SeaWorld Entertainment awards $6.8 million in stock bonuses to executives after furloughing 90% of the company

I'm not at all opposed to executive bonuses, when they've achieved goals and made the company and its employees successful, but this is insanely ****ed up. They haven't actually done anything. Reward them for successfully ramping up the company and getting people working again when the parks reopen. The optics of this are insanely bad, especially for all of the people currently not working.

I love SeaWorld as an institution, and have donated to the foundation, but this board has absolutely got to go. They're a bunch of asshats.

One would think that Seaworld would avoid as much negative PR as possible since it has done damage to them in the past. One would think.....

I think we found the reason the most-recent CEO left.

Our next trip to Orlando was going to include a trip to Sea World. I'm rethinking that now. This is just bad behavior.

I could be wrong but didn’t I just see the Disney execs do the same thing? Give up a 3M salary but still keeping 23M in bonus all while furloughing most of the full time employees?

I don't know about that, but I do know Disney at least had the decency to continue paying for medical benefits, which Sea World opted not to.

Mulfinator said:

Our next trip to Orlando was going to include a trip to Sea World. I'm rethinking that now. This is just bad behavior.

I wouldn't punish the company itself, and by extension its workers.

I thought so. Different circumstances of course, but shouldn’t it be the other way around, keep the salary but cut the bonus?

https://variety.com/2020/tv/news/bob-iger-disney-bob-chapek-salary-...203548824/

https://www.hollywoodreporter.com/news/disney-executives-pushing-ba...ts-1288522

Mulfinator said:

Our next trip to Orlando was going to include a trip to Sea World. I'm rethinking that now. This is just bad behavior.

No its a great park, I promise. Don't spite the park based on the simpletons that call the shots. Jeff is right, the board needs to take several seats.

To be clear, there is nothing I can find that indicates that the Disney executives were given additional bonuses beyond what was already promised pre-corona. This is from March 30th:

The salary waivers will not modify other rights under the applicable employment agreements determined by reference to the officer’s base salary; such provisions will continue to be applied based on the stated base salary payable under the applicable agreement. Additionally, except for the amount of compensation for paid time off, the reductions are not intended to reduce any Company employee benefit provided to such officers that is determined by reference to the base salary payable, except as may be required at law.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1744489/00017444892...200330.htm

However, SeaWorld's board thought it appropriate to make the decision to award bonuses on April 12th. And you'll never guess who is the chair of the Compensation Committee... Scott Ross.

On April 12, 2020, in connection with a review of compensation matters, the Compensation Committee of the Board of Directors of SeaWorld Entertainment, Inc. (the “Company”), approved certain equity awards

Thinking this is the only way they could get the people to step up. With how volatile the company is I'm surprised anyone would step up into those roles. And it seems that these Stocks don't mature till they have been in their roles for 2 years, so if they leave the position early they get nothing.

Sounds like a bribe to me.

No, they half-vest in a year. Any idiot can endure that for a year and hide out. As someone currently working, I don't even feel good about getting this cash from the feds (I'm just going to save it, because there's nothing to spend it on anyway... it stimulates nothing), but I could not in good conscience takes a bonus at a time when the company has mostly ceased to operate.

I hope the positions funded by the foundation endowment continue to get paid.

Its bad optics. Doesn't impact company cash so its not like the $6.8 million stock bonus award could have been used to pay employees. But from a PR perspective people won't understand that.

Comp for a lot of execs at large public companies is mostly stock based. So cutting your cash salary looks good from a PR perspective (and helps the company a little from a cash flow perspective). But from a total comp perspective, you haven't hit your comp that much. And if you get awards when stock prices are low, your comp will be huge assuming stock prices return to levels from a couple months ago (in some instances far exceeding what you gave up in cash comp). SW award would have been about $20 million a couple months ago.

There are a lot of people who don't have $500 in savings. Something like 60-65%. For them its not as stimulus to buy a new tv or car, its being able to pay rent or buy food when income is reduced. Though a lot of people getting the checks will no doubt save them.

Jeff said:

Mulfinator said:

Our next trip to Orlando was going to include a trip to Sea World. I'm rethinking that now. This is just bad behavior.

I wouldn't punish the company itself, and by extension its workers.

I totally get that. But how do you as a consumer demonstrate your displeasure with the decision of the board of a company? Write a strongly worded letter?

Yes! The Facebook campaign Stand With SeaWorld is, surprisingly, getting serious attention. The #RemoveScottRoss movement is gaining momentum. I'm curious to know if there are larger institutional investors paying attention, because there's an opportunity for them as well.

Regarding equity executive compensation, I don't entirely agree. Having worked for a lot of younger companies where Joe Lineworker gets equity, you can just as easily make those grants to line workers as you can executives. The cost to the company is irrelevant: Those cats are getting compensated for literally not doing anything of value beyond participation. That's a moral issue.

Sure you can grant equity comp to line workers. Often makes a lot of sense. But here the $6.8 million would have amounted to about $300 per employee. In stock that vests over the next 2 years. Can't buy food or pay rent with non-vested stock rights. Even if cost to the company is irrelevant (its not, you have to have money to pay out cash) its $150/employee/year. If you are looking at the stock award and saying it should have gone to employees its more optics than real. And no doubt the optics are bad.

Disney (and other public companies) are engaging in optics on the other side. Iger's is taking no salary this year. Last year his salary was $3 million. Equity comp was $30 million plus additional non-equity comp. Depending on how his non-salary comp is calculated he could well make multiple times the salary he won't receive this year when the stock recovers. And other companies are doing the same thing. Optics in the other direction.

SeaWorld is effectively offering non-cash stay bonuses. Whether anyone should stay is another question. But it looks like the parks may well be closed for the rest of 2020 and some part of 2021 (possibly all of it). And whenever they re-open, its not clear what crowds will be like. How many people will be skipping places with large crowds of people that involve (for many) crowded flights on airplanes with another group of people? Not clear. Maybe you just let everyone go and put closed sign on the Shamu statues out front.

Yeah, nothing you're saying changes my opinion. It's a terrible and inept board regardless.

Where did the 6.8 million in stock come from? New issuance? That will just further dilute the EPS and make the company look even worse in addition to diluted ownership for existing holders.

Companies typically reserve shares for issuance in connection with stock comp plans. Cashless issues (or any other below market issuances) are dilutive. Cash comp is too to a certain degree (could have used the cash to make investments in the business such as capex). Just reality. Not something unique to any specific company.

Jeff--I don't expect anything anyone says to change your opinion. On anything.