Despite a slight pop higher today, investors in AMC Entertainment (NYSE:AMC) still have a reason to pout. A Report out of the Kansas City Business Journal highlights the area’s highest-paid public company executives. AMC CEO Adam Aron tops the list despite some rather dismal performance with AMC stock this year.
It should be noted that this report is from 2020 and includes salary, bonus and stock options to calculate these numbers. Aron’s 2020 total compensation of nearly $21 million may seem high. However, it’s also worth pointing out that plenty of CEOs make much more than that, with nine of the top 10 highest-paid CEOs in America pulling in more than $100 million last year.
That said, it’s true that the AMC community has grown weary of hearing stories about elevated executive pay when AMC’s stock price continues to languish. Plenty of meme investors continue to post conspiracy theories about the company’s management team, apparently looking for a scapegoat to pin down for this mess.
Let’s dive into what to make of this report and investors’ anger right now.
CEO Gets Paid — Investors in AMC Stock, Not So Much
The meme stock mania that took hold with AMC in recent years really was something to behold. No matter the fundamentals, economic backdrop, or the massive hedge funds and institutional investors betting against the stock, it just kept going up. More and more retail investors piled into AMC stock in a bid to save the theater chain from pandemic-induced disaster.
Retail investors succeeded insofar as AMC still exists as an ongoing concern today. And while the company’s CEO, Adam Aron, received much of the praise for stoking the fires lit by retail investors (and selling stock into the ridiculous rally), one might also suggest that he was simply at the right place at the right time. Thus, the CEO’s executive pay package, while seemingly reasonable at the time, now looks much less favorable to shareholders.
Today’s perspective is much different than last year’s perspective or that of two years ago. The company is flailing, now worth around $1.25 billion at the time of writing. At AMC’s height, the theater chain was worth as much as $20 billion. There are structural issues with the company’s core business, whether investors want to recognize these issues or not. And while this stock is certainly cheap from a relative valuation perspective, until the company can put forward impressive cash flow growth numbers, this is one that investors will likely continue to be agitated with.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
