UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN THE PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

☐	Preliminary Proxy Statement

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒	Definitive Proxy Statement

☐	Definitive Additional Materials

☐	Soliciting Material Pursuant to §240.14a-12.

Cinemark Holdings, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒	No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1)	Title of each class of securities to which transaction applies:

 

(2)	Aggregate number of securities to which transaction applies:

 

(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

(4)	Proposed maximum aggregate value of transaction:

 

(5)	Total fee paid:

 

☐	Fee paid previously with preliminary materials.

 

☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

(2)

Form, Schedule or Registration Statement No.:

 

(3)

Filing Party:

 

(4)

Date Filed:

LETTER FROM OUR CEO

 

		Dear Fellow Stockholders:   We welcome you to join us at our 2020 annual meeting of stockholders (Annual Meeting) to be held at our West Plano Theatre located at 3800 Dallas Parkway, Plano, TX 75093 on May 21, 2020 at 9:00 a.m. CDT. I do want to alert you that, given the coronavirus (COVID-19) pandemic, we may decide to hold a virtual-only Annual Meeting. The Notice of 2020 Annual Meeting and Proxy Statement, following this letter, provides more information regarding a possible virtual-only meeting and the business we will conduct at the Annual Meeting.   I would be remiss if I did not first mention the social and economic effects of COVID-19, which are widespread and hard-hitting. Everyone continues to battle through this uncertainty, including Cinemark. During this unprecedented time, all Cinemark theatres are closed in accordance with governmental regulations to ensure the health and safety of our guests, employees and communities. As such, we are taking prudent steps to withstand the economic
impact of our temporary closures during this pandemic. Our priority as we navigate this uncharted territory is to ensure that Cinemark will be able to open its theatres and employ our global team members when this pandemic subsides. We look forward to once again welcoming moviegoers to experience the magic of cinematic storytelling on our big screens.

With that aside, we believe that our key strength and a fundamental measure of our success is the value we create over the long-term. This value is a direct result of our ability to extend and solidify our market leadership position through disciplined execution of our strategic plan of creating an extraordinary in-theatre guest experience, expanding guest-engagement and growing our circuit organically and synergistically. I take this opportunity to highlight some of our successes in 2019 as a reminder that we have built a strong foundation which will enable us to continue to build in the future.

In the spirit of long-term success, in 2019, we achieved our fifth consecutive year of record worldwide revenues and our domestic box office again outperformed the North American industry box office for the fifth year in a row, exceeding the domestic industry box office for 10 out of the past 11 years. Additionally, we delivered 52 consecutive quarters of domestic food and beverage per cap growth and an all-time high domestic per cap. The past year’s success is the product of the dedication of talented, hard-working team members and I take immense pride in being part of this team. We are continually investing in the development of our talent pool and engaging all team members in the success of our Company and in serving the interests of our stockholders.

Our Board provides active oversight of our long-term strategic goals. The Board has an ongoing commitment to create a balanced and effective Board with diverse viewpoints and deep industry related experience that can guide management as we navigate and respond to industry changes and challenges that we face in the wake of the COVID-19 pandemic.

Thank you for your continued support, trust and investment in Cinemark. We look forward to seeing you at our Annual Meeting.

YOUR VOTE IS VERY IMPORTANT TO US. Whether or not you plan to attend the Annual Meeting, I urge you to please cast your vote as soon as possible via the Internet, telephone or mail.

Sincerely,

Mark Zoradi

Chief Executive Officer

CINEMARK HOLDINGS, INC.

3900 Dallas Parkway, Suite 500

Plano, Texas 75093

NOTICE OF 2020 ANNUAL MEETING AND PROXY STATEMENT

April 10, 2020

Dear Stockholders:

Notice is hereby given that the Annual Meeting of the Company will be held on May 21, 2020 at 9:00 a.m. CDT at our West Plano Theatre located at 3800 Dallas Parkway, Plano, TX 75093, for the following purposes:

 

1.

To elect four Class I directors to serve for three years on our Board;

 

2.

To ratify the appointment of Deloitte and Touche as our independent registered public accounting firm for 2020;

 

3.

To hold the annual, non-binding, advisory vote on our executive compensation program; and

 

4.

To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

Only stockholders of record at the close of business on March 26, 2020, set as the Record Date, will be entitled to notice of, and to vote at, the Annual Meeting.

We intend to hold our Annual Meeting in person. However, we are actively monitoring the COVID-19 pandemic and may choose to hold a virtual-only Annual Meeting should it be deemed necessary for public health or if recommended by public health officials. Stockholders will be afforded the same rights and opportunities to participate in a virtual-only Annual Meeting as they would at an in-person meeting. In the event we determine to hold a virtual-only Annual Meeting, we will announce the change in advance and provide instructions on how stockholders can participate at https://ir.cinemark.com/. We encourage you to check this website prior to the meeting if you plan to attend.

BY ORDER OF THE BOARD OF

DIRECTORS,

 

Michael Cavalier

Executive Vice President — General Counsel and Secretary

YOUR VOTE IS IMPORTANT TO US. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented. Therefore, we urge you to promptly vote and submit your proxy in advance of the Annual Meeting. You can vote your shares via the Internet, by telephone, or by signing, dating, and returning the proxy card or voting instruction form. To vote via the Internet or telephone, follow the instructions included in the proxy card or the voting instruction form. You can revoke a proxy at any time prior to its exercise at the Annual Meeting by following the instructions in the proxy statement.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting.

The proxy statement and the 2019 Form 10-K are available at

http://materials.proxyvote.com/17243V

TABLE OF CONTENTS

 

LETTER FROM OUR CEO
NOTICE OF 2020 ANNUAL MEETING AND PROXY STATEMENT
PROXY STATEMENT SUMMARY			1
GENERAL INFORMATION			9
SOLICITATION OF PROXIES			9
SHARES OUTSTANDING AND VOTING RIGHTS			9
ITEM ONE — ELECTION OF DIRECTORS			9
BOARD COMPOSITION			9
ANNUAL MEETING SLATE			9
CORPORATE GOVERNANCE			15
BOARD LEADERSHIP STRUCTURE			15
DIRECTOR INDEPENDENCE			15
DIRECTOR QUALIFICATIONS AND BOARD DIVERSITY			16
NOMINATIONS FOR ELECTION TO THE BOARD			17
BOARD’S ROLE IN RISK OVERSIGHT			18
MEETING ATTENDANCE			19
EXECUTIVE SESSIONS			19
STOCKHOLDER COMMUNICATIONS WITH THE BOARD			19
CORPORATE GOVERNANCE POLICIES AND CHARTERS			20
CODE OF BUSINESS CONDUCT AND ETHICS			20
BOARD COMMITTEES			20
DIRECTOR COMPENSATION			24
ITEM TWO — RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020			25
ITEM THREE — ANNUAL ADVISORY VOTE ON EXECUTIVE COMPENSATION			25
COMPENSATION DISCUSSION AND ANALYSIS			25
TABLE OF CONTENTS			25
OUR NEOS			26
EXECUTIVE SUMMARY			26
2019 SAY-ON-PAY RESULTS			26
OUR COMPENSATION PHILOSOPHY			27
OUR 2019 PERFORMANCE			28
EXECUTIVE COMPENSATION COMPONENTS			31
2019 COMPENSATION MIX			38
EXECUTIVE COMPENSATION PROCESS: ROLES			39
EXECUTIVE COMPENSATION PROCESS: PEER GROUP REVIEW			40

COMPENSATION RISK ASSESSMENT			40
COMPENSATION COMMITTEE REPORT			41
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS			41
SUMMARY COMPENSATION TABLE FOR 2019			42
CEO PAY RATIO FOR 2019			43
GRANTS OF PLAN-BASED AWARDS IN 2019			44
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2019			45
STOCK OPTION EXERCISES AND STOCK VESTED IN 2019			46
DISCUSSION OF THE TERMS OF THE EMPLOYMENT AGREEMENTS WITH OUR NEOS			47
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			54
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			55
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			57
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING			59
DEADLINE FOR STOCKHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING			63
ADDITIONAL INFORMATION			64
STOCKHOLDERS SHARING A COMMON ADDRESS			64
INCORPORATION BY REFERENCE			64
OTHER MATTERS			64
AVAILABILITY OF REPORT ON FORM 10-K			64
QUESTIONS			64

 

GENERAL INFORMATION

 

SOLICITATION OF PROXIES

The Board is soliciting proxies in connection with the Annual Meeting (and any adjournment thereof) to be held on May 21, 2020 at 9 a.m. CDT at the Company’s West Plano Theatre located at 3800 Dallas Parkway, Plano, TX 75093. The approximate date on which this proxy statement and the enclosed proxy are first being sent to stockholders is April 10, 2020.

SHARES OUTSTANDING AND VOTING RIGHTS

As of the Record Date, 117,526,711 shares of common stock, par value $0.001 per share of the Company (Common Stock) were outstanding. The Common Stock constitutes the only class of voting securities of the Company. Only stockholders of record as of the Record Date are entitled to receive notice of, and to vote at, the Annual Meeting. Holders of Common Stock are entitled to one vote for each share so held.

 

 

ITEM ONE — ELECTION OF DIRECTORS

BOARD COMPOSITION

Our Board is currently comprised of 10 members. The size of the Board may be fixed from time to time exclusively by our Board as provided in our Certificate of Incorporation. Our Certificate of Incorporation also provides that 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 terms of office of each class ending in successive years.

ANNUAL MEETING SLATE

The terms of the current Class I directors, Mmes. Loewe and Vaca and Messrs. Rosenberg and Senior 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 election at the Annual Meeting.

Each of Mmes. Loewe and Vaca and Messrs. Rosenberg and Senior has consented to be nominated for re-election to the Board as a Class I director. If elected, they will serve on the Board for a three-year term expiring on the date of our 2023 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 unavailable or unwilling to serve before the Annual Meeting, your proxy card authorizes us to vote for a replacement nominee if the Board names one.

Set forth below are each nominee’s name, age as of our Annual Meeting date, principal occupation, business experience, and director positions held during the past five years. We also discuss the qualifications, attributes, and skills that led our Board to nominate each for election as a Cinemark director. The Governance Committee and the Board believe that the qualifications, skills, experience and attributes of the nominees support the conclusion that these individuals are qualified to continue to serve on the Board and they collectively possess a variety of skills, professional experience, and diversity of backgrounds allowing them to effectively oversee the Company’s business.

 

 

			9

Nominees for Class I Directors

Term Expiring 2023

 

Nancy Loewe

 

Steven P. Rosenberg

 

 

			10

Enrique F. Senior

 

Nina G. Vaca (Ximena Humrichouse)

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR ELECTION OF EACH CLASS I NOMINEE

 

 

			11

Continuing Class II Directors

Term Expiring 2021

 

Darcy Antonellis

 

Carlos M. Sepulveda

 

 

			12

Mark Zoradi

Continuing Class III Directors

Term Expiring 2022

 

Benjamin D. Chereskin

 

 

			13

Lee Roy Mitchell

 

Raymond W. Syufy

 

 

			14

CORPORATE GOVERNANCE

Cinemark is committed to applying sound corporate governance and leadership principles and practices. The Board has adopted a number of policies to support the Company’s values and good corporate governance, which are important to the success of the Company’s business, in advancing stockholder interests and for effective Board oversight of management. Some of the key Board governance features are as follows:

 

		Our non-employee directors receive annual equity grants of restricted shares valued at $115,000. Our directors are also bound by robust stock ownership requirements and are prohibited from hedging or pledging Company stock.     The majority of our Board members are independent according to NYSE listing standards. Our lead independent director regularly conducts executive sessions with independent and non-employee Board members at Board meetings. Additionally, our Chairman and CEO are separate, which also ensures independent oversight of management.     Our Board and standing committees conduct annual self-assessments. They provide feedback to the Governance Committee on Board effectiveness, culture, process and areas of improvement.

BOARD LEADERSHIP STRUCTURE

We believe that a key factor in a company’s performance is a leadership structure that provides a balance between independent oversight by an engaged Board and day-to-day operations by management to implement the Company’s strategic vision. To achieve this balance, we have split the roles of the Chairman of the Board and the CEO such that the Board is separated from the day-to-day operations of the Company.

In addition to the separation of the positions of the Chairman of the Board and the CEO, the Board has a Lead Independent director, which role provides leadership and an organizational structure to the non-management directors. The position of the Lead Independent director has the following significant authority and responsibilities under our Corporate Governance Guidelines to:

 

●

act as a liaison between the non-management directors and the Company’s management;

●

call meetings of non-management directors;

●

chair the executive sessions of non-management directors;

●

chair Board meetings when the Chairman is not present;

●

consult with the Chairman and the CEO and approve the schedules, agendas and information provided to the Board for each meeting; and

●

be available for consultation and communication with stockholders upon request.

DIRECTOR INDEPENDENCE

We comply with the independence requirements of the New York Stock Exchange (NYSE) listing standards. In early 2019, our Board, in coordination with our Governance Committee, and assistance of the Company’s legal counsel, evaluated the relevant relationships between each director (and his or her

 

 

			15

immediate family members and affiliates). On the basis of this review, the Board has affirmatively determined, in its business judgment, that (a) the majority of the Board was, and continues to be, independent, (b) each of Mmes. Antonellis, Loewe and Vaca and Messrs. Chereskin, Rosenberg, Senior and Sepulveda are independent, (c) Messrs. Mitchell and Syufy are not independent due to their transactions with the Company exceeding $120,000 annually, (d) Messrs. Mitchell and Zoradi are not independent because they are employees of the Company, (e) each of Mmes. Antonellis and Loewe and Messrs. Rosenberg and Sepulveda meet all applicable requirements for membership in the Audit Committee, (f) Mr. Sepulveda is an “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC and satisfies the NYSE’s financial experience requirements, and (g) each of Ms. Vaca and Messrs. Chereskin and Sepulveda meet all applicable requirements for membership in the Compensation Committee.

The Board and the Governance Committee considered the transactions reported under the Certain Relationships and Related Party Transactions on page 57 and followed the NYSE bright-line tests to determine independence:

 

1.

is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer of the Company;

2.

has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company (other than director and committee fees and pension or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service);

3.

(a) is a current partner or employee that is the Company’s internal or external auditor; (b) has an immediate family member who is a current partner of such a firm; (c) has an immediate family member who is a current employee of such firm and personally works on the Company’s audit; or (d) is or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time;

4.

is, or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or has served on that company’s compensation committee; or

5.

is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.

DIRECTOR QUALIFICATIONS AND BOARD DIVERSITY

Our Corporate Governance Guidelines contain Board membership criteria principally as broad tenets, rather than as specific weighted criteria. To carry out its responsibilities and set the appropriate tone at the top, our Board is keenly focused on its leadership structure and character, integrity, and qualifications of its members. Our directors have a proven record of accomplishment and an ability to exercise sound and independent judgment in a collegial manner.

Our Board does not have a formal diversity policy. It broadly construes diversity to mean diversity of backgrounds, experience, qualifications, skills, age and expertise, among other factors, which when taken

 

 

			16

		Core Director Attributes
		High personal and professional ethics and integrity
		Strong business judgment
		Experience beneficial to the Company
		Proven leadership and management skills
		Broad training and experience at the policy- making level
		Dedicated—able to devote necessary time to oversight duties and represent stockholders’ interests
		Commitment to serve for a period of several years to develop knowledge about the Company

together best serve our Company and our stockholders. In selecting board members, the Board takes into account, in addition to the core attributes, the range of talents, experience and expertise that are needed and would complement those that are currently represented on the Board. The Board seeks to achieve a mix of members whose experience and backgrounds are relevant to the Company’s strategic priorities and the scope and complexity of our business. Our directors complement each other in their mix of skills by bringing to the Board expertise and experience on the entertainment industry, capital markets, financial management, real estate, cybersecurity, technology, strategic planning and corporate governance. Additionally, in selecting Board members, our Governance Committee follows applicable regulations to ensure that our Board includes members who are independent, possess financial literacy and expertise, an understanding of risk management principles, policies, and practices, and can appropriately oversee and guide management.

The following chart summarizes the core competencies of each director.

 

Skill/Experience Matrix

Experience

Director

Financial Literacy

✓

✓

✓

✓

✓

✓

✓

✓

Financial Management/Corporate Finance

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Accounting and Financial Oversight/Enterprise Risk Management

✓

✓

✓

✓

✓

Corporate Governance

✓

✓

✓

✓

✓

Independence

✓

✓

✓

✓

✓

✓

✓

CEO Experience

✓

✓

✓

✓

✓

✓

Non-CEO Executive Experience

✓

✓

✓

✓

Industry Knowledge

✓

✓

✓

✓

✓

Mergers and Acquisitions

✓

✓

✓

Other Public Company Board Service

✓

✓

✓

✓

✓

Leadership

✓

✓

✓

✓

✓

✓

✓

✓

Strategic Vision and Planning

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Information Technology and Cybersecurity

✓

✓

NOMINATIONS FOR ELECTION TO THE BOARD

Our Governance Committee is responsible for identifying and recommending director candidates to our Board for nomination. This is an ongoing process through which the Board has added three new directors – Mmes. Vaca, Antonellis and Loewe - since 2014. These directors have not only added to the Board’s portfolio of skills in finance, accounting and leadership experience but have also supplemented the experience in the information technology and cybersecurity areas.

 

 

			17

Although the Board retains ultimate responsibility for approving candidates for election, the Governance Committee conducts the initial screening and evaluation. The Governance Committee has not established any minimum qualifications that must be met by a director candidate or identified any set of specific qualities or skills that it deems to be mandatory. Based on the director qualifications discussed previously, the Governance Committee ensures to maintain a mix of different viewpoints such that the Company benefits from the fresh perspectives brought by new directors and the institutional knowledge and industry insights of directors having longer experience on our Board. The Governance Committee’s policy regarding consideration of potential director nominees acknowledges that choosing a director is dependent upon a number of subjective and objective criteria many of which are difficult to categorize.

The Governance Committee considers candidates recommended by current directors, management, third party search firms engaged by the Governance Committee, and stockholders. Under the director nomination agreement which we entered into on April 9, 2007 with certain of our then current stockholders (Director Nomination Agreement), currently only the Mitchell Investors (as defined in the Director Nomination Agreement) have a right to designate two nominees to the Board. All candidates, including candidates recommended by stockholders, are evaluated on the basis of the same criteria. Stockholders who wish to recommend a candidate to the Governance Committee or submit nominees for election at the 2021 annual meeting should follow the instructions on page 63.

BOARD’S ROLE IN RISK OVERSIGHT

Our business exposes us to multiple risks, among others - strategic, credit, market, regulatory and operational risks. As an integral part of its oversight function, the Board oversees the material risks facing the Company. However, while it recognizes the importance of an effective risk oversight to the fulfillment of its fiduciary duties to our stockholders, it believes thoughtful risk taking is a critical component of innovation and effective leadership. It also recognizes that imprudently accepting risk or failing to appropriately identify and mitigate risks could negatively impact our business and stockholder value. The Board, therefore, seeks to foster a risk-aware culture by encouraging thoughtful risk taking in pursuit of the Company’s objectives.

The Board exercises this oversight both directly and indirectly through its three standing committees – Audit, Governance and Compensation committees, as well as through two additional committees – Strategic Long-Range Planning and New Ventures committees. Each committee is delegated responsibility for specific risks. See Section on Board Committees below for detailed discussion on each of the standing committees. As regards the additional committees, the Strategic Long- Range Planning Committee assists management in the analysis of alternative strategic options and reviews with management key industry and market issues and external developments impacting the Company and the New Ventures Committee monitors the strategic direction of the Company. It evaluates new development programs or business growth and diversification opportunities within established strategic plan targets and applicable regulatory boundaries.

The risk oversight responsibility of the Board and its committees is supported by our management reporting processes, which are designed to provide visibility to the Board to management’s identification, assessment and mitigation strategies for critical risks. Our risk management process is designed to provide comprehensive, integrated oversight and management of risk, as well as to facilitate transparent identification and reporting of key business issues to senior management, appropriate Board committees and the Board as a whole. Our risk governance structure is as follows:

 

 

			18

 

MEETING ATTENDANCE

During 2019, the Board held four (4) meetings and took action by written consent on two (2) occasions. All directors attended at least seventy-five percent (75%) of all meetings held by the Board and all meetings held by committees of the Board on which such director served.

All directors are strongly encouraged to attend the Annual Meeting, but we do not have a formal attendance requirement. All directors, except Mr. Syufy, attended the annual meeting held in May 2019.

EXECUTIVE SESSIONS

Pursuant to our Corporate Governance Guidelines and the rules of the NYSE, our non-management directors meet periodically in executive sessions with no Company personnel present. Our Corporate Governance Guidelines require separate sessions of the non-management directors at least twice a year.

The presiding director of the executive sessions is currently our Lead Independent director, Mr. Sepulveda. During 2019, our non-management directors met twice and our independent directors met once in executive sessions.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD

As stated in our Corporate Governance Guidelines, any Company stockholder or other interested party who wishes to communicate with the non-management directors as a group may direct such communications by writing to the:

Company Secretary

Cinemark Holdings, Inc.

3900 Dallas Parkway, Suite 500

Plano, TX 75093

The communication must be clearly addressed to the Board or to a specific director. If a response is desired, the individual should also provide contact information such as name, address and telephone number.

 

 

			19

All such communications will be reviewed initially by the Company Secretary. The Company Secretary will forward to the appropriate director(s) all correspondence, except for items of the following nature:

 

●

advertising;

●

promotions of a product or service;

●

patently offensive material; and

●

matters completely unrelated to the Board’s functions, Company performance, Company policies or that could not reasonably be expected to affect the Company’s public perception.

The Company Secretary will prepare a periodic summary report of all such communications for the Board. Correspondence not forwarded to the Board will be retained by the Company and will be made available to any director upon request.

CORPORATE GOVERNANCE POLICIES AND CHARTERS

The following documents make up our corporate governance framework:

 

●

Corporate Governance Guidelines;

●

Amended and Restated Charter of the Audit Committee (Audit Committee Charter);

●

Charter of the Governance Committee (Governance Committee Charter); and

●

First Amendment to Amended and Restated Compensation Committee Charter (Compensation Committee Charter).

Current copies of the above policies and guidelines are available publicly on the Company’s website at https://ir.cinemark.com/ under the “Corporate Governance” tab.

CODE OF BUSINESS CONDUCT AND ETHICS

The Company has also adopted a Code of Business Conduct and Ethics, which applies to directors, executive officers and employees. The Code of Business Conduct and Ethics sets forth the Company’s policies on critical issues such as conflicts of interest, insider trading, protection of our property, business opportunities and proprietary information. We will post on our website any amendment to, or a waiver from, a provision of the Code of Business Conduct and Ethics for executive officers and directors that have been approved by our Board or any Board committee. The Code of Business Conduct and Ethics is available on our website at https://ir.cinemark.com/ under the “Corporate Governance” tab.

BOARD COMMITTEES

Our Board currently has three standing committees – Audit Committee, Compensation Committee and the Governance Committee. As discussed earlier, the Board has created two additional committees, the Strategic Long-Range Planning Committee and the New Ventures Committee, which meet on an as needed basis. The current composition of each of the committees is set forth below:

 

Name of Director		Audit		Compensation		Governance		Strategic Planning		New Ventures
Darcy Antonellis		Member
Benjamin Chereskin				Member				Chair
Nancy Loewe		Member				Member
Lee Roy Mitchell										Chair
Steven Rosenberg		Member				Chair
Enrique Senior								Member		Member
Carlos Sepulveda		Chair		Member				Member
Raymond Syufy								Member		Member
Nina Vaca				Chair		Member
Mark Zoradi		-		-		-		-		-

 

 

			20

Audit Committee
NUMBER OF MEETINGS HELD DURING 2019:					4
NUMBER OF DECISIONS BY CONSENT DURING 2019:					2

Each of the Audit Committee members satisfies the standards for independence of the NYSE and the SEC as they relate to audit committees. Our Board has determined that each member of the Audit Committee is financially literate and that Mr. Sepulveda, a licensed certified public accountant with extensive public company accounting experience, qualifies as an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC. See Mr. Sepulveda’s biography on page 12 for further information regarding his qualifications to be an “audit committee financial expert”.

The Audit Committee is governed by the Audit Committee Charter which sets forth the purpose and responsibilities of this committee.

Functions:

The functions of the Audit Committee include the following:

 

●

assisting the Board in its oversight responsibilities regarding (1) the integrity of our financial statements, (2) our risk management compliance with legal and regulatory requirements, (3) our systems of internal control and (4) our accounting, auditing and financial reporting processes generally, including the qualifications, independence and performance of the independent registered public accountants;

●

approving the report required by the SEC for inclusion in our annual proxy or information statement;

●

appointing, retaining, compensating, evaluating and replacing our independent registered public accountants;

●

approving audit and non-audit services to be performed by the independent registered public accountants;

●

establishing procedures for the receipt, retention and resolution of complaints regarding accounting, internal control or auditing matters submitted confidentially and anonymously by employees through the whistleblower hotline; and

●

performing such other functions as the Board may from time to time assign to the Audit Committee.

The Audit Committee meets on a quarterly basis with Company management and Deloitte, to discuss, among other items, the earnings press release related to the quarter and the year (as applicable), the Company’s financial statements for the applicable period and any changes in significant accounting policies and its impact on the Company’s financial statements. The Audit Committee also meets, on a periodic basis, with Deloitte in executive sessions without the presence of members of management.

As part of the Board’s duty of risk oversight, the Board has delegated authority of cybersecurity oversight to the Audit Committee. To monitor and evaluate the cybersecurity threats and the effectiveness of the Company’s controls to address those risks, the Audit Committee is updated by Company management twice a year. The Audit Committee also oversees and monitors the enterprise level risks related to ethics and compliance with the Company’s code of business conduct. Company management provides to the Audit Committee, at every quarterly meeting, the top claims (as determined by management) reported through the ethics hotline during the quarter, and summary reports for various categories of claims, for both domestic and international, as compared to the previous year at the end of the year.

The Board has also delegated its authority to approve related party transactions to the Audit Committee. The Company’s written policy regarding approval of related party transactions provides that management must present to the Audit Committee all potential related party transactions including the nature of the transaction, material terms and the maximum dollar value of the transaction. The Audit Committee

 

 

			21

approves based upon the determination whether the transaction is fair and in the best interest of the Company. See Certain Relationships and Related Party Transactions on page 57 for further details on the approval of related party transactions.

Approval of Audit and Non-Audit Services:

The Audit Committee approves all audit and permissible non-audit services (including the fees and terms of the services) performed for the Company by its independent registered public accounting firm prior to the time that those services are commenced. The Audit Committee may, when it deems appropriate, form and delegate this authority to a sub-committee consisting of one or more Audit Committee members, including the authority to grant pre-approvals of audit and permitted non-audit services. The decision of such sub-committee is presented to the full Audit Committee at its next meeting. The Audit Committee pre-approved all fees for 2019 noted in the table below.

Fees Paid to Independent Registered Public Accounting Firm:

We paid the following fees (in thousands) to Deloitte and its affiliates for professional services rendered by them during 2019 and 2018, respectively:

 

Fees		2019				2018
Audit		$	2,056.9			$	1,837.2
Audit Related		$	154.0			$	10.4
Tax(1)		$	60.8			$	66.4
Other		$	-			$	-
Total		$	2,271.7			$	1,914.0

(1)Fees primarily include transfer pricing studies and tax compliance services.

Audit Committee Report

The Audit Committee has reviewed and discussed with management the Company’s audited financial statements for 2019. We have discussed with Deloitte the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. We have received the written disclosures and the letter from Deloitte as required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and have discussed with Deloitte its independence. Based on the above review and discussions, we recommended to the Board that the audited financial statements for the Company be included in the Company’s 2019 Form 10-K for filing with the SEC.

Respectfully submitted,

Carlos Sepulveda (Chair)

Steven Rosenberg

Darcy Antonellis

Nancy Loewe

 

 

 

			22

Functions

The functions of the Compensation Committee include the following:

 

●

making recommendations to the Board on the Company’s general compensation philosophy and objectives and on all matters of policy and procedures relating to executive compensation;

●

determining and approving the CEO’s compensation level;

●

determining and approving the compensation of the non-CEO NEOs and reviewing the compensation of certain other executive officers;

●

administering (to the extent such authority is delegated to the Compensation Committee by the Board) the incentive compensation and equity-based plans and recommending to the Board any modifications of such plans;

●

validating and approving the achievement of performance levels under the Company’s incentive compensation plans;

●

reviewing, recommending, and discussing with management the CD&A section included in the Company’s annual proxy statement; and

●

developing a succession planning program for the CEO and senior management.

 

 

The functions of the Governance Committee include the following:

 

●

identifying individuals qualified to become Board members and evaluate candidates for Board membership, including those recommended by stockholders in compliance with the Company’s by-laws;

●

recommending to the Board the director nominees for election or to fill any vacancies and newly created directorships on the Board;

●

identifying and recommending to the Board members qualified to fill any vacancies on a committee of the Board;

●

developing and recommending to the Board a set of corporate governance guidelines and reviewing and reassessing the adequacy of such guidelines at least annually;

●

overseeing the Board’s annual self-evaluation process and the Board’s evaluation of management;

●

periodically reviewing the criteria for the selection of new directors to serve on the Board and recommending any proposed changes to the Board for approval;

●

periodically reviewing and making recommendations regarding the composition and size of the Board;

●

periodically reviewing and making recommendations regarding the composition, size, purpose, structure, operations and charter of each of the Board’s committees, including the creation of additional committees or elimination of existing committees;

●

annually recommending to the Board the chairpersons and members of each of the Board’s committees; and

●

reviewing and reassessing the adequacy of the Governance Committee Charter on an annual basis and recommend any proposed changes to the Board for approval.

 

 

			23

DIRECTOR COMPENSATION

The compensation of the non-employee directors for 2019 was governed by our Third Amended and Restated Non-Employee Director Compensation Policy (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, as Company employees, Messrs. Mitchell and Zoradi do not receive any compensation for their services on the Board or any of its committees. See the compensation tables beginning on page 42 for the compensation paid to Messrs. Mitchell and Zoradi.

Each non-employee director received the following annual cash retainers, as applicable, for services as a Board and a committee member during 2019:

 

(a)

a base director retainer of $60,000;

(b)

additional retainer of $35,000 for the non-employee director who serves as the lead independent director;

(c)

additional cash retainer for services on the committees as follows:

 

Committee		Chairperson				Member
Audit		$	20,000			$	10,000
Compensation		$	15,000			$	10,000
Governance		$	10,000			$	7,500
Strategic Long-Range Planning		$	10,000			$	5,000
New Ventures		$	10,000			$	5,000

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, the non-employee directors receive an annual grant of restricted stock valued at $115,000. The number of shares of restricted stock is determined by dividing $115,000 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 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 a stock ownership guideline and are required to retain Common Stock ownership five times the value of their base retainer.

The following table sets forth summary information regarding the compensation of our non-employee directors for 2019.

 

Name		Fees Earned or Paid in Cash(1)				Stock Awards(2)				All Other Compensation(3)				Total
Darcy Antonellis		$	70,000			$	114,992			$	4,234			$	189,226
Benjamin Chereskin		$	80,000			$	114,992			$	4,234			$	199,226
Nancy Loewe		$	77,500			$	114,992			$	4,234			$	196,726
Steven Rosenberg		$	80,000			$	114,992			$	4,234			$	199,226
Enrique Senior		$	70,000			$	114,992			$	4,234			$	189,226
Carlos Sepulveda		$	130,000			$	114,992			$	4,234			$	249,226
Raymond Syufy		$	70,000			$	114,992			$	4,234			$	189,226
Nina Vaca		$	82,500			$	114,992			$	4,234			$	201,726

 

(1)

Includes all annual cash retainers, as applicable.

 

(2)

The grant date fair values were calculated based upon the closing price of Common Stock on June 14, 2019 of $38.14 per share. This calculation is in accordance with FASB ASC Topic 718.

 

 

			24

See Note 16 to the Company’s 2019 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.

At December 31, 2019, each of the directors owned 3,015 shares of restricted stock. See Security Ownership of Certain Beneficial Owners and Management table on page 55 for total stock ownership of each of the directors.

 

(3)

The amounts reported are dividends paid during 2019 on the shares of unvested restricted stock granted in 2018 and 2019.

ITEM TWO — RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020

The Audit Committee has appointed and the Board has ratified the appointment of Deloitte as the Company’s independent registered public accounting firm for 2020. As a matter of good corporate governance, we are seeking stockholder ratification of the appointment of Deloitte. If the stockholders do not ratify the appointment of Deloitte, the Audit Committee may review its future selection of auditors. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of the Company and its stockholders.

One or more representatives of Deloitte are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to answer appropriate questions. Please refer to page 22 for the fees paid to Deloitte in 2019 and 2018.

Unless marked to the contrary, proxies received will be voted “FOR” ratification of the appointment of Deloitte as the independent registered public accounting firm for 2020.

OUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020.

ITEM THREE — ANNUAL ADVISORY VOTE ON EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

TABLE OF CONTENTS

To assist our stockholders in locating important information regarding our executive compensation program, the CD&A is organized as follows:

 

Section		Page Reference
Our NEOs			26
Executive Summary			26
2019 Say-on-Pay Results			26
Our Compensation Philosophy			27
Our 2019 Performance			28
Executive Compensation Components (including 2019 Changes)			31
2019 Compensation Mix			38
Executive Compensation Process: Roles			39
Executive Compensation Process: Peer Group Review			40
Compensation Risk Assessment			40
Compensation Committee Report			41

 

 

			25

OUR NEOS

The CD&A provides a description of the material elements of our executive compensation program, as well as perspective and context for decisions made regarding the compensation of our CEO, CFO and our three other most highly compensated executive officers for the year ended December 31, 2019. These executive officers and their current positions are as follows:

 

Name		Age		Position
Lee Roy Mitchell		83		Executive Chairman of the Board
Mark Zoradi		66		Chief Executive Officer; Director
Sean Gamble		45		Chief Operating Officer; Chief Financial Officer
Michael Cavalier		53		Executive Vice President-General Counsel and Secretary
Valmir Fernandes		59		President-Cinemark International

Lee Roy Mitchell is the founder of the Company. He has served as our Chairman of the Board since March 1996 and as a director since our inception in 1987. Mr. Mitchell has been engaged in the motion picture exhibition business for over 50 years. Mr. Mitchell is the husband of Tandy Mitchell, an employee of the Company, and the brother-in-law of Walter Hebert III, the Executive Vice President–Purchasing, of the Company. Mr. Mitchell currently serves on the board of directors of NCMI.

Mark Zoradi has served as our director since June 2015 and our CEO since August 2015. Mr. Zoradi spent 30 years at The Walt Disney Company, 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 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.

Sean Gamble has served as our COO and CFO since January 2018 and as our Executive Vice President and CFO since August 2014. Prior to joining Cinemark, from February 2009 until April 2014, Mr. Gamble worked for the Comcast Corporation as Executive Vice President and CFO of Universal pictures within NBCUniversal, one of the world’s leading media and entertainment companies. 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 until January 2009.

Michael Cavalier has served as our Executive Vice President-General Counsel and Secretary since February 2014, our Senior Vice President-General Counsel and Secretary since January 2006 and our General Counsel since 1997. He has been with Cinemark for more than 25 years.

Valmir Fernandes has served as our President of Cinemark International, L.L.C. since March 2007 and has been with Cinemark for more than 20 years.

EXECUTIVE SUMMARY

We are a leader and one of the most geographically diverse operators in the motion picture exhibition industry. Our sustained growth and profitability has been driven by our management team. In this section, we describe the material components of our compensation program for 2019 for our NEOs and the process by which their compensation is set.

2019 SAY-ON-PAY RESULTS

We request an annual stockholder say-on-pay vote on our executive compensation program. At our 2019 Annual Meeting, approximately 95% of our stockholders present (in person or via proxy) and voting,

 

 

			26

approved our executive compensation programs and policies for 2018. The Compensation Committee reviewed the results of the 2019 say-on-pay. Due to the high approval rate, the Compensation Committee did not make any changes to its overall approach or the structure of our executive compensation program but calibrated the IRR hurdles for the performance-based equity incentive awards as discussed on page 37. The following graph shows the stockholder approval rate over the past five years for our say-on-pay proposal.

 

OUR COMPENSATION PHILOSOPHY

Our vision, as a leader in the motion picture exhibition industry, is to shape the future of the industry by being recognized as the most influential, out-of-home entertainment network in the world. We hire high caliber individuals who can determine our strategy to execute our long-term vision while continuing to deliver our mission of making the movie-going experience memorable by engaging with our customers and providing world class facilities and services. To ensure that our key executives are incentivized appropriately to deliver our mission and vision, the Compensation Committee has designed an executive compensation program that strongly aligns with the interests of stockholders in creating sustainable long-term stockholder value by directly linking pay to Company and individual performance. Each of the measures in our performance-based plan is designed to align with, and support, our business strategy – create an extraordinary guest experience, deepen customer loyalty and pursue growth opportunities.

While a significant portion of each NEO’s compensation is based on performance and therefore “at risk”, the Compensation Committee believes that a competitive compensation program is necessary for us to attract and retain these key executives. We typically seek to establish target total compensation opportunities for our NEOs within a competitive range of the median of compensation opportunities at our peer companies. Actual earned compensation may vary based on the Company and individual performance. In certain circumstances we may target pay above or below the competitive median to recognize the individual’s unique qualifications or performance. See page 40 for a discussion of how we determine executive compensation relative to our peers.

Our compensation program is designed with the following principles in mind:

 

●

pay our employees relative to industry peers based on their roles and responsibilities, capabilities, their performance and market conditions;

 

●

motivate key personnel to perform with the highest integrity for the benefit of our stockholders;

 

●

continue our focus on sound governance practices by implementing executive compensation best practices and policies.

 

 

			27

The chart below identifies the hallmarks of our executive compensation program which follow compensation best practices:

 

Characteristics		Description
Competitive Base Salary		Base salary is market competitive to retain valued employees
Balanced Mix of Pay Components over short and long terms		Target compensation mix is weighted towards long-term equity based incentives rather than short-term cash incentives
Balanced Approach to Performance-based Awards		Performance targets are tied to multiple financial metrics of the Company; performance periods for long-term equity incentive awards overlap and, therefore, reduce the motivation to maximize performance in any one period
Individual Performance Modifies Bonus Payout		Non-CEO NEO bonus payout is modified up to +/-15% based on performance of individual goals set against Company strategic objectives for the year; CEO evaluated against Company performance and execution of strategic goals
Stock Ownership Guidelines		CEO required to own, directly or indirectly, Company equity five times base salary; other executive officers to own two times their base salary
Hedging in or pledging Common Stock prohibited; no margin account		Directors and executives (including NEOs) who are subject to the Supplemental Insider Trading Policy, are prohibited to trade in puts, calls or other derivative securities with respect to Company securities and short sales of Company securities. They may not hold Company securities in a margin account, and may not, without prior approval, pledge Company securities as collateral for any other loan

OUR 2019 PERFORMANCE

 

		5th consecutive year of global record revenue reaching $3.3B

 

•

Surpassed North American box office results by 200 basis points

•

Increased dividends 6.25% to $1.36 per annum

•

Outperformed North American industry box office results in 10 out of past 11 years

 

		Net addition of 84 screens globally

 

•

Grew domestic F&B per cap 52 consecutive quarters with an all time domestic per cap of $5.31

•

Increased Luxury Lounger footprint to 60% of domestic circuit and 80% of XD auditoriums

•

Opened a new design concept, Cut! By Cinemark - a full dine-in experience

 

		Grew Movie Club membership to average 2,600 per theatre

 

•

Grew total Movie Club membership to 930,000

•

Generated 14% box office revenue from Movie Club

•

Redesigned and successfully relaunched Movie Fan, our free, domestic, loyalty program

•

Expanded our global reach with over 12 million addressable consumers with whom we have direct, on-going communications

 

 

			28

The results of our financial performance over the past years demonstrates our consistent performance even during challenging industry circumstances such as economic and political conditions in Latin America, weakening foreign currencies, rise in construction costs and quality and timing of in-theatre film content. Our experienced management team has successfully navigated us through demanding industry environments with a disciplined operating philosophy and implementation of strategic initiatives. The charts below outline our performance over the past five years with regards to certain key financial metrics:

 

 

Net income for 2019 decreased from 2018 primarily due to increased facility lease expenses for new theatres and impact of ASC Topic 842 Lease Accounting, increased salaries and wage expenses due to increased minimum wage rates and in-theatre initiatives, and increased utilities and other costs primarily related to increases in credit card processing fees and third party online service fees.

Adjusted EBITDA is a non-GAAP financial measure. This non-GAAP financial measure should be considered in addition to, but not as a substitute for, the information provided in accordance with U.S. generally accepted accounting principles (GAAP). A reconciliation of Net Income to Adjusted EBITDA is provided in footnote 20 to the Company’s 2019 Form 10-K.

 

 

 

			29

We have consistently maintained a balanced and disciplined operating approach as we built our business over the years. This has enabled us to build a strong cash position which we can utilize to execute our strategic initiatives, manage risks, pursue growth opportunities and further extend our consistent track record of financial health and results. Our cash position over the past five years is presented here. While we are fiscally conservative we believe that investing in long-term growth and stability through initiatives that enrich our guest experience, drive consumer engagement and improve productivity is a prudent use of capital.   One of our key capital allocation priorities is to maximize stockholder value and we have managed that priority consistently in the past five years by distributing capital to our stockholders via quarterly dividends. In the past five years, we have grown our dividend by 36% and in 2019 returned approximately $160 million to our stockholders. The table and chart below illustrate our dividend rates over the past five years and the total returns to our stockholders.

 

Performance Relative to Peers

Cinemark has a distinguished and consistent track record of performance and outperformance relative to its industry peers.

We compare our financial performance against our direct competitors in the movie exhibition industry (theatre peers). In 2019, our theatre peers were the two publicly-held companies in our industry, namely, AMC Entertainment Holdings, Inc. (AMC) and IMAX Corporation (IMAX). We believe that this peer group is an appropriate benchmark for evaluating our financial performance since we directly compete with them for investor capital.

 

 

			30

Our financial performance relative to our theatre peer group has been very strong over the past five years. Our Total Stockholder Return (TSR) (with dividends reinvested) for the one-year, three-year and five-year periods, as compared to our theatre peers, are as follows:

 

		1 YR TSR		3YR TSR		5YR TSR
CNK		(1.6%)		(1.9)%		11.7%
AMC		(34.5%)		(67.3%)		(51.9%)
IMAX		8.6%		(34.9%)		(33.9%)
S&P 500		31.5%		53.2%		73.9%
Group		(8.4%)		(51.7%)		(42.2%)

 

SOURCE: Yahoo! Finance

EXECUTIVE COMPENSATION COMPONENTS

The design of our executive compensation program is consistent with the compensation structure used in our industry:

 

●

base salary

 

●

bonus

 

●

long-term equity incentive awards

 

●

standard benefits

 

●

limited perks

The Compensation Committee designs the executive compensation program to align pay with performance with the substantial majority of target compensation comprised of variable performance-based incentive awards. The principal components of our executive compensation program and the measurement metrics determining their amount, are provided below. Please see discussion on each of the components for additional details and the section on 2019 Compensation Mix on page 38 for the distribution of target compensation between fixed and variable components.

 

 

			31

 

Total pay Fixed Variable Base Salary Annual Cash Incentive Long-term Incentive Market; Individual role and responsibility Company Performance Individual Performance Restricted Stock Restrited Stock Units Reviewed Annually or at Hiring or Promotionl Targeted between 25th and 75th percentile of peer group Adjusted EBITDA Goal @Threshold, Target, Maximum Ratable Payments Based on Performance Threshold 90% Adj. EBITDA Target 100% Adj. EBITDA Maximum 110% Adj. EBITDA 50% Target Payout 100% Target Payout 150% Target Payout ABO Rating Based on Achievement of Individual Goals Set to Achieve Company's Strategic Objective; +/-15% Adjustment to Bonus 4-year Vesting; 50% Every 2 Years IRR + Service Ratable Vest; IRR Over 2-Year Performance Period+2-Year Service Threshold 6% IRR Target 8% IRR Maximum 14% IRR 25% Target Payout 100% Target Payout 175% Target Payout

Base Salary

Base salary provides competitive annual compensation to retain high-performing, valued employees. In determining base salary, the Compensation Committee takes into consideration the scope and nature of job responsibilities of the NEO, market competitiveness relative to executives in similar positions at comparator group companies, merit increase recommendations of the CEO based on performance reviews (except in the case of his own compensation), and other judgmental factors deemed relevant by the Compensation Committee. The Compensation Committee has not adopted any formula with specific weightings assigned to any of the factors above.

Accordingly, in February 2019, as part of the annual compensation review process (required also by each of their employment agreements), the Compensation Committee approved base salary increases for the NEOs ranging from approximately 2.9% to 10% of their respective base salaries. The base salary increases for 2019 were as follows:

 

Name		Base Salary Percentage Increase in 2019		2019 Base Salary
Lee Roy Mitchell		2.6%		$          1,000,001
Mark Zoradi		10.0%		$          1,100,000
Sean Gamble		4.2%		$             625,000
Michael Cavalier		2.9%		$             540,000
Valmir Fernandes		2.9%		$             540,000

 

 

			32

Bonus

Our bonus structure is designed to motivate and reward bonus eligible employees for the successful completion of our annual performance goals. Company performance is measured against pre-established performance metrics set for the year by the Compensation Committee. The bonus goals are established in writing by the Compensation Committee, with the expectation that attainment of these goals would require significant effort in light of the business environment.

The participants to our bonus program are rewarded for achieving short-term financial and operational goals of the Company based on individual targets expressed as percentages of base salaries. For the NEOs, the target bonus opportunities are set by the Compensation Committee by taking into consideration a variety of factors including peer group data, CEO’s recommendation (except for his own) and the individual’s current and anticipated contributions to the strategic goals of the Company. Each participant to our bonus plan is entitled to receive a ratable portion of his/her target bonus based upon the Company’s level of achievement, within the range of threshold and maximum percentages, of the target performance metric set by the Compensation Committee. The actual amount of cash bonuses paid, if any, may result in a cash bonus that is greater or less than the stated individual target (and could be zero) depending on whether, and to what extent, the applicable Company performance metric and other conditions are satisfied.

What is the Company’s annual performance metric?

The Compensation Committee sets the Company’s bonus target for the year in terms of Adjusted EBITDA, regarded as a key performance metric in our industry. The Adjusted EBITDA target for the bonus is set by the Compensation Committee for each of domestic, international and worldwide, based on the annual operating budget approved by the Board (budgeted Adjusted EBITDA). The budgeted Adjusted EBITDA may be adjusted, upward or downward, at the end of the performance year, to eliminate any variance between the actual North American industry box office for the fiscal year and the industry forecast used to set the bonus target for the year.

During the first quarter after the performance year, the Compensation Committee calculates the Adjusted EBITDA for the bonus payment. This is determined by adjusting the domestic, international and worldwide Adjusted EBITDA for the year for certain add-backs and adjustments such as cash bonus accruals, certain severance payments, if any, unusual expenses such as those related to accounting changes, a +/- 5% collar for foreign exchange fluctuation, and other adjustments the Compensation Committee deems appropriate including, but not limited to, factors such as extraordinary, unusual or non-recurring events that were not included in the operating budget for the year (Bonus Adjusted EBITDA). The Bonus Adjusted EBITDA is compared to the budgeted Adjusted EBITDA set at the beginning of the year (and as adjusted at the end of the year) to determine the bonus payout percentage, if any.

 

 

			33

The bonus payout for the NEOs, except for Mr. Fernandes, is based on the worldwide Adjusted EBITDA while that of all other domestic bonus eligible employees is based 100% on domestic EBITDA. Mr. Fernandes’s payout is based 50% on worldwide and 50% on international Adjusted EBITDA. The worldwide Adjusted EBITDA targets for 2019 were as follows:

 

 

 

Company achieves 90% of Bonus Adjusted EBITDA $633.1 Million (Threshold) Plan Participant Receives 50% of Target Payout Company achieves 100% of Bonus Adjusted EBITDA $703.4 Million (Target) Plan Particiapnt Receives 100% of Target Payout Company achieves 110%* of Bonus Adjusted EBITDA $773.7 Million (Maximum) Plan Particiapnt Receives 150% of Target Payout

*The maximum goal for non-NEOs was $759.7 million or 108% of Bonus Adjusted EBITDA. The Adjusted EBITDA target for international was $127 million.

How is bonus adjusted for individual performance?

 

 

As part of the year-end performance review process, the individual’s manager evaluates the individual’s performance against his/her ABO goals and assigns a composite score. The ratings range from ‘Significantly Below Expectations’ to ‘Exceeds Expectations’. Based on the composite rating, a discretionary modifier of a maximum of +/-15% is applied to adjust the individual’s bonus payout calculation. We do not have a minimum level of guaranteed bonus and maximum bonus payout (Adjusted EBITDA based + ABO modifier) cannot exceed 165% of the individual’s target bonus opportunity.

The annual bonus process is as follows:

 

Annual Process Set Company Adjusted EBITDA Target for the Year (Q1 Performance Year) Set NEO Target Bonus (Q1 Performance Year) Assess Company Performance Against Set Adjusted EBITDA Goal (Q1 Payout Year) Determine Payout Percentage Based on Adjusted EBITDA Performance Modify Individual Payout Based on Individual ABO Rating (Except the CEO) No ABO Modifier for the CEO Determine Payout

 

 

			34

The Compensation Committee may, in its discretion, at any time, establish (and, once established, rescind, waive or amend) additional conditions and terms of payment of the cash bonus (including, but not limited to, the achievement of other financial, strategic or individual goals, which may be objective or subjective) as it may deem appropriate in carrying out the purposes of the bonus program. The Compensation Committee may also take into account such other factors as it deems appropriate in administering any aspect of the bonus program, including reducing the amount of the bonus at any time prior to payout based on such criteria as it shall determine, including, but not limited to, individual merit and the attainment of specified levels of one or any combination of the performance factors. However, the Compensation Committee cannot adjust upwards the bonus payable to a NEO or waive the achievement of a performance target requirement for a NEO except in the case of the death or disability of the executive or a change in control of the Company.

What were the changes to the NEO bonus payouts for 2019?

The Compensation Committee raised the target bonus opportunity for Mr. Zoradi to 125% of his base salary. This was deemed appropriate in light of several factors, but primarily for his contribution and continued leadership as our CEO in focusing on new strategies for profitable growth and his relative positioning versus our compensation peers. Mr. Fernandes’s target bonus was raised to 90% of his base salary also due to his relative positioning versus market and to align with Messrs. Gamble and Cavalier.

How was cash bonus calculated for 2019?

In February 2020, the Compensation Committee certified the worldwide Bonus Adjusted EBITDA, as adjusted, for 2019 at $696.9 million and international Adjusted EBITDA, as adjusted, at $130.0 million. This yielded a payout at 141.4% of the individual target opportunity for each of Messrs. Mitchell, Zoradi, Gamble and Cavalier and 126.7% for Mr. Fernandes. Each of Messrs. Gamble and Cavalier also received an ABO adjustment of +7.5%. The individual cash bonus payouts for 2019 for each of the NEOs was as follows:

 

Name		2019 Base Salary				Individual Target (Percentage of Base Salary)		Payout Percentage of Individual Target		ABO Modifier		Cash Bonus Payout
Lee Roy Mitchell		$	1,000,001			100%		141.4%		-		$	1,414,002
Mark Zoradi		$	1,100,000			125%		141.4%		-		$	1,944,250
Sean Gamble		$	625,000			90%		141.4%		7.5%		$	837,562
Michael Cavalier		$	540,000			90%		141.4%		7.5%		$	723,654
Valmir Fernandes		$	540,000			90%		126.7%		-		$	615,762

Long-term Equity Incentive Compensation

Cinemark’s long-term equity incentive compensation program is intended to help (1) attract, motivate and retain key talent, and (2) align our executives’ interests with stockholders’ interests to maximize long-term stockholder value.

The long-term equity incentive compensation is awarded as time-based and performance-based equity. Time-based equity enables us to attract and retain highly qualified executive officers as leaders to ensure our continued success. Performance-based equity encourages Company’s long-term growth and aligns the executive’s interests with the interests of our stockholders. The combination of the two, with an emphasis placed on performance-based equity, ensures both balance and alignment within our long-term incentive program. Although no longer necessary under Section 162(m) of the Internal Revenue Code, grants to all eligible employees, including the NEOs, are made in the first quarter of the year. The NEOs receive both time-based and performance-based equity.

 

 

			35

How is the long-term incentive program structured?

The target value of long-term equity awards granted to a NEO is based on a percentage of the executive’s base salary. The target value percentage and the split between time-based and performance-based grants is determined by the Compensation Committee by taking into account factors such as the individual’s leadership, NEO’s contribution to Company operations, projected state of the economy over the performance period, overall business environment and relative positioning versus peer group comparable.

The restricted stock grants typically vest 50% on each of the second and fourth anniversaries of the grant date, subject to continuous employment through the vest dates.

Recipients of restricted stock awards are permitted to:

 

(i)

receive dividends on the restricted stock (prior to vest) to the extent dividends are paid by the Company on shares of its Common Stock, and

 

(ii)

to vote such Common Stock during the restriction period.

As of the Record Date, the Company’s dividend rate is $0.36 per common share per quarter.

The performance awards are granted in the form of restricted stock units. The goals for the performance shares are based on one or more pre-established objective criteria that specify the number of shares of Common Stock that will be issued upon attaining the performance goals. After certification of the attainment of the performance goal, the underlying Common Stock is subject to additional time-based vesting conditions. Any dividends that are attributable to the underlying Common Stock will be accrued and paid to the recipient, to the extent the performance award vests, at the end of the four years when the Common Stock is issued. The performance awards have a four-year vest schedule – performance period of two years followed by an additional two-year service requirement.

The measurement metric for the performance awards is an implied equity value concept that measures the IRR over a two-year performance period beginning on January 1 of the grant year and ending on December 31 of the following year. The implied equity value is based on a valuation model utilizing a multiple of Adjusted EBITDA (subject to certain specified adjustments) and other factors that produce a fundamental valuation of Cinemark equity. IRR represents the growth in this implied equity value during the performance period. The structure of the performance award program is similar to that of the bonus program. Each performance target underlying the performance awards has a threshold, target and maximum level and vest on a pro rata basis according to the IRR achieved during the performance period. The target IRR goal for the performance-based award is set by the Compensation Committee based on projected value creation with a substantial degree of difficulty of attaining the performance level. An adjustment of +/-7.5% for fluctuations in foreign currency translations is applied to certain inputs used in the calculation of the implied equity value to determine the IRR for the performance period. The targets for the current year are established by the Compensation Committee in the first quarter of the year. The number of shares of Common Stock an executive may receive upon the attainment of a performance goal cannot be determined at the date of grant because the payment of such compensation is contingent upon attainment of the IRR. If, at the end of the performance period, the Compensation Committee certifies that the performance target has been met, the shares of Common Stock underlying the restricted stock units are subject to an additional time-based vesting restriction contingent upon the employee’s continued service until the vest date. Straight-line interpolation is used to determine payout between threshold, target and maximum goals.

The certification of the 2017 and 2018 performance-based awards reflect the above process. After the completion of the performance periods for each of the 2017 and 2018 grants, in February 2019 and February 2020, respectively, the Compensation Committee certified the vest percentages of the

 

 

			36

performance-based awards. The restricted stock units granted to the NEOs in February 2017 will vest at 96% and restricted stock units granted in 2018 will vest at 105% of the respective target opportunities. To the extent they vest subject to the service requirement, the Common Stock underlying the restricted stock units that vested shall be issued in February 2021 and February 2022 respectively. The table below provides the number of performance-based restricted stock units that were granted and that will vest for each of the NEOs for the 2017 and 2018 grant years:

 

Name		2017 Grant				2018 Grant
		RSU Granted @Maximum		RSU to Vest in February 2021		RSU Granted @Maximum		RSU to Vest in February 2022
Lee Roy Mitchell		N/A		N/A		N/A		N/A
Mark Zoradi		56,144		35,931		72,058		50,439
Sean Gamble		13,790		8,825		24,211		16,947
Michael Cavalier		11,819		7,563		18,159		12,711
Valmir Fernandes		11,120		7,116		15,132		10,592

What were the changes to the long-term incentive program in 2019?

In February 2019, the Compensation Committee reviewed the IRR formula and hurdle rates used to determine the amount of performance-based shares that should vest, against the backdrop of industry trends and non-controllable market factors, such as increasing pressures of operating in an environment inhabited by both live entertainment and at-home services, quality and timing of in-theatre film content, challenging political and economic landscape in Latin America, significant currency fluctuations and rise in construction costs. Based on such review, the Compensation Committee set the hurdle rates for the 2019 awards which result in a wider payout range than prior years. A comparison is shown below of the 2019 goals and the 2018 goals.

 

Grant Year		Goals
		Threshold		Target		Maximum
2019		6.0%		8.0%		14.0%
Percentage of Individual Target Payout		25%		100%		175%
2018		7.0%		9.5%		13.0%
Percentage of Individual Target Payout		50%		100%		150%

Also, based on Mr. Zoradi’s relative market positioning, the Compensation Committee raised the target percentage of his base salary awarded as long-term equity incentive, retaining the 75%-25% split in favor of performance-based awards. The Compensation Committee determined that this increase of Mr. Zoradi’s target long-term equity incentive is an appropriate alignment with stockholder objective of long-term return and the CEO’s role in setting and executing the long-term strategic goals. There was no change to the targets of the other NEOs. Mr. Mitchell is not granted any equity due to his substantial ownership in the Company. The long-term equity award targets as percentages of respective base salaries for 2019 were as follows, compared to that in 2018:

 

NEO		Percentage of Base Salary in 2018		Percentage of Base Salary in 2019
Lee Roy Mitchell		N/A		N/A
Mark Zoradi		250%		275%
Sean Gamble		175%		175%
Michael Cavalier		150%		150%
Valmir Fernandes		125%		125%

 

 

			37

Consistent with our compensation philosophy of pay for performance, in 2019, the Compensation Committee awarded the NEOs (except Mr. Mitchell) supplemental grants, in addition to the annual equity grants, to reward and incentivize them for the Company’s sustained achievement over industry benchmarks. Mr. Zoradi was awarded both time-based and performance-based shares while Messrs. Gamble, Cavalier and Fernandes were awarded only time-based shares. The time-based restricted stock vest fully on the second anniversary of the grant date and the performance-based restricted stock units awarded to Mr. Zoradi vest on the same schedule as his regular 2019 grant – two-year performance period with an additional two-year service period with a vest, based on Company performance, in February 2023. The supplemental grant for each NEO was as follows:

 

Name		Restricted Stock		Restricted Stock Units
Lee Roy Mitchell		N/A		N/A
Mark Zoradi		1,475		3,027 (@ Maximum)
Sean Gamble		1,125		—
Michael Cavalier		9,64		—
Valmir Fernandes		911		—

The total number of time-based and performance-based shares (at maximum), inclusive of the supplemental grants discussed above, granted to each of the NEOs in 2019 is as follows:

 

Name		Time-based Restricted Stock		Performance-based Restricted Stock Units
Lee Roy Mitchell		N/A		N/A
Mark Zoradi		21,818		109,311
Sean Gamble		12,851		30,780
Michael Cavalier		9,648		22,795
Valmir Fernandes		8,147		18,996

2019 COMPENSATION MIX

The presentations below show the mix of the variable and fixed components of compensation as a percentage of target compensation. Mr. Zoradi is presented individually while Messrs. Gamble, Cavalier and Fernandes are presented as a group. Since Mr. Mitchell does not receive any equity grant on an annual basis due to his substantial ownership in the Company, he has not been included in the non-CEO NEO group. His target compensation was approximately 49% each of base salary and bonus and 2% benefits.

 

 

 

 

 

			38

EXECUTIVE COMPENSATION PROCESS: ROLES

Role of the Compensation Committee and the Compensation Consultant: The Compensation Committee oversees and provides strategic direction to management regarding all aspects of our pay program for senior executives. It sets the compensation of the CEO and the non-CEO NEOs. If deemed appropriate, the Compensation Committee advises the Board of its determination of the compensation of the CEO and certain other executive officers, prior to its implementation. But, while the Compensation Committee may consider input provided by the Board, the compensation decisions and determinations are made solely by the Compensation Committee.

Each year, the Compensation Committee reviews our executive compensation program to ensure it continues to reflect our commitment to align the objectives and rewards of our executive officers with the creation of value for our stockholders. Our compensation programs, for both executives as well as non-executives, have been designed to reinforce our pay-for-performance philosophy by delivering total compensation that motivates and rewards performance tied to individual goals that are linked to Company’s strategic plan.

The Committee has the authority, in its sole discretion, to retain compensation consultants to assist the Committee in evaluating the compensation of executive officers. In February 2019, the Compensation Committee engaged Pearl Meyer as its consultant to provide independent analytical and evaluative advice regarding the Company’s current or proposed compensation arrangements for senior executives and related market trends and practices. The Compensation Committee engages in extensive executive compensation discussions with Pearl Meyer to review best practices and receive a competitive assessment of executive compensation compared to peers. The Committee reviews total compensation and approves each of the elements of executive compensation, and reviews whether our compensation programs and practices carry undue risk.

The Compensation Committee determined the independence of Pearl Meyer using the NYSE listing standards regarding independence of compensation consultants. Pearl Meyer evaluates the competitiveness of the design of the Company’s executive compensation program, including that for directors and recommends appropriate changes; reviews the competitiveness of the compensation of individual NEOs and certain other executive officers; evaluates market pay data and competitive-positioning; provides analyses and inputs on program structure, performance measures, and goals; provides updates on market trends and the regulatory environment as it relates to executive compensation; reviews various management proposals presented to the Compensation Committee related to executive compensation and provides objective analysis and recommendations; and works with the Compensation Committee to validate and strengthen the pay-for-performance relationship and alignment with stockholder interests. Pearl Meyer does not perform other services for Cinemark, and will not do so without the prior consent of the Compensation Committee. Pearl Meyer meets with the Compensation Committee, outside the presence of management, in executive sessions. The Committee relies on its collective experience and judgment along with the recommendations prepared by Pearl Meyer to set executive compensation.

Role of Management and the CEO in Setting Executive Compensation: Each year, our CEO evaluates the performance of certain members of upper management including Messrs. Gamble, Cavalier and Fernandes (direct reports). Our CEO makes a recommendation for the compensation of his direct reports based upon his evaluation and their ABO rating, their roles and responsibilities, and market benchmarking data for similarly placed executives, as provided by Pearl Meyer. The Compensation Committee considers our CEO’s recommendation relative to our strategic plan, operating goals, and compensation philosophy. In consultation with Pearl Meyer, the Compensation Committee also considers general market conditions and industry trends to set non-CEO NEO executive compensation.

Process for Setting CEO Compensation: The Compensation Committee evaluates our CEO’s performance throughout the year in light of our strategic plan, targets, operating goals, and key performance indicators. The Compensation Committee also considers general market conditions, specific industry trends and peer review data for each element of compensation, as provided by Pearl Meyer. The Compensation Committee also reviews the CEO’s employment agreement and assesses his target compensation. The CEO does not participate in discussions or decisions regarding his own compensation.

 

 

 

			39

EXECUTIVE COMPENSATION PROCESS: PEER GROUP REVIEW

To help establish competitive ranges of base salary, incentive compensation opportunities, and target compensation, the Compensation Committee relies on competitive market data from surveys and reports prepared by Pearl Meyer. We consider market survey data from a group of size-appropriate comparators operating in the entertainment and retail industries (peer group) that are also traded publicly and with which we compete for executive talent.

Based on the criteria described above, our peer group for 2019 remained unchanged from 2018, and was as follows:

 

AMC Entertainment Holdings, Inc.		Lions Gate Entertainment Corp.		Discovery, Inc.
AMC Networks Inc.		Live Nation Entertainment, Inc.		IMAX Corporation
Brinker International, Inc.		The Madison Square Garden Company		Six Flags Entertainment Corporation
Cineplex, Inc.		Cineworld
Dave & Buster’s Entertainment, Inc.		E.W. Scripps Company

A blended market data using the most recent proxy data and size-appropriate survey information provided by Pearl Meyer was used by the Compensation Committee to determine 2019 compensation for each of the NEOs. The market data that our Compensation Committee reviews show percentile compensation levels for various executive positions with comparable job responsibilities as our NEOs. The Compensation Committee also analyzes market data regarding compensation mix among base salary and annual and long-term incentives awards. The Compensation Committee reviews this mix analysis when evaluating the separate compensation components for each executive. The Committee does not endeavor to set executive compensation at or near any particular percentile, and it considers target compensation to be competitive if it is generally within a reasonable range of the market median. Market data is one of many factors that the Compensation Committee considers in the determination of executive compensation levels. Other factors include level of responsibility, the individual’s performance, expectations regarding the individual’s future potential contributions, ability to drive the Company’s strategy, retention strategies, budget considerations, and the Company’s performance.

COMPENSATION RISK ASSESSMENT

Our compensation program provides strategic direction to the participant and engages them in the Company’s success, which contributes to stockholder value. We believe our approach to goal setting, establishing targets with payouts at multiple levels of performance, evaluation of performance results and negative discretion in the payout of incentives help to mitigate excessive risk-taking that could harm Company value or reward poor judgment by our executives. Below are some additional highlights of the Company’s compensation program which mitigate risks associated with compensation:

 

●

Appropriate mix of “short- vs. long-term” pay and “fixed vs. variable” pay” to reward overall performance;

●

Company performance measured against objective financial metrics;

●

Portion of individual cash bonus payout tied to the individual’s ABO ratings which measures the performance of the individual’s goals set against the Company’s strategic objectives for the year;

●

Employees’ commitment to our culture of accountability reinforced through a comprehensive performance management and compensation system;

●

Capped payout levels for incentive compensation;

●

Stock ownership requirements for directors, NEOs and executive vice-presidents – directors required to retain Common Stock ownership five times the value of their base retainer, the CEO five times his/her base salary and other executive officers two times their respective base salaries;

●

Vest of a significant portion of long-term equity incentive awards linked to performance over a period of time (with overlapping performance periods);

●

Validation of pay-for-performance on an annual basis by stockholders; and

 

 

			40

●

Prohibiting, per our Supplemental Insider Trading Policy, covered employees from engaging in certain forms of hedging transactions, with respect to Company securities, which would block the employee from being exposed to the full risks of stock ownership as the Company’s other stockholders. Additionally, the covered employees may not hold Company securities in a margin account, and may not, without prior approval, pledge Company securities as collateral for any other loan except in the case of a non-margin loan where the covered employee demonstrates that the employee has the financial ability to repay the loan without resorting to the pledged securities. The Company has not, as of date, granted any exceptions to this policy. The Supplemental Insider Trading Policy covers all our directors and executive officers and any additional persons that the Company may from time to time designate as being subject to this policy because of their position with the Company and access to material nonpublic information.

Our Compensation Committee monitors and considers the risk mitigating factors when setting executive compensation. Based on such review, the Compensation Committee has concluded that our compensation programs do not create risks that are reasonably likely to have a materially adverse effect on the Company or put the Company at-risk.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the CD&A as required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Compensation Committee recommended to the Board that the CD&A be included in this proxy statement and incorporated by reference in the Company’s 2019 Form 10-K, and the Board has approved the recommendation.

Respectfully submitted,

Nina Vaca (Chair)

Benjamin Chereskin

Carlos Sepulveda

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

 

Plan Category		Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (1)		Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
Equity compensation plans approved by security holders		749,895		N/A		7,384,464
Equity compensation plans not approved by security holders		-		-		-
Total		749,895		N/A		7,384,464

 

(1)

Represents unearned shares underlying restricted stock units, assuming the achievement of maximum performance goals.

 

 

			41

SUMMARY COMPENSATION TABLE FOR 2019

The following table sets forth summary information concerning the total compensation earned by our NEOs for each of the last three completed fiscal years.

 

Name and             Principal Position		Year		Salary ($)(1)		Stock Awards ($)(2)		Non-Equity Incentive Plan Compensation ($)(3)		All Other Compensation ($)(4)		Total ($)
Lee Roy Mitchell		2019		1,000,001				1,414,002		24,089		2,438,092
Chairman of the Board		2018		975,000		-		1,036,426		23,900		2,035,326
		2017		958,645		-		1,426,464		21,586		2,406,695
Mark Zoradi		2019		1,100,000		3,099,012		1,944,250		165,517		6,308,779
Chief Executive Officer		2018		1,000,000		3,049,518		1,063,000		132,738		5,245,256
		2017		950,000		2,114,475		1,320,500		104,845		4,489,820
Sean Gamble Chief Operating Officer & Chief Financial Officer		2019		625,000		1,119,263		837,562		107,773		2,689,598
		2018		600,000		1,186,109		617,072		61,796		2,464,977
		2017		525,000		779,015		664,020		47,280		2,015,315
Michael Cavalier		2019		540,000		833,712		723,654		108,139		2,205,505
Executive Vice President – General Counsel & Secretary		2018		525,000		918,064		539,938		123,311		2,106,313
		2017		500,000		667,666		632,400		96,969		1,897,035
Valmir Fernandes President – Cinemark International		2019		540,000		698,698		615,762		109,796		1,964,256
		2018		525,000		795,705		357,000		128,448		1,806,153
		2017		508,000		628,178		538,455		103,858		1,778,491

 

(1)	See Executive Compensation Components-Base Salary for a discussion of how base salary is determined. See 2019 Compensation Mix for the percentage of 2019 target compensation paid as base salary.

 

(2)

The reported numbers reflect the aggregate grant date fair values of the restricted stock and the restricted stock units at target as the most probable outcome, computed in accordance with FASB ASC Topic 718. The amounts shown exclude the impact of estimated forfeitures. See Note 16 to the Company’s 2019 Form 10-K for a discussion of the assumptions used in determining the grant date fair values of these long-term equity incentive awards, including forfeiture assumptions and the period over which the Company will recognize compensation expense for such awards.

Mr. Mitchell was not awarded any equity due to his substantial equity ownership in the Company.

The grant date fair values were calculated based upon the closing price of Common Stock on February 19, 2019 of $36.77, February 19, 2018 of $39.03 and February 14, 2017 of $42.37 per share.

As required by the rules of the SEC, the table below provides the grant date fair values of the restricted stock units at the maximum level of payment. However, as certified by the Compensation Committee, only 96% and 105% of the target opportunity of the restricted stock units awarded in 2017 and 2018 respectively, shall vest.

 

Name		2019								2018								2017
Lee Roy Mitchell			-								-								-
Mark Zoradi			$                4,019,365								$            2,812,424								$            2,378,800
Sean Gamble			$                1,131,781								$               944,955								$               584,261
Mike Cavalier			$                   838,172								$               708,746								$               500,750
Valmir Fernandes			$                   698,483								$               590,602								$               471,133

The terms of the restricted stock and restricted stock units are discussed under Executive Compensation Components-Long-term Equity Incentive Compensation and the footnote disclosures to the Grants of Plan-Based Awards in 2019 table. See also Compensation Mix for the percentage of target total compensation for 2019 granted as long-term equity incentive awards.

 

(3)	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

 

 

			42