ | ✓ | | ✓ | | Mergers and Acquisitions | | ✓ | ✓ | ✓ | ✓ | | | ✓ | | | | | Other Public Company Board Service | ✓ | ✓ | | | | ✓ | ✓ | ✓ | | ✓ | ✓ | | Leadership | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Risk Management | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Strategic Vision and Planning | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Information Technology and Cybersecurity | ✓ | ✓ | | ✓ | | | | | | ✓ | |
Director Skills and Qualifications
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Director Skills and Qualifications
| CLASS II DIRECTORS STANDING FOR ELECTION |
Director Skills and Qualifications
| Darcy Antonellis | | | | Director Since: 2015 Nominee of: Board Board Committees: Audit Committee; Compensation Committee; Strategic Planning Committee (Chair) Age: 61 Other Public Company Boards: 2 | Skills and Qualifications • CEO and executive experience • NACD Cybersecurity Oversight Certified • Critical technology and cybersecurity experience • Accounting and financial management expertise • Media-related technologies, operations and content monetization expertise Other Current Board Experience • Xperi • Bango PLC Previous Board Experience • Not Applicable | Professional Highlights Since June 2023, Ms. Antonellis serves as Operating Advisor at ABS Capital Partners, a private equity firm focused on emerging growth software and tech-enabled services with data foundations. From September 2021 until March 2023, Ms. Antonellis served as Executive Advisor, Amdocs Inc. (NASDAQ: DOX), a leading software and services company to communications, media, financial and digital enterprises. From February 2018 through August 2021, Ms. Antonellis served as Division President, Amdocs Inc. and CEO, Vubiquity Inc. a subsidiary of Amdocs Inc. (acquired by Amdocs 2018). From January 2014 until February 2018, Ms. Antonellis served as CEO, Vubiquity Inc. From June 1998 until December 2013, Ms. Antonellis held a number of positions at Warner Bros Entertainment Inc. including President of Technical Operations and Chief Technology Officer. Ms. Antonellis is NACD.DC Directorship Certified. |
Director Skills and Qualifications
| Carlos Sepulveda | | | | Director Since: 2007 Nominee of: Mitchell Investors Board Committees: Audit Committee; Compensation Committee Chairman Age: 66 Other Public Company Boards: 1 | Skills and Qualifications • CEO and executive experience • Extensive public accounting experience; certified public accountant • Accounting and financial oversight experience • Strategic planning and management expertise Other Current Board Experience • Triumph Financial Previous Board Experience • Matador Resources Company | Professional Highlights Since its inception in 2010, Mr. Sepulveda has been the Chairman of the board of directors of Triumph Financial (NASDAQ: TFIN), a financial holding company, formerly known as Triumph Bancorp, offering a diversified line of payments, factoring and banking services. From 2004 to 2013, Mr. Sepulveda was the President and CEO of Interstate Battery System International, Inc. (Interstate Batteries), a company that supplies automotive, commercial and industrial batteries, and its Executive Vice President from 1993 until 2004. Prior to joining Interstate Batteries, Mr. Sepulveda was an audit partner at KPMG LLP in Austin, New York and San Francisco for 11 years. |
Director Skills and Qualifications
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Director Skills and Qualifications
| Mark Zoradi | | | | Director Since: 2015 Nominee of: Board Board Committees: Strategic Planning Committee Age: 70 Other Public Company Boards: None | Skills and Qualifications • CEO and executive experience • Veteran motion picture executive with a background in distribution and exhibition • Wealth of knowledge regarding strategic partnerships within the exhibition industry and exhibitor relationships with movie studios • Management and oversight experience at large public companies within the industry Other Current Board Experience • Not Applicable Previous Board Experience • National CineMedia, Inc | Professional Highlights Mr. Zoradi served as our CEO from August 2015 to December 31, 2021. Mr. Zoradi spent 30 years at The Walt Disney Company, a major motion picture studio, including serving as the President of Walt Disney Studios Motion Picture Group. Prior to that, Mr. Zoradi served in a variety of positions of increasing responsibility with The Walt Disney Company, including as the General Manager of Buena Vista Television and President of Buena Vista International with responsibility for the international theatrical and home entertainment marketing and distribution of Disney, Touchstone and Pixar films. Mr. Zoradi also served as the President and Chief Operating Officer (COO) of Dick Cook Studios from January 2011 until July 2014 and the COO of Dreamworks Animation SKG, Inc. from August 2014 until January 2015. |
Director Skills and Qualifications
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Director Skills and Qualifications
| CLASS III DIRECTOR NOMINEES TERM EXPIRING 2025 |
Director Skills and Qualifications
| Benjamin Chereskin | | | | Director Since: 2004 Nominee of: Board Board Committees: Compensation Committee; Strategic Planning Committee Age: 65 Other Public Company Boards: 1 | Skills and Qualifications • Strategic planning and finance growth opportunities • Extensive knowledge and experience in corporate finance, mergers and acquisitions • Executive compensation experience Other Current Board Experience • Not Applicable Previous Board Experience • Boulder Brands, Inc. • CDW Corporation | Professional Highlights Mr. Chereskin is President of Profile Capital Management LLC (Profile Management), an investment management firm, which he founded in October 2009. Prior to founding Profile Management, Mr. Chereskin was a Managing Director and Member of Madison Dearborn Partners, LLC, a private equity firm, from 1993 until October 2009, having co-founded the firm in 1993. |
Director Skills and Qualifications
| Kevin Mitchell | | | | Director Since: 2023 Nominee of: Mitchell Investors Board Committees: Strategic Planning Committee Age: 55 Other Public Company Boards: None | Skills and Qualifications • CEO experience • Depth of experience in the motion picture industry • Real estate expertise Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | Professional Highlights Since May 2023, Mr. Mitchell has served as a managing member of Showbiz Direct Distribution. In 2007, Mr. Mitchell founded and served as CEO of ShowBiz Cinemas, a bowling, movies and family entertainment concept which he sold in December 2021. Mr. Mitchell has over 30 years of experience in the motion picture theater industry. Mr. Mitchell has also served as an advisory board member for the National Association of Theatre Owners and has served on the Board of Will Rogers Motion Picture Pioneers Foundation, Variety the Children’s Charity of Texas and Chuck Norris’ Kickstart Kids. |
Director Skills and Qualifications
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Director Skills and Qualifications
| Ray Syufy | | | | Director Since: 2006 Nominee of: Board Board Committees: Strategic Planning Committee Age: 61 Other Public Company Boards: None | Skills and Qualifications • CEO experience • Deep knowledge of the motion picture industry • Strategic planning expertise, particularly with respect to competition from other forms of entertainment • Operational expertise • Real estate expertise Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | Professional Highlights Mr. Syufy began working for Century Theatres, Inc. (Century Theatres), a regional movie exhibitor, in 1977, and held positions in each of the major departments within Century Theatres. In 1994, Mr. Syufy was named President of Century Theatres and was later appointed CEO and Chairman of the board of directors. Mr. Syufy resigned as an officer and director of Century Theatres upon the consummation of our acquisition in 2006. Since then, Mr. Syufy has presided as CEO of Syufy Enterprises, Inc. (Syufy Enterprises) a retail and real estate holding company with operations in California, Nevada, Arizona, Colorado, and Texas. Mr. Syufy is currently the Chairman of NATO CA/NV. |
Director Skills and Qualifications
| Sean Gamble | | | | Director Since: 2022 Nominee of: Board Board Committees: None Age: 49 Other Public Company Boards: None | Skills and Qualifications • Veteran motion picture executive with distribution and exhibition experience • Management and executive experience • • Strategic planning experience Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | Professional Highlights Mr. Gamble has served as our President and Chief Executive Officer since January 2022. Mr. Gamble has been our President since July 28, 2021, and our Chief Operating Officer since January 2018. Mr. Gamble was our Executive Vice President and Chief Financial Officer from August 2014 until he became our CEO in 2022. Prior to joining Cinemark, Mr. Gamble worked for the Comcast Corporation as Executive Vice President and Chief Financial Officer of Universal Pictures within NBCUniversal from February 2009 to April 2014. He joined Comcast after 15 years at the General Electric Company where he held multiple senior leadership positions, including CFO of GE Oil & Gas’ equipment business based in Florence, Italy, from May 2007 to January 2009. |
Director Skills and Qualifications
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Director Skills and Qualifications
| CLASS I DIRECTORS TERM EXPIRING 2026 |
Director Skills and Qualifications
| Nancy Loewe | | | | Director Since: 2017 Nominee of: Board Board Committees: Audit Committee (Chair and Financial Expert); Governance Committee Age: 56 Other Public Company Boards: None | Skills and Qualifications • CFO and executive experience • Accounting and financial management expertise • Risk oversight experience • Previous large public company management and oversight experience Other Current Board Experience • Not Applicable Previous Board Experience • Not Applicable | Professional Highlights Ms. Loewe has been the Chief Financial Officer (CFO) of CelLink since November 2022. Prior to that, Ms. Loewe served as the CFO of Weyerhaeuser Company, one of the world’s largest private owners of timberlands; a Senior Vice President - Finance of Visa, Inc., a multinational financial services corporation; as the CFO for Kimberly-Clark International and the Chief Strategy Officer and Global Treasurer for Kimberly-Clark Corporation, a multinational personal care corporation. She has also served as Vice President and CFO of Frito Lay North America. Additionally, Ms. Loewe held numerous positions during her 20-year tenure at General Electric, inside and outside the U.S., including Vice President - Strategic Transactions & Cash, as well as CFO for varying business units, such as Plastics Asia, Healthcare, and Consumer & Industrial. |
Director Skills and Qualifications
| Steven Rosenberg | | | | Director Since: 2008 Nominee of: Board Board Committees: Governance Committee (Chair); Audit Committee Age: 65 Other Public Company Boards: 1 | Skills and Qualifications • Risk management, corporate governance and general management expertise • Accounting and financial management expertise • Management experience Other Current Board Experience • Texas Capital Bancshares, Inc. Previous Board Experience • PRGX Global, Inc. | Professional Highlights Mr. Rosenberg is the Manager of SPR Ventures Inc., a private investment firm he founded in 1997. He was the President of SPR Packaging LLC, a manufacturer of flexible packaging, from 2006 to 2018. |
Director Skills and Qualifications
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Director Skills and Qualifications
| Enrique Senior | | | | Director Since: 2004 Nominee of: Board Board Committees: Strategic Planning Committee Age: 80 Other Public Company Boards: 4 | Skills and Qualifications • Extensive knowledge of film, media and entertainment, and beverage industries • Strategic planning and management expertise • Executive experience Other Current Board Experience • Groupo Televisa S.A.B. • Coca-Cola FEMSA, S.A. • Femsa S.A. de C.V. • Univision Communications Previous Board Experience • Not Applicable | Professional Highlights Mr. Senior is a Managing Director of Allen & Company LLC, a boutique investment bank, and has been employed by the firm since 1972. He has served as a financial advisor to several corporations including Coca-Cola Company, General Electric, CapCities/ABC, Columbia Pictures Tri-Star Pictures and other entertainment companies. |
Director Skills and Qualifications
| Nina Vaca | | | | Director Since: 2014 Nominee of: Board Board Committees: Governance Committee; Compensation Committee (Chair) Age: 52 Other Public Company Boards: 1 | Skills and Qualifications • CEO and executive experience • Wealth of leadership and business experience particularly in information technology and e-commerce • Governance and executive compensation expertise Other Current Board Experience • Comerica, Inc. Previous Board Experience • Kohls, Corp. | Professional Highlights Ms. Vaca is the founder, Chairman and CEO of the Pinnacle Group of companies, including Pinnacle Technical Resources, Inc. (together, Pinnacle) and Vaca Industries, Inc. Founded in 1996, Pinnacle is an information technology services and solutions provider. |
Director Skills and Qualifications
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2023 Director Compensation Table
2023 Director Compensation Table
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total Compensation Actually Received ($) | | Darcy Antonellis | 110,000 | 134,998 | 244,998 | | Benjamin Chereskin | 102,500 | 134,998 | 237,498 | | Nancy Loewe | 112,500 | 134,998 | 247,498 | | Kevin Mitchell | 85,000 | 134,998 | 219,998 | | Steven Rosenberg | 107,500 | 134,998 | 242,498 | | Enrique Senior | 85,000 | 134,998 | 219,998 | | Carlos Sepulveda | 195,000 | 134,998 | 329,998 | | Raymond Syufy | 85,000 | 134,998 | 219,998 | | Nina Vaca | 112,500 | 134,998 | 247,498 | | Mark Zoradi | 85,000 | 134,998 | 219,998 |
2023 Director Compensation Table
(1) The grant date fair values were calculated in accordance with FASB ASC Topic 718. See Note 18 to the Company’s 2023 Annual Report on Form 10-K, for discussion of the assumptions used in determining the grant date fair values of these share based awards, including forfeiture assumptions and the period over which the Company will recognize compensation expense for such awards. In accordance with the Compensation Committee Charter, the Compensation Committee, in consultation with the Governance Committee, sets the compensation of our Board members. Pearl Meyer, the Compensation Committee’s independent compensation consultant, periodically reviews and provides the Compensation Committee with a comparison between the Company’s director compensation practices and those of other similarly situated companies. The Board makes changes to its director compensation practices only upon the recommendation of the Compensation Committee and following discussion and unanimous concurrence by the full Board. The compensation of our non-employee directors is subject to our Third Amended and Restated Non-Employee Director Compensation Policy (“Director Compensation Policy”). Under the Director Compensation Policy, a non-employee director is one who is not (i) an employee of the Company or any of our subsidiaries or (ii) an employee of any of the Company’s stockholders which has contractual rights to nominate directors. Therefore, Mr. Gamble did not receive any compensation for his services on the Board or any of its committees for 2023. The compensation of the directors during 2023 pursuant to our Non-Employee Director Compensation Policy is as follows: (a) a base director retainer of $80,000; (b) additional retainer of $90,000 for the non-employee director who serves as the non-executive Chairman of the Board; (c) additional cash retainer for services on the committees as follows:
2023 Director Compensation Table
| Committee | Chair ($) | Member ($) | | Audit | 25,000 | 12,500 | | Compensation | 25,000 | 12,500 | | Governance | 15,000 | 7,500 | | Strategic Planning | 10,000 | 5,000 |
2023 Director Compensation Table
Annual cash retainers are paid in four equal quarterly installments at the end of each quarter for services rendered during the quarter. All directors are reimbursed for travel related expenses incurred for each Board meeting they attend. In addition to the annual cash retainers, each non-employee director receives an annual grant of restricted stock valued at $135,000. The number of shares of restricted stock granted is determined by dividing $135,000 by the closing price of Common Stock on the grant date, rounded down to the nearest whole share. The grant date is typically on or around June 15. The annual stock awards vest on the first anniversary of the grant date subject to continued service to the Company through the vest date. The directors are also subject to our stock ownership guidelines and are required to retain common stock ownership five times the value of their base retainer. Our Amended and Restated 2017 Omnibus Incentive Plan (the “2017 Plan”) imposes a $1,000,000 limit on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum of (i) cash compensation and (ii) the grant date fair value of equity compensation under the 2017 Plan.
2023 Director Compensation Table
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Pay Practices We Utilize
| Base salary | Competitive, market-driven base salary. | | Link pay to performance | A significant portion of executive compensation is linked to Company performance. A substantial majority of our NEOs fiscal 2023 compensation was variable compensation tied to our financial performance. | | Alignment of performance metrics with Company’s strategy | Compensation aligned with successful implementation/deployment of the Company’s short- and long-term strategies through a variety of performance metrics used in our performance-based incentive programs. | | Risk mitigation | Caps on the maximum level of payouts, multiple performance metrics and board oversight or approvals to mitigate undue risk. | | Stock ownership guidelines | Stock ownership guidelines ensure that our executive officers and directors are financially invested in the Company alongside our stockholders. | | Limited perquisites | Limited perquisites to our executives. | | Change of control | Employment agreements that contain double triggers for change in control. | | Compensation clawback | Ability to recoup certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements. |
Pay Practices We Avoid
| Risk | We do not reward imprudent risk taking. | | Change in control | There are no “single trigger” provisions in employment agreements for change in control. | | Pension | No pension benefits. | | No short-sales or hedging and restricted pledging transactions | Strictly prohibit officers and directors from engaging in short selling, put, call, or other derivative transactions or hedging or other monetization transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds, in our common stock. | | No tax gross-ups | No tax gross-ups on compensation or personal benefits. | | No repricing underwater stock options | Equity plan prohibits the repricing of stock options or SARs. |
Principal Elements of 2023 Executive Compensation
Principal Elements of 2023 Executive Compensation The pay elements that we utilize are crafted to attract and retain top talent, pay for performance and strike a balance between performance and risk taking. We achieve these goals by offering both short-term and long-term incentive awards, which include a mix of both time- and performance-based vesting requirements, each of which aligns the interests of our executives with our stockholders and encourages focus on both short and long-term success. Overall, a considerable portion of the compensation payable to our named executive officers is “pay-at-risk.” The following chart illustrates how base salary, short-term incentive awards, restricted stock and performance stock units were allocated for fiscal 2023. For the purposes of the below illustration, the short-term incentive award has been valued at the actual payout amount and the performance stock units have been valued at the target amount on the grant date.
Principal Elements of 2023 Executive Compensation
| | | CEO | Other NEOs | | | | Base Salary | | | ▪ Base salary provides reasonable yet market-competitive fixed pay reflective of an executive’s role, responsibilities and individual performance | | | Short-Term Incentive Program | | | ▪ Payout under the 2023 STIP was based on achievement of Adjusted EBITDA goals that were aligned with our annual operating budget | | | | Performance Stock Unit Award | | | | | Annual Equity Awards | | | ▪ The performance goals related to our 2023 performance stock unit awards are based on the achievement of three-year cumulative Adjusted EBITDA goals and three-year cumulative cash flow goals for the period January 1, 2023 - December 31, 2025. Performance stock units are not earned unless a threshold level is achieved. Performance stock units cliff vest on the third anniversary of the grant date. | | | | Restricted Stock Award | | | | | | | | ▪ Restricted stock awards that vest ratably over a 3-year period and incentivizes retention |
Short-Term Performance-Based Incentive Awards
Short-Term Performance-Based Incentive Awards
Introduction
Introduction Our short-term incentive program (“STIP”) is an annual cash-based performance incentive award program, typically based on metrics established in our annual operating budget and which requires the achievement of a threshold level of financial performance for any payout. The participants in our STIP are rewarded for achieving short-term financial and operational goals based upon individual targets expressed as a percentage of base salaries. For the named executive officers, the target STIP opportunities are set by the Compensation Committee taking into account a variety of factors, including peer group data, CEO’s recommendation (except for his own) and the individuals current and anticipated contribution to the strategic goals of the Company. Each participant in our STIP is entitled to receive a ratable portion of his/her target payment based upon the Company’s level of achievement, within the range of threshold and maximum percentages, of the target metric set by the Compensation Committee. As part of the year-end performance review process, the manager for each participant in the STIP (other than the CEO) evaluates such individual’s performance against his/her annual business objectives and goals. Based upon this review a discretionary modifier up to a maximum +/- 15% may be applied to adjust the individual’s STIP payout (“ABO Modifier”). Each STIP payout is calculated by applying the following formula:
Introduction
| Base SalaryX | Target Payment (% of Base Salary)X | % Attainment | +/- | ABO Modifier | = | Actual STIP Payout |
2023 STIP Award Opportunities
2023 STIP Award Opportunities
2023 STIP Award Opportunities
| Name | Position During 2023 | % of base salary | Threshold (% of target) | Target (% of target) | Maximum (% of target) | | Sean Gamble | President and Chief Executive Officer | 150% | 50% | 100% | 200% | | Melissa Thomas | Executive Vice President-Chief Financial Officer | 90% | 50% | 100% | 200% | | Michael Cavalier | Executive Vice President-General Counsel and Business Affairs, Secretary | 90% | 50% | 100% | 200% | | Valmir Fernandes | President-Cinemark International | 90% | 50% | 100% | 200% | | Wanda Gierhart | Chief Marketing & Content Officer | 70% | 50% | 100% | 200% |
2023 STIP Award Opportunities
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2023 STIP Performance Goals and Results
2023 STIP Performance Goals and Results The Compensation Committee sets performance goals for the STIP in February of each year, and has historically established threshold, target, and maximum payout goals based on Adjusted EBITDA, which is regarded as a key performance metric in our industry and a core valuation metric for our shareholders. For 2023, the Compensation Committee used worldwide Adjusted EBITDA to establish the STIP targets, which was based on the annual operating budget approved by our Board of Directors. The cash bonus achievement under the STIP is determined using the Company’s reported Adjusted EBITDA with certain add-backs and adjustments for cash bonus accruals, certain severance payments, if any, dividends from non-subsidiaries, revenues from National CineMedia, LLC, unusual expenses such as those related to accounting changes, a +/-5% collar for foreign exchange fluctuation, the industry box office adjustment discussed below and other adjustments the Compensation Committee deems appropriate, including, but not limited to, factors such as extraordinary, unusual and non-recurring events that were not included in the approved annual operating budget (the “STIP Adjusted EBITDA”). Our performance is highly dependent upon the timing, popularity and quantity of films released by the distributors, which requires a significant number of assumptions and projections in setting the budgeted Adjusted EBITDA target. In recognition of the uncertainty around setting such assumptions, the Compensation Committee determined that the STIP Adjusted EBITDA target may be adjusted, upward or downward, at the end of each performance year, to eliminate any variance between the actual North American and Latin American industry box office for the fiscal year and the industry forecasts used to set the STIP target for the year. North American industry box office performance and relevant Latin American attendance assumptions meaningfully impacts our Adjusted EBITDA due to its effect on attendance-driven revenue and costs but is largely outside of the Company’s control. The industry box office adjustment is intended to modify the STIP Adjusted EBITDA target to eliminate the negative or positive impacts of these non-controllable factors. The STIP Adjusted EBITDA target is adjusted upward or downward by approximately $10 million for every 1% change in the North American industry box office assumptions used for setting the 2023 annual operating budget and upwards or downwards by approximately $2 million for every 1% change in associated Latin America industry attendance assumptions used for setting the 2023 annual operating budgets. Results between the percentages are interpolated. The worldwide STIP Adjusted EBITDA targets for 2023 were as follows:
2023 STIP Performance Goals and Results
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2023 STIP Payouts
2023 STIP Payouts As outlined in 2023 achievements, Cinemark significantly outperformed the industry box office results and our peers operating and financial results through diligent focus and execution in advancing our strategic initiatives to position the Company for long-term success. As a result, Cinemark delivered industry-leading results in each of its key performance metrics, including total revenues, Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and net leverage ratio. In 2023 the North American industry box office was $9.1 billion, which exceeded by approximately 7% the $8.5 billion North American box office assumption. The associated industry attendance in relevant Latin America territories exceeded the approved annual operating budget by approximately 17%. As a result of the combined North American box office and Latin America attendance over performance, the STIP Adjusted EBITDA targets were adjusted upward as follows: In February 2024, the Compensation Committee certified the STIP Adjusted EBITDA calculation for the STIP and approved the STIP amounts to be paid for the 2023 performance period. The Company attained world-wide Adjusted EBITDA of $594.1 million (calculated as set forth on Annex A) for the year ended December 31, 2023. The Company's out-performance to target was primarily fueled by growth in food and beverage per caps and average ticket price, maintaining market share gains and lower film rental rates. As a result, the Compensation Committee determined that, after giving effect to the adjustments discussed above, the STIP Adjusted EBITDA achieved was $550.0 million, or 116% of the STIP Adjusted EBITDA target, as adjusted for industry results, equating to a payment of 181% of the individual target for each of the NEOs. The 2023 STIP payments for our NEOs are illustrated in the table below.
2023 STIP Payouts
| Name | Target ($) | Target Payment (% of Base Salary) | % Attainment | ABO Modifier | Actual STIP Payout ($) | | Sean Gamble | 1,350,000 | 150% | 181% | — | 2,443,500 | | Melissa Thomas | 540,000 | 90% | 181% | 7.5% | 1,017,901 | | Michael Cavalier | 540,000 | 90% | 181% | 7.5% | 1,017,901 | | Valmir Fernandes | 522,000 | 90% | 181% | 15.0% | 1,023,121 | | Wanda Gierhart | 378,000 | 70% | 181% | 7.5% | 712,530 |
Annual Equity Incentive Awards
Annual Equity Incentive Awards
Introduction
| Restricted Stock Awards – designed to reward executives for increases in stockholder value (through our stock price) as well as maintain the continuity of our leadership. | These awards have a three-year ratable vesting schedule from the grant date, which enhances the retentive and motivational value of the awards and balances the value delivered over time. | | Annual Performance Stock Unit Awards – designed to drive results based upon achievement of certain pre-established performance metrics relating to performance period determined by the Compensation Committee. | These awards vest 100% on the third anniversary of the grant date, provided the applicable performance goals were achieved for the established performance period. |
Introduction
Our equity awards are subject to forfeiture if the recipient fails to remain employed through the vesting period. Holders of unvested restricted stock are entitled to vote the underlying shares and receive dividends. Holders of unvested performance stock units have dividend rights that accrue and are paid on the vesting date to the extent the holder remains employed by the Company. Special grants of equity awards may also be authorized by the Compensation Committee for, among other things, new hires and promotions, exceptional performance or retention purposes.
2023 Annual Equity Incentive Awards
2023 Annual Equity Incentive Awards The Compensation Committee determined the annual equity grant for each of our NEOs at its regularly scheduled February 2023 meeting. For the NEOs, the equity grant was split with approximately 40% of the total grant value consisting of restricted stock awards (“RSA”) and the remaining 60% awarded in performance stock unit awards (“PSU”). The Compensation Committee established a three-year performance period for the 2023 performance stock unit awards. The targets for the performance stock units were established by the Compensation Committee at the time of grant and are based upon the Company’s three-year cumulative Adjusted EBITDA and three-year cumulative cash flows for the 2023, 2024 and 2025 fiscal years (each with equal weighting), as these metrics are relevant for achieving the Company’s strategic goals of continuing to strengthen the Company's balance sheet and position the Company for long term success. Performance stock units may be earned only if the Company’s three-year cumulative Adjusted EBITDA and three-year cash flows are greater than the threshold amount established for each. Similar to the STIP, industry box office performance meaningfully impacts Adjusted EBITDA and cash flows. Accordingly, the industry box office adjuster is used to adjust the STIP Adjusted EBITDA target and the Adjusted EBITDA and cash flow targets for PSUs. Each of the named executive officers received an annual equity grant at their target levels. The table below shows the grant date value of the restricted stock awards and performance stock units.
2023 Annual Equity Incentive Awards
| Name | Target Equity % of Base | Target RSA ($)1 | Target PSU ($)1 | Total Award ($) | | Sean Gamble | 600 | 2,160,000 | 3,240,000 | 5,400,000 | | Melissa Thomas | 175 | 420,000 | 630,000 | 1,050,000 | | Michael Cavalier | 175 | 420,000 | 630,000 | 1,050,000 | | Valmir Fernandes | 150 | 348,000 | 522,000 | 870,000 | | Wanda Gierhart2 | 150 | 324,000 | 486,000 | 810,000 |
2023 Annual Equity Incentive Awards
1. The grant date fair values were calculated in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures). 2. Ms. Gierhart also received a special grant of restricted stock awards with a grant date value of $500,000, which will vest on the third anniversary of the grant date. See Grants of Plan-Based Awards on page 34.
Roles and Responsibilities
| | ▪ Approves the compensation levels and performance targets under our STIP and our long-term annual equity incentive awards (“LTIP”) for our President & Chief Executive Officer and also determines whether and to what extent pre-established performance targets have been met. ▪ Approves all components of our President and Chief Executive Officer’s compensation, including base salary, STIP and any LTIP. In the compensation-decision making process for our other NEOs ▪ Responsible for approving all components of executive compensation as well as for approving performance targets for our STIP and any LTIP targets, and determining whether and to what extent any pre-established performance targets have been met. ▪ Reviews and approves all new and revised executive compensation programs. | | Human Resources Officer | In the compensation-decision making process for our President & Chief Executive Officer ▪ Works with our compensation consultant to develop and review benchmark information. In the compensation-decision making process for our NEOs ▪ Works with President & Chief Executive Officer to develop recommendations for all components of the officers’ compensation, including recommending compensation levels and performance targets under our STIP and any LTIP. | | Chief Executive Officer | In the compensation-decision making process for our other NEOs ▪ Works with our Human Resources Officer to develop recommendations for all components of an officers’ compensation, including recommending compensation levels and performance targets under our STIP, annual equity awards, and any LTIP. ▪ Reviews the recommendations with the Compensation Committee. | | Independent Compensation Consultant | ▪ Provides market data, benchmark research, survey information, peer group selection recommendations, and other research relating to executive compensation. ▪ Works with our human resources team, including our Human Resources Officer and the Compensation Committee. |
Competitive Market Positioning
Competitive Market Positioning For 2023, the Compensation Committee retained Pearl Meyer as its independent compensation consultant. All research for executive compensation conducted by Pearl Meyer is provided to the Compensation Committee. In 2023, Pearl Meyer assisted with the determination and recommendation as to the form and amount of director and executive compensation. The Compensation Committee evaluated the independence of Pearl Meyer under applicable NYSE rules, including the services provided and the associated fees paid, and has concluded that Pearl Meyer was independent and that its engagement did not present any conflicts of interest. The Compensation Committee conducted a review of the direct compensation components paid to our NEOs against a specific benchmark peer group, with a focus on base pay, annual performance incentive pay and stock-based compensation. This benchmark group consisting of 14 companies (referred to as the “Peer Group”), was selected based on the following attributes: ▪ Companies within a specified range of the Company’s revenues and market capitalization. ▪ Companies within media and entertainment, leisure facilities and restaurant industries. Companies with which we may compete for executive talent.
Competitive Market Positioning
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Competitive Market Positioning
The Peer Group is reviewed, updated, and approved annually by the Compensation Committee and may change periodically. The 2023 Peer Group was comprised of the following companies:
Competitive Market Positioning
| AMC Entertainment Holdings, Inc. | Bloomin’ Brands, Inc. | Brinker International, Inc. | | Cedar Fair, L.P. | Cineplex, Inc | Cineworld Group, LLC | | Dave & Buster’s Entertainment, Inc. | Hyatt Hotels Corporation | IMAX Corporation | | Lions Gate Entertainment Corp. | Live Nation Entertainment, Inc. | Six Flags Entertainment Corporation | | The Madison Square Garden Company | Wyndham Hotels & Resorts, Inc. | |
Competitive Market Positioning
The Compensation Committee also uses survey compensation data provided by Pearl Meyer. Utilizing the peer data and the survey data, the Compensation Committee evaluates the amount and proportions of base salary, annual incentive pay and long-term compensation, as well as target total direct compensation for the Company’s NEOs. Compensation Committee decisions are qualitative and a result of the Compensation Committee’s business judgment, which is informed by the market data provided by Pearl Meyer. The Compensation Committee believes that the compensation opportunities provided to our Named Executive Officers are appropriate. The Compensation Committee continues to monitor current trends and will modify its programs as it determines appropriate.
SUMMARY COMPENSATION TABLE FOR 2023
SUMMARY COMPENSATION TABLE FOR 2023 The following table sets forth summary information concerning the total compensation earned by our NEOs for each of the last three completed fiscal years.
SUMMARY COMPENSATION TABLE FOR 2023
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Sean Gamble(6) | 2023 | 900,000 | — | 5,399,991 | 2,443,500 | 59,002 | 8,802,493 | | President and Chief Operating Officer | 2022 | 825,000 | — | 3,628,435 | 1,423,125 | 78,090 | 5,954,650 | | | 2021 | 687,587 | — | 1,507,181 | 963,000 | 24,522 | 3,182,560 | | Melissa Thomas | 2023 | 596,164 | | 1,049,985 | 1,017,900 | 28,107 | 2,692,156 | | Executive Vice President – | 2022 | 575,000 | — | 987,849 | 815,063 | 19,868 | 2,397,780 | | Chief Financial Officer | 2021 | 95,833 | 500,000 | 3,546,616 | — | — | 4,142,450 | | Michael Cavalier | 2023 | 597,699 | — | 1,049,985 | 1,017,900 | 59,074 | 2,724,658 | | Executive Vice President – | 2022 | 583,334 | — | 1,005,030 | 829,238 | 73,303 | 2,490,905 | | General Counsel & Business Affairs, Secretary | 2021 | 563,578 | — | 952,966 | 672,067 | 29,086 | 2,217,697 | | Valmir Fernandes | 2023 | 577,699 | — | 869,985 | 1,023,120 | 56,712 | 2,527,516 | | President – Cinemark | 2022 | 563,336 | — | 832,005 | 839,025 | 68,350 | 2,302,716 | | International | 2021 | 555,012 | — | 736,396 | 661,852 | 31,775 | 1,985,034 | | Wanda Gierhart(7) | 2023 | 537,699 | — | 1,309,982 | 712,530 | 42,558 | 2,602,769 | | Chief Marketing & Content Officer | 2022 | 520,833 | — | 920,352 | 537,469 | 47,546 | 2,026,201 |
SUMMARY COMPENSATION TABLE FOR 2023
(1) Ms. Thomas was employed as of November 8, 2021. The amount shown for salary in 2021 reflects the pro-rata amount paid during 2021 based upon an annual salary of $575,000. (2) Ms. Thomas received a $500,000 sign-on bonus in February 2022. The reported numbers reflect the aggregate grant date fair market values of the annual restricted stock awards and performance stock units at target granted in February of each year, the merit increase grants on March 10, 2021 and the special grants to Messrs. Gamble and Cavalier on July 28, 2021 as part of the reorganization of the executive leadership team announced in connection with Mark Zoradi’s retirement. Ms. Thomas was granted 163,816 shares of restricted stock in November 2021 as part of her Employment Agreement which vest over 4 years. For more information on the vesting of Ms. Thomas’ grant refer to the Company’s current report on Form 8-K filed with the SEC on October 13, 2021.
SUMMARY COMPENSATION TABLE FOR 2023
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SUMMARY COMPENSATION TABLE FOR 2023
The values set forth in this column represent the aggregate grant date fair value of time-based restricted stock and performance-based performance stock units computed in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures). The grant date fair values of the performance stock units are based on target achievement as the most probable outcome, computed in accordance with FASB ASC Topic 718. See Note 18 to the Company’s 2023 Annual Report on Form 10-K for a discussion of the assumptions used in determining the grant date fair values of long-term equity incentive awards, including forfeiture assumptions and the period over which the Company will recognize compensation expense for such awards. As required by the rules of the SEC, the table below provides the grant date fair values of the performance stock units at the maximum level of payment. However, 175% of the target opportunity of the performance stock units awarded in 2022 was certified by the Compensation Committee and shall vest in 2025. No performance stock units were issued in 2021.
SUMMARY COMPENSATION TABLE FOR 2023
| Name | 2022 ($) | 2023 ($) | | Sean Gamble | 3,812,700 | 6,479,994 | | Melissa Thomas | 1,037,245 | 1,259,992 | | Michael Cavalier | 1,055,277 | 1,259,992 | | Valmir Fernandes | 873,609 | 1,043,993 | | Wanda Gierhart | 811,754 | 971,998 |
SUMMARY COMPENSATION TABLE FOR 2023
(4) The reported amounts are the cash bonuses earned for the respective fiscal years. The cash bonuses earned for a fiscal year are paid in the first quarter of the following year subject to the attainment of performance targets set by the Compensation Committee at the beginning of the covered fiscal year. The cash bonuses for 2021 were paid on March 2, 2022. The cash bonuses for 2022 were paid on March 1, 2023. The cash bonuses for 2023 were paid on February 28, 2024. See Executive Compensation Components–Cash Bonus for a discussion of how cash bonus is set. (5) The compensation reported in this column includes the following:
SUMMARY COMPENSATION TABLE FOR 2023
| Name | Fiscal Year | Annual Matching Contributions to 401(K) Savings Plan and HSA ($) | Life, Group and Disability Insurance Premiums Paid by Company ($) | Dividends Paid on Restricted Stock and Vested RSU(i) ($) | | Sean Gamble | 2023 | 21,050 | 7,701 | 30,251 | | | 2022 | 19,550 | 7,699 | 50,841 | | | 2021 | 18,025 | 6,497 | — | | Melissa Thomas | 2023 | 21,050 | 7,057 | | | | 2022 | 12,794 | 7,074 | — | | | 2021 | — | — | — | | Michael Cavalier | 2022 | 21,050 | 15,621 | 22,403 | | | 2022 | 19,550 | 15,620 | 38,133 | | | 2021 | 18,650 | 13,215 | — | | Valmir Fernandes | 2023 | 19,800 | 18,243 | 18,669 | | | 2022 | 18,300 | 18,274 | 31,776 | | | 2021 | 17,400 | 10,436 | — | | Wanda Gierhart | 2023 | 21,050 | 11,828 | 9,680 | | | 2022 | 19,550 | 11,856 | 16,140 |
SUMMARY COMPENSATION TABLE FOR 2023
(i) Dividends paid on all outstanding restricted stock, and dividends paid on performance stock units at the time of vest of the underlying Common Stock. The performance stock units granted in 2019 vested in February 2023. (6) Effective January 1, 2022, Mr. Gamble was promoted to President and Chief Executive Officer and received a salary increase as a result. Prior to January 1, 2021, Mr. Gamble was our Chief Financial Officer. (7) Ms. Gierhart became a named executive officer after Lee Roy Mitchell’s resignation as Executive Chairman in May 2022; therefore, no information is provided for 2021. See Executive Compensation Components-Base Salary for discussions on how base salary is determined. For a narrative description of the amounts reported in the Summary Compensation Table for 2023, see Principal Elements of 2023 Executive Compensation on page 25 for a discussion of the various elements of compensation, including general description of the formula or criteria to be applied in determining the amounts payable, material terms of the long-term equity incentive awards, Grants of Plan-Based Awards 2023 table on page 34 for details of the equity granted in 2023 and Discussion of the Terms of the Employment Agreements on page 36 for compensation pursuant to the terms of the respective employment agreements.
SUMMARY COMPENSATION TABLE FOR 2023
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GRANTS OF PLAN-BASED AWARDS IN 2023
GRANTS OF PLAN-BASED AWARDS IN 2023 The following table specifies the grants of awards made under our cash bonus and equity incentive plans to the NEOs in 2023.
GRANTS OF PLAN-BASED AWARDS IN 2023
| Name | Grant Date(1) | Approval Date(2) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(3) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(4) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(5) | Grant date FV of Stock Awards ($)(6) | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | Sean Gamble | 2/20/2023 | 2/15/2023 | 675,000 | 1,350,000 | 2,700,000 | 138,699 | 277,397 | 554,794 | | 3,239,997 | | | 2/20/2023 | 2/15/2023 | | | | | | | 184,931 | 2,159,994 | | Melissa Thomas | 2/20/2023 | 2/15/2023 | 270,000 | 540,000 | 810,000 | 26,969 | 53,938 | 107,876 | | 629,996 | | | 2/20/2023 | 2/15/2023 | | | | | | | 35,958 | 419,989 | | Michael Cavalier | 2/20/2023 | 2/15/2023 | 270,000 | 540,000 | 810,000 | 26,969 | 53,938 | 107,876 | | 629,996 | | | 2/20/2023 | 2/15/2023 | | | | | | | 35,958 | 419,989 | | Valmir Fernandes | 2/20/2023 | 2/15/2023 | 261,000 | 522,000 | 783,000 | 22,346 | 44,691 | 89,383 | | 521,991 | | | 2/20/2023 | 2/15/2023 | | | | | | | 29,794 | 347,994 | | Wanda Gierhart | 2/20/2023 | 2/15/2023 | 189,000 | 378,000 | 567,000 | 20,805 | 41,609 | 83,219 | | 485,993 | | | 2/20/2023 | 2/15/2023 | | | | | | | 27,739 | 323,992 | | | 2/20/2023 | 2/15/2023 | | | | | | | 42,808 | 499,997 |
GRANTS OF PLAN-BASED AWARDS IN 2023
(1) The grant date of the long-term incentive awards (2) The dates the Compensation Committee approved the bonus targets and grants of the long-term incentive awards (3) The reported numbers were the estimated future payouts calculated when the Compensation Committee set the target cash bonus percentages in February. See “Short-Term Performance-Based Incentive Awards” on page for a description of the STIP process and the target STIP opportunities of each NEO for 2023 (4) On February 20, 2023, as part of the annual grant cycle, the Compensation Committee awarded Messrs. Gamble, Cavalier and Fernandes and Mses. Thomas and Gierhart an aggregate maximum of 943,148 hypothetical shares of Common Stock as performance stock units. See “Annual Equity Incentive Awards” on page 28 for a discussion of the performance stock units. Holders of performance stock units receive accumulated dividends that are attributable to the underlying Common Stock to the extent such dividend is declared by our Board and the Common Stock is issued at the time of vest. The accumulated dividend is paid at the same rate the dividend is paid to other stockholders. Our Board has currently suspended the payment of dividends. (5) On February 20, 2023, as part of the annual grant cycle, the Compensation Committee awarded Messrs. Gamble, Cavalier and Fernandes and Mses. Thomas and Gierhart an aggregate of 357,188 shares of restricted stock, of which 42,808 shares of restricted stock was a special grant to Wanda Gierhart, which will vest on the third anniversary of the date of grant. See “Annual Equity Incentive Awards” on page 28 for a discussion of the terms of the restricted stock awards. Holders of restricted stock receive non-forfeitable dividends to the extent declared by our Board, at the same rate paid to other stockholders of the Company. Our Board has currently suspended the payment of dividends. (6) For purposes of this table, the aggregate grant date fair values of performance stock units were determined based upon the target level of payment as the most probable outcome and were computed in accordance with FASB ASC Topic 718. The amounts shown exclude the impact of estimated forfeitures. See Note 18 to the Company’s 2023 Annual Report on Form 10-K, for discussion of the assumptions used in determining the grant date fair values of these share awards, including forfeiture assumptions, and the period over which the Company will recognize compensation expense for such awards. For a narrative description of the amounts reported in the Grants of Plan-Based Awards in 2023, see Principal Elements of our 2023 Executive Compensation beginning on page 25 for a discussion of the various elements of compensation, including general description of the formula or criteria to be applied in determining the amounts payable and material terms of the long-term equity incentive awards.
GRANTS OF PLAN-BASED AWARDS IN 2023
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023 The following table lists the restricted stock and performance stock units outstanding for each NEO as of December 31, 2023. There were no stock options outstanding for any NEO as of December 31, 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023
| | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested # | Market Value of Shares or Units of Stock That Have Not Vested (12) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested # | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (12) | | Sean Gamble | 7,285(1) | $102,646 | 277,397(13) | $3,908,524 | | | 14,136(2) | $199,176 | | | | | 28,272(3) | $398,352 | | | | | 11,855(4) | $167,037 | | | | | 58,051(6) | $817,939 | | | | | 22,893(8) | $322,562 | | | | | 228,991(9) | $3,226,483 | | | | | 184,931(10) | $2,605,678 | | | | Melissa Thomas | 72,817(5) | $1,025,992 | 53,938(13) | $759,986 | | | 15,823(6) | $222,946 | | | | | 62,297(9) | $877,765 | | | | | 35,958(10) | $506,648 | | | | Michael Cavalier | 5,251(1) | $73,987 | 53,938(13) | $759,986 | | | 9,906(2) | $139,576 | | | | | 19,812(3) | $279,151 | | | | | 3,375(4) | $47,554 | | | | | 16,098(6) | $226,821 | | | | | 15,752(8) | $221,946 | | | | | 63,380(9) | $893,024 | | | | | 35,958(10) | $506,648 | | | | Valmir Fernandes | 4,376(1) | $61,658 | 44,692(13) | $629,710 | | | 8,321(2) | $117,243 | | | | | 16,378(3) | $230,766 | | | | | 13,326(6) | $187,763 | | | | | 13,125(8) | $184,931 | | | | | 52,469(9) | $739,288 | | | | | 29,794(10) | $419,797 | | | | Wanda Gierhart | 4,257(1) | $59,981 | 41,610(13) | $586,285 | | | 6,426(2) | $90,542 | | | | | 12,851(3) | $181,071 | | | | | 2,136(4) | $30,096 | | | | | 12,383(6) | $174,476 | | | | | 8,844(7) | $124,612 | | | | | 8,513(8) | $119,948 | | | | | 48,754(9) | $686,944 | | | | | 27,239(10) | $383,798 | | | | | 42,808(11) | $603,165 | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023
(1) The number of shares of restricted stock granted on February 19, 2020 that remained outstanding as of December 31, 2023. These shares vest on the fourth anniversary of the grant date. (2) The number of shares of restricted stock granted on February 19, 2021 as part of the annual grant cycle that remained outstanding as of December 31, 2023. These shares vest on the fourth anniversary of the grant date. (3) The number of shares of restricted stock granted on February 19, 2021 as part of the annual grant cycle. These shares vest on the fourth anniversary of the grant date. (4) The number of shares of restricted stock granted on July 28, 2021 to Messrs. Gamble and Cavalier and Ms. Gierhart on July 28, 2021 as part of the executive realignment and salary increases as a result of increased roles that remained outstanding as of December 31, 2023. These shares vest on the fourth anniversary of the grant date. (5) The number of shares of restricted stock awarded on November 8, 2021. These shares granted shall vest 50% on November 8, 2024 and 50% on November 8, 2025. (6) The number of shares of restricted stock granted on February 23, 2022 as part of the annual grant cycle. These shares of restricted stock shall vest ratably over a three-year period. The number of shares of restricted stock granted on February 23, 2022 to Ms. Gierhart as a special grant. These shares of restricted stock shall vest on the second anniversary of the grant date.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023
The number of shares of Common Stock underlying the performance stock units granted on February 19, 2020. In February 2021, as part of the discretion based decisions related to the impact of COVID-19, the Compensation Committee certified the performance of the 2020 performance stock units at target. The numbers reported in the chart above reflect the target amount. The performance stock units will remain subject to the additional two-year service requirement and vested on February 19, 2024. (9) The number of shares of Common Stock underlying the performance stock units granted on February 23, 2022. The reported numbers are based upon the achievement of the maximum performance over the one-year performance period. These performance stock units remain subject to an additional two-year service requirement and will vest on February 23, 2025. (10) The number of shares of restricted stock granted on February 20, 2023 as part of the annual grant cycle. These shares of restricted stock shall vest ratably over a three-year period. (11) The number of shares of restricted stock granted on February 20, 2023 to Ms. Gierhart as a special grant. These shares of restricted stock shall vest on the third anniversary of the grant date. (12) The fair market value was calculated based on the closing price of Common Stock on December 29, 2023 of $14.09 per share. (13) The number of shares of Common Stock underlying the performance stock units granted on February 20, 2023. The reported numbers are based upon the achievement of target level of payment as the most probable outcome and were computed in accordance with FASB ASC Topic 718.
STOCK OPTION EXERCISES AND STOCK VESTED IN 2023
STOCK OPTION EXERCISES AND STOCK VESTED IN 2023 The following table provides information on the vesting of restricted stock and performance stock units during 2023 for each of the NEOs. There were no outstanding stock options for any of the NEOs as of December 31, 2023.
STOCK OPTION EXERCISES AND STOCK VESTED IN 2023
| Name | Number of Shares Acquired on Vesting(1) | Value Realized on Vesting(2) ($) | | Sean Gamble | 71,122 | 879,762 | | Melissa Thomas | 53,409 | 802,608 | | Michael Cavalier | 36,927 | 445,040 | | Valmir Fernandes | 29,911 | 356,622 | | Wanda Gierhart | 21,769 | 264,149 |
STOCK OPTION EXERCISES AND STOCK VESTED IN 2023
(1) The reported numbers include Common Stock from the following vest events: (i) Remaining fifty percent of the restricted stock granted to Messrs. Gamble, Cavalier and Fernandes and Ms. Gierhart in 2019 that vested on February 19, 2023; (ii) Fifty percent of the restricted stock granted in 2021 to Messrs. Gamble, Cavalier and Fernandes and Ms. Gierhart that vested on February 19, 2023; (iii) Shares of Common Stock underlying restricted stock units granted in 2019 to Messrs. Gamble, Cavalier and Fernandes and Ms. Gierhart that vested February 19, 2023; (iv) Restricted stock granted in 2021 to Messrs. Gamble and Cavalier and Ms. Gierhart that vested on July 20, 2023; and (v) Fifty percent of one of the sign-on grants of restricted stock to Ms. Thomas that vested on November 8, 2022. (2) The aggregate dollar amount realized upon vesting was calculated based upon the closing price of our Common Stock on the following dates: (i) February 17, 2023 of $11.68; (ii) February 22, 2023 of $12.77; (iii) July 27, 2023 of $16.09; and (iv) November 7, 2023 of $15.42
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
| Name | Salary ($) (1) | Bonus ($) (2) | Health Insurance ($)(3) | Life and Disability Insurance ($)(3) | Assistance ($)(4) | Value of Equity Awards ($)(5) | Total ($) | | Sean Gamble | 1,800,000 | 3,793,500 | 34,748 | 15,402 | 828 | 7,177,180 | 12,821,658 | | Melissa Thomas | 1,200,000 | 1,557,900 | 34,748 | 14,114 | 828 | 2,058,426 | 4,866,016 | | Michael Cavalier | 1,200,000 | 1,847,138 | 22,882 | 31,242 | 828 | 2,043,359 | 5,145,449 | | Valmir Fernandes | 1,160,000 | 1,862,145 | 32,154 | 36,486 | 828 | 1,670,731 | 4,762,344 |
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
(1) Based on the base salaries in effect as of December 31, 2023, the amounts reported are calculated as two times the base salary for Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas. Subject to Treasury Regulations as specified in the respective employment agreements, the amounts would have been payable according to the Company’s normal payroll practices for a period of 24 months to Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas. (2) For Mr. Gamble and Ms. Thomas, the amounts reported are calculated using the target cash bonus for 2023 plus the cash bonus each would have received for 2023. For Messrs. Cavalier and Fernandes the amounts reported are calculated using the cash bonus received in 2022 plus the cash bonus each would have received for 2023. The reported amounts would have been payable to Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas in a lump sum within 30 days of termination. (3) The amounts reported are calculated as follows: group health and dental insurance programs for a period of 12-24 months for Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas. Life and Disability insurance includes premiums for basic life insurance, long-term disability, individual disability income protection and short-term disability. (4) Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas are entitled to use our office space for a period of three months following the date of termination. The amount reported is based on the use of a 144 square foot office at a rental rate of approximately $23 per square foot per year. (5) The amounts reported have been determined based on the following provisions in the respective employment agreements. Pursuant to the employment agreements of Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas, any outstanding long-term equity incentive awards with time-based vesting provisions would have vested on a pro rata basis. Any long-term equity incentive awards with performance-based vesting provisions would have remained outstanding through the remainder of the applicable performance period and, if or to the extent the performance provisions are attained, shall vest without regard to any continued employment requirement on a pro rata basis.
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
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Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
The pro rata basis for the long-term equity incentive awards is based on the percentage determined by dividing (i) the number of days from and including the grant date of such long-term equity incentive award through the termination date of the NEO’s employment, by (ii) the number of days from the grant date to the full vesting date/end of the applicable performance period, as applicable, of such long-term equity incentive awards. The total number of shares of Common Stock subject to the long-term equity incentive awards that would have vested for each of Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas on December 31, 2023 are as follows:
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
| Name | Number of Shares | | Sean Gamble | 186,645 | | Melissa Thomas | 76,669 | | Michael Cavalier | 59,718 | | Valmir Fernandes | 47,853 |
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
Unvested Performance Stock Units: Unvested Performance Stock Units outstanding, including the 2020 performance stock units that were certified by the Compensation Committee at target, the 2022 performance stock unit awards that were certified at maximum in February 2023 and the 2023 performance stock unit awards assuming maximum level payout.
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
| Name | Number of Shares | | Sean Gamble | 322,736 | | Melissa Thomas | 69,422 | | Michael Cavalier | 85,304 | | Valmir Fernandes | 70,723 |
Potential Payments upon Termination by us Without Cause or by Executive for Good Reason
Equity award values were calculated using the closing price of Common Stock on December 29, 2023 of $14.09 per share.
Potential Payments upon Termination for Cause
Potential Payments upon Termination for Cause If a NEO terminates his employment voluntarily, or is terminated for cause, we are only required to pay any accrued unpaid base salary through the date of such termination.
Potential Payments upon Termination due to Change in Control
Potential Payments upon Termination due to Change in Control
Potential Payments upon Termination due to Change in Control
| Name | Salary ($)(1) | Bonus ($)(2) | Health Insurance ($)(3) | Life and Disability Insurance ($)(3) | Assistance ($)(4) | Value of Equity Awards ($)(5) | Total ($) | | Sean Gamble | 1,800,000 | 4,468,500 | 43,435 | 19,253 | 828 | 15,656,921 | 21,988,937 | | Melissa Thomas | 1,200,000 | 1,827,900 | 43,435 | 17,643 | 828 | 4,153,323 | 7,243,129 | | Michael Cavalier | 1,200,000 | 2,261,757 | 28,603 | 39,053 | 828 | 3,908,679 | 7,438,920 | | Valmir Fernandes | 1,160,000 | 2,281,658 | 40,193 | 45,608 | 828 | 3,200,853 | 6,729,140 |
Potential Payments upon Termination due to Change in Control
(1) The amounts reported are calculated as follows: two times the base salary in effect as of December 31, 2023 payable in a lump sum within 30 days of such termination. (2) The amounts reported for Mr. Gamble and Ms. Thomas is equal to the amount each would have received for 2023 and one and a half times the 2023 bonus target. The amounts reported for Messrs. Cavalier and Fernandes are equal to the amount each would have received for 2023 and one and a half times the bonus for 2022. In each case the amounts would be payable in a lump sum within 30 days of such termination. (3) The amounts reported are calculated as follows: group health and dental insurance programs for a period of 30 months. Disability insurance includes premiums for long-term disability, individual disability income protection and short-term disability. (4) Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas are entitled to use our office space for a period of three months following the date of termination. The reported amount is based on the use of a 144 square foot office at a rental rate of approximately $23 per square foot per year. (5) The amounts reported have been determined based on the following provision in the respective employment agreements: upon termination due to change in control, any outstanding equity award granted to the NEO shall be fully vested and all restrictions shall lapse. Pursuant to the above, the total number of shares of Common Stock subject to the long-term equity incentive awards that would have vested for each of Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas upon termination due to a change in control on December 31, 2023 are as follows:
Potential Payments upon Termination due to Change in Control
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Potential Payments upon Termination due to Change in Control
| Name | Number of Shares | | Sean Gamble | 304,530 | | Melissa Thomas | 124,598 | | Michael Cavalier | 90,400 | | Valmir Fernandes | 72,195 |
Potential Payments upon Termination due to Change in Control
Unvested Performance Stock Units: Unvested Performance Stock Units outstanding, including the 2020 performance stock units that were certified by the Compensation Committee at target, the 2022 performance stock units that were certified by the Compensation Committee at maximum in February 2023 and the 2023 performance stock units assuming maximum level payout.
Potential Payments upon Termination due to Change in Control
| Name | Number of Shares | | Sean Gamble | 806,678 | | Melissa Thomas | 170,173 | | Michael Cavalier | 187,008 | | Valmir Fernandes | 154,977 |
Potential Payments upon Termination due to Change in Control
Long-term equity incentive award values were calculated using the closing price of our Common Stock on December 29, 2023 of $14.09 per share.
Potential Payments upon Termination due to Death or Disability
Potential Payments upon Termination due to Death or Disability
Potential Payments upon Termination due to Death or Disability
| Name | Salary($)(1) | Bonus ($)(2) | Health Insurance ($)(3) | Life and Disability Insurance ($)(3) | Assistance ($)(4) | Value of Equity Awards ($)(5) | Total ($) | | Sean Gamble | 900,000 | 2,443,500 | 17,374 | 7,701 | 828 | 7,177,180 | 10,546,583 | | Melissa Thomas | 600,000 | 1,017,900 | 17,374 | 7,057 | 828 | 2,058,426 | 3,701,585 | | Michael Cavalier | 600,000 | 1,017,900 | 11,441 | 15,621 | 828 | 2,043,359 | 3,689,149 | | Valmir Fernandes | 580,000 | 1,023,120 | 16,077 | 18,243 | 828 | 1,670,731 | 3,308,999 |
Potential Payments upon Termination due to Death or Disability
(1) The amounts reported are the base salary of each named executive officer in effect as of December 31, 2023, payable in a lump sum. (2) The amounts reported are the cash bonus each NEO would receive for 2023 payable in a lump sum at the same time as the cash bonus payments are made to other similarly situated active executives. (3) The amounts reported are calculated as follows: group health and dental insurance programs for a period of 12 months. Disability insurance includes premiums for long-term disability, individual disability income protection and short-term disability. (4) Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas are entitled to use our office space for a period of three months following the date of termination. The reported amount is based on the use of a 144 square foot office at a rental rate of approximately $23 per square foot per year. (5) The amounts reported have been determined based on the following provision in the respective employment agreements: any outstanding long-term equity incentive awards shall vest on a pro rata basis. Any long-term equity incentive awards with performance-based vesting provisions shall remain outstanding through the remainder of the applicable performance period and, if or to the extent the performance provisions are attained, shall vest without regard to any continued employment requirement on a pro-rata basis. The pro rata basis for the long-term equity incentive awards is based on the percentage determined by dividing (i) the number of days from and including the grant date of such equity award through the termination date of the NEO’s employment, by (ii) the number of days from the grant date to the full vesting date/end of the applicable performance period, as applicable, of such long-term equity incentive awards. The participant or the participant’s estate or representative shall be entitled to receive any previously vested long-term equity incentive awards. Pursuant to the above, the total number of shares of Common Stock subject to the long-term equity incentive awards that would have vested upon death or disability of each of Messrs. Gamble, Cavalier and Fernandes and Ms. Thomas would have been as follows:
Potential Payments upon Termination due to Death or Disability
| Name | Number of Shares | | Sean Gamble | 186,645 | | Melissa Thomas | 76,669 | | Michael Cavalier | 59,718 | | Valmir Fernandes | 47,853 |
Potential Payments upon Termination due to Death or Disability
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Potential Payments upon Termination due to Death or Disability
Unvested Performance Stock Units outstanding including the 2020 performance stock units that were certified by the Compensation Committee at target, the 2022 performance stock units which were certified at the maximum in February 2023 and the 2023 performance stock units assuming maximum payout.
Potential Payments upon Termination due to Death or Disability
| Name | Number of Shares | | Sean Gamble | 322,736 | | Melissa Thomas | 69,422 | | Michael Cavalier | 85,304 | | Valmir Fernandes | 70,723 |
Potential Payments upon Termination due to Death or Disability
The values of the long-term equity incentive awards have been calculated using the closing price of our Common Stock on December 29, 2023 of $14.09 per share.
CEO PAY RATIO FOR 2023
CEO PAY RATIO FOR 2023 As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of SEC Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median-compensated employee and the annual total compensation of our CEO. As a leader and one of the most geographically diverse operators in the motion picture exhibition industry, we operated 501 theaters and 5,719 screens in the U.S. and Latin America as of December 31, 2023, and our employee population consisted of approximately 67% part-time employees, many of whom were compensated on an hourly basis. For 2023, we used the same median employee, a theater team member who was paid hourly and employed on a part-time basis, that was identified in 2022 because there were no changes in our employee population or employee compensation that we reasonably believe would result in a significant change in the pay ratio disclosure. The annual total compensation of our 2022 median-compensated employee was $10,152, and the annual total compensation of Sean Gamble our President and CEO during 2023, as reported in the Summary Compensation Table presented elsewhere in this proxy statement, was $8,802,493. Based on this information, the ratio of the total compensation of Mr. Gamble, to the annual total compensation of our median-compensated employee was 867 to 1. To identify our median employee in 2022, as well as to determine the annual total compensation of the “median employee” for this purpose, the methodology and the material assumptions, adjustments, and estimates that we used were as follows: ▪ As permitted by Instruction 2 to Item 402(u) of Regulation S-K, we determined our median employee based on our employee population as of October 1, 2022 (the “Determination Date”). ▪ Under the de minimis exception of the pay ratio rule, we excluded the employee populations of certain jurisdictions comprising approximately 5% or less of our total employees. The jurisdictions and approximate number of employees excluded were Bolivia (109), Costa Rica (214), Curacao (30), Guatemala (61), Nicaragua (32), and Peru (647). As of October 1, 2022, we had 19,569 employees, comprised of 13,088 U.S. employees and 6,481 non-U.S. employees. ▪ To identify the median employee from our employee population, we used total compensation including wages, bonuses and benefits reflected in our payroll records, which we believe is a reasonable method of identifying the median employee. The substantial majority of our employees do not participate in our long-term incentive program, therefore we believe that excluding that program from consideration does not meaningfully impact the identification of the median employee. ▪ In making these determinations, we annualized the compensation for employees who were on our payroll as of the Determination Date but were salaried new hires and salaried employees who were on a leave of absence by taking an employee’s compensation for the number of bi-weekly pay periods for which they were actively employed and annualizing such amount for the full year of 26 pay periods. Except for the annualization as described, we did not make any assumptions, adjustments, or estimates with respect to total cash compensation. This pay ratio is a reasonable estimate calculated in a manner consistent with the applicable rules. The rules allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.
Pay Versus Performance Table
Pay Versus Performance Table The following is disclosure pursuant to the SEC's pay versus performance rules ("PVP Rules"). The PVP Rules create a new definition of pay referred to as Compensation Actually Paid ("CAP"), which is compared to certain performance measures as defined by the SEC. The amounts set forth below in the required table are calculated pursuant to SEC rules but do not represent amounts that have actually been earned or realized by our NEOs. Performance conditions for some of these awards have not yet been satisfied. The Compensation Committee does not utilize CAP as the basis for making compensation decisions. For a more detailed discussion on our compensation philosophy, please refer to Compensation Discussion and Analysis beginning on page 23.
Pay Versus Performance Table
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Pay Versus Performance Table
| Pay Versus Performance Table | | | | | | | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | SCT Total for CEO ($)(1) | CAP to CEO ($)(2) | Average SCT Total for Non- CEO NEOs ($)(3) | Average CAP to Non-CEO NEOs ($)(2) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(5) | Net Income ($) | Adjusted EBITDA (in millions) ($)(6) | | 2023 | 8,802,493 | 12,197,702 | 2,636,775 | 3,544,836 | 42.28 | 154.34 | 188,200,000 | 594.1 | | 2022 | 5,954,650 | 3,332,400 | 2,304,413 | 1,249,438 | 25.98 | 124.11 | (271,200,000) | 336.5 | | 2021 | 7,753,272 | 6,762,279 | 2,767,255 | 1,630,054 | 48.36 | 152.43 | (422,800,000) | 80.0 | | 2020 | 6,915,289 | 1,877,986 | 1,883,730 | 946,890 | 52.24 | 118.35 | (616,800,000) | (276.9) |
Pay Versus Performance Table
For 2022 and 2023, our CEO was Sean Gamble. For 2021 and 2020, our CEO was Mark Zoradi. (2) The table below sets forth the adjustments to Total Compensation as reported in the Summary Compensation Tables used in calculating the Compensation Actually Paid for each applicable year. Fair value, or changes in fair value, of equity awards was determined by reference to prices on applicable year-end dates or the actual vesting dates. For 2021, all of the outstanding unvested equity awards for Mark Zoradi vested at the end of the term of his employment agreement in December 2021.
Pay Versus Performance Table
| | CEO | | | | Average for Non-CEO NEOs | | | | | | 2023 | 2022 | 2021 | 2020 | 2023 | 2022 | 2021 | 2020 | | SCT Total | $8,802,493 | $5,954,650 | $7,753,272 | $6,915,289 | $2,636,775 | $2,304,413 | $2,767,255 | $1,883,730 | | Less, value of Stock Awards reported in SCT | $5,399,991 | $3,628,435 | $4,571,726 | $5,857,524 | $1,069,987 | $936,305 | $2,057,955 | $1,301,064 | | Plus, year-end fair value of current year Equity Awards | $6,514,202 | $1,887,222 | $3,650,260 | $4,079,720 | $1,290,763 | $486,991 | $1,016,649 | $1,076,099 | | Plus, year-over-year change in fair value of oustanding unvested Equity Awards | $2,017,153 | ($944,003) | — | ($2,167,088) | $527,645 | ($590,280) | ($59,102) | ($451,356) | | Plus, year-over-year change in fair value of Equity Awards granted in prior year that vested in the year | $263,845 | $62,966 | ($69,527) | ($1,092,411) | $159,640 | ($15,381) | ($36,793) | ($260,519) | | Compensation actually paid | $12,197,702 | $3,332,400 | $6,762,279 | $1,877,986 | $3,544,836 | $1,249,438 | $1,630,054 | $946,890 |
Pay Versus Performance Table
(3) For 2022 and 2023, our Non-CEO NEOs included Melissa Thomas, Executive Vice President – Chief Financial Officer; Michael Cavalier, Executive Vice President – General Counsel; Valmir Fernandes, President – Cinemark International; and Wanda Gierhart, Chief Marketing and Content Officer. For 2021 and 2020 our Non-CEO NEOs included Lee Roy Mitchell, Executive Chairman of the Board; Sean Gamble, Executive Vice President – Chief Financial Officer and Chief Operating Officer; Michael Cavalier, Executive Vice President – General Counsel; and Valmir Fernandes, President – Cinemark International. (5) For the fiscal years ended 2020, 2021, 2022 and 2023, the peer group TSR includes the S&P 500 Index, AMC Entertainment Holdings, Inc. and IMAX Corporation, two other publicly held companies in our industry with whom we compete for investor capital. The amounts shown set forth the total shareholder return assuming reinvestment of dividends during the 4-year period ended 12/31/23, 12/31/22, 12/31/21 and 12/31/20, respectively, weighted based upon the S&P Index and AMC and IMAX’s stock market capitalization at the beginning of each period for which a return is indicated. (6) Adjusted EBITDA is a non-GAAP measure used by management and our board of directors to assess our financial performance and enterprise value. Adjusted EBITDA is considered a key performance in our industry. Annex A sets forth our reconciliation of Adjusted EBITDA (in millions).