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Table of Contents

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 paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 


Table of Contents

 

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Table of Contents

 

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LETTER FROM OUR PRESIDENT AND CEO

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Dear Fellow Stockholders:

 

We invite you to join us at our 2024 Annual Meeting of stockholders. Once again, our meeting this year will be held in person at 3800 Dallas Parkway, Plano, Texas 75093.

2023 represented another year of meaningful post-pandemic recovery for the theatrical exhibition industry. Consumer enthusiasm for larger-than-life cinematic experiences continued to thrive and drove North American industry box office up 21% versus 2022 to $9.1 billion dollars as new film release volume further rebounded and studios remained committed to theatrical releases. Furthermore, significant growth in content from streaming companies as well as non-traditional suppliers, including a wide range of record-breaking international, concert and faith-based films, cumulatively amassed over $1 billion dollars of North American box office.

As our overall industry rebounded further in 2023, our sensational team once again delivered results that outperformed our peers, while making excellent strides in the continued progression of our strategic growth and productivity initiatives. During the year, we entertained 210 million guests and generated $3.1 billion dollars of revenue that increased 25% year-over-year, including all-time high concession sales. Our Adjusted EBITDA also grew 77% to $594 million dollars with a 19.4% margin rate that represented 570 basis points of margin expansion. Moreover, our strong operating results yielded free cash flow of $295 million and positive net cash generation of $175 million after retiring more than $100 million of COVID-related debt.

Looking ahead, while six months of film production work stoppage associated with 2023’s Hollywood strikes are expected to cause a temporary headwind in 2024, wide release volume in 2025 and beyond looks poised to quickly spring back to a positive recovery trajectory based on reactivated production activity, as well as plans expressed by the major studios, streamers and non-traditional content providers. As film volume starts to rebuild once again, Cinemark remains well-situated to fully capitalize on that upside as a result of our solid financial and operational foundation, advantaged market position and the myriad of initiatives we continue to advance to further strengthen our company.

Our distinct ability to evolve for future success while delivering outstanding results is a byproduct of the steadfast leadership of our executive team, the sound oversight of our Board of Directors, and the disciplined operational execution of our approximate 27,000 global team members who span 14 countries.

Thank you for your continued support, trust, and investment in Cinemark. We look forward to your participation 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,

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Sean Gamble

President and Chief Executive Officer

* Cinemark has presented supplemental non-GAAP financial measures as part of this Proxy Statement. Definitions of each non-GAAP measure and a reconciliation of each non-GAAP financial measure with the most comparable GAAP measure are set forth in Annex A. The non-GAAP financial measures presented in this Proxy Statement should not be considered as alternative measures for the most directly-comparable GAAP financial measures. The non-GAAP financial measures presented in this Proxy Statement are used by management to monitor the financial performance of the business, inform business decision-making and forecast future results.


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Notice of Annual Meeting

of Stockholders

 

DATE & TIME

Wednesday,

May 15, 2024

8:30 a.m.

Central Daylight Time

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PLACE

Cinemark West Plano and XD Theater

3800 Dallas Parkway

Plano, Texas 75093

 

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RECORD DATE

All stockholders of record of the Company’s common stock at the close of business on March 20, 2024, are entitled to vote at the meeting and any postponements or adjournments of the meeting.

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Voting Matters

 

Board’s

Recommendation

Page

Reference

1      Election of Class II directors, each for a term that expires in 2027.

FOR each

nominee

Page 4

3

2     Advisory vote to approve compensation of named

 executive officers.

FOR

Page 22

3     Ratification of the appointment of Deloitte & Touche LLP as our

independent registered public accounting firm.

FOR

Page 47

 

 

 

4 Vote to approve the Cinemark Holdings, Inc. Long-Term Incentive Plan.

FOR

Page 48

 

We are holding our 2024 Annual Meeting of Stockholders (the “Annual Meeting”).

You will be able to attend the Annual Meeting in person and vote your shares. Whether or not you plan to attend the Annual Meeting, it is important that your shares are represented. Therefore, we urge you to promptly vote and submit your proxy
in advance of the Annual Meeting.

By order of the Board of Directors,

 

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Michael Cavalier

EVP – General Counsel & Business Affairs,

Secretary

VOTING YOUR SHARES

Your vote is important! Please act as soon as possible to vote your shares, even if you plan to attend the Annual Meeting in person. If you are a beneficial stockholder, your broker will NOT be able to vote your shares with respect to the election of directors and most of the other matters presented during the meeting unless you have given your broker specific instructions to do so. Stockholders of record can vote by:

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TELEPHONE

1.866.503.2691

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INTERNET

www.proxypush.com/cnk

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MAIL

Return the signed proxy card.

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Table of Contents

 

Table of Contents

 

2023 Performance Highlights

1

 

Compensation Discussion and Analysis

23

 

 

 

Named Executive Officers

23

Proxy Statement Summary

3

 

Compensation Practices

24

Item 1: Election of Directors

3

 

2023 Say-on-Pay Result

24

Item 2: Advisory Vote to Approve Compensation

 

 

Our Compensation Philosophy

24

of Named Executive Officers

3

 

Principal Elements of 2023 Executive

 

Item 3: Ratification of Independent Registered

 

 

Compensation

25

Public Accounting Firm

4

 

Base Salary

26

Item 4: Vote to Approve the Cinemark Holdings,

 

 

 

 

Inc. 2024 Long Term Incentive Plan

4

 

Short-Term Performance-Based Incentive

 

 

 

 

Awards

26

Corporate Governance

4

 

Introduction

26

Item 1: Election of Class II Directors

4

 

2023 STIP Award Opportunities

26

Board Composition

5

 

2023 STIP Performance Goals and Results

27

Director Skills and Qualifications

5

 

2023 STIP Payouts

28

Class II Directors Standing For Election

6

 

 

 

 

 

 

Annual Equity Incentive Awards

28

Director Nomination Process

12

 

Introduction

28

Annual Board Assessment

12

 

2023 Annual Equity Incentive Awards

29

Director Nomination Agreement

12

 

 

 

Identification and Consideration of New Nominee

12

 

Compensation Setting Process

29

 

 

 

Roles and Responsibilities

29

Board and Committee Structure

12

 

Competitive Market Positioning

30

Independent Non-Executive Chairman

12

 

 

 

Separation of Chairman and CEO Roles

12

 

Additional Compensation Practices

31

Board Independence

13

 

Stock Ownership Guidelines

31

 

 

 

Compensation Risk Assessment

31

Board Committees

13

 

Compensation Committee Report

32

Audit Committee

13

 

 

 

Governance Committee

14

 

Executive Compensation

32

Compensation Committee

15

 

Summary Compensation Table for 2023

32

Strategic Planning Committee

15

 

Grants of Plan-Based Awards in 2023

34

Compensation Committee Interlocks and

 

 

Outstanding Equity Awards at Fiscal Year-End 2023

35

Insider Participation

16

 

Stock Option Exercises and Stock Vested in 2023

36

Meetings and Attendance

16

 

Discussion of the Terms of the Employment

 

Director Development and Engagement

16

 

Agreements

36

 

 

 

Potential Payments upon Termination by Company

 

Key Areas of Board Oversight

16

 

without cause or by Executive for Good Reason

38

Strategic Oversight

16

 

Potential Payments upon Termination for Cause

39

Risk Oversight

17

 

Potential Payments upon Termination due to

 

ESG Oversight

17

 

Change in Control

39

Succession Planning and Talent Development

17

 

Potential Payments upon Termination due to Death

 

Shareholder Engagement

17

 

or Disability

40

Responsiveness to Shareholder Feedback

17

 

Securities Authorized for Issuance under Equity

 

Corporate Governance Policies and Charters

18

 

Compensation Plans

41

Code of Business Conduct and Ethics

18

 

CEO Pay Ratio for 2023

42

Stockholder Communications with the Board

18

 

Pay versus Performance Table

42

 

 

 

 

 

Director Compensation

19

 

Security Ownership of Certain Beneficial Owners

 

 

 

 

and Management

45

Commitment to Sustainability

20

 

Delinquent Section 16(a) Reports

46

 

 

 

 

 

Item 2: Advisory Vote to Approve Compensation

 

 

 

 

of Named Executive Officers

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Table of Contents

 

 

 

 

 

 

Item 3: Ratification of Independent Registered

 

 

Additional Information

58

Public Accounting Firm

47

 

Stockholders sharing a common address

58

Audit Committee Report

47

 

Incorporation by reference

58

 

 

 

 

 

Item 4: Vote to Approve the Cinemark Holdings,

 

 

Other Matters

58

Inc. 2024 Long-Term Incentive Plan

48

 

 

 

 

 

 

Availability of Report on Form 10-K

58

Certain Relationships and Related Party

 

 

 

 

Transactions

53

 

 

 

 

 

 

 

 

General Information

54

 

 

 

 

 

 

Annex A: Supplemental Financial Information

A-1

Deadline for Stockholder Proposals and

 

 

 

 

Stockholder Director Nominations for the 2024

 

 

Annex B: Cinemark Holdings, Inc. 2024 Long-

 

Annual Meeting

57

 

Term Incentive Program

B-1

 

 

 

 

 

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Table of Contents

 

ATTEND THE ANNUAL MEETING

You may attend the Annual Meeting in person or vote your shares electronically at the website listed below using the control number included in your Notice of Internet Availability of Proxy Materials ("Notice") on your proxy card or on any additional voting instructions accompanying these proxy materials.

The Notice will first be sent to stockholders, and this proxy statement and the form of proxy relating to our 2024 Annual Meeting will first be made available to stockholders, on or about April 1, 2024. In accordance with SEC rules, the website www.proxydocs.com/cnk provides complete anonymity with respect to stockholders accessing the website.

LOGISTICS

The Annual Meeting will begin at approximately 8:30 a.m. Central Daylight Time, with registration opening at 8:15 a.m., on Wednesday, May 15, 2024.

 

 

2023 Performance Highlights

Cinemark delivered 2023 results that once again meaningfully surpassed our industry and peer performance through diligent operational execution and the further advancement of our strategic initiatives. At the same time, we made excellent strides further strengthening our balance sheet while continuing to evolve Cinemark for ongoing success.

Some of our significant 2023 accomplishments include:

Continued to effectively navigate our industry’s ongoing recovery

Actively managed dynamic fluctuations in film release volume, inflationary cost pressures and competitive landscape to deliver strong outperforming results.
Generated revenue of $3.1 billion that increased 25% year-over-year and included our highest concession sales of all-time, which exceeded 2019 by 3%.
Materially advanced financial recovery delivering $594 million of Adjusted EBITDA that was within 80% of 2019 on 25% less attendance and included a strong 19.4% Adjusted EBITDA margin that expanded 570 basis points year-over-year.
Achieved our second most profitable quarter in the history of our company in the second quarter, as well as our most profitable third quarter ever.
Produced $295 million of free cash flow with positive net cash generation of $175 million after retiring $100 million of COVID-related debt; ended the year with a strong cash position of $849 million.

Expanded our content pipeline and audiences

Actively collaborated with our traditional studio partners to successfully release their films while pursuing new sources of content to broaden our consumer base; generated a record 14% of domestic box office from non-traditional titles.
Meaningfully increased our marketing and communication impact through extended digital, social, and email reach while further enhancing personalization capabilities and promotional actions.
Further advanced our global loyalty programs, increasing membership by nearly 20% in the U.S. and by more than 45% in Latin America; grew Movie Club, our paid U.S. subscription tier, 13% during the year to over 1.2 million members who represented 24% of our 2023 box office.
Leaned further into premium amenities and achieved all-time high XD premium large format and D-BOX motion seat revenues that were up 13% and 87%, respectively, versus 2019.
Maintained 99.97% global screen uptime across more than 9.8 million showtimes.
Earned guest satisfaction scores over 95% with 2% pts improvement in the highly satisfied category.
Sustained market share gains that exceeded our pre-pandemic results by more than 100 basis points and surpassed industry recovery relative to 2019 by 700 basis points domestically and 600 basis points internationally.

 

 

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1

 


Table of Contents

 

Further evolved Cinemark for future success

Continued advancing premium experiences, including DBOX motion seats, XD premium large format auditoriums, recliners, and laser projection technology which now covers approximately 15% of our global circuit.
Further optimized our global circuit through the reactivation of our new build development pipeline, accretive closures, execution of a management deal to operate four theaters on behalf of EPR properties, and the launch of a new family entertainment center concept.
Strengthened pricing analytics resources and capabilities to enhance data-driven elasticity insights and decisions.
Drove significant enhancements in concessions by expanding the variety of selections we offer while reducing purchase friction via new space management layouts and the advancement of our mobile-ordering platform which realized a 32% year-over-year increase in concession sales.
Continued to roll-out our multi-phased initiative to refresh and modernize our Cinemark brand.
Further enhanced productivity tools related to operating hours, show time scheduling, procurement strategies, and overall workforce management and labor practices.
Strengthened employee development resources, including career planning support, learning platforms, Continuous Improvement training, and project management tools.

 

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2

 


Table of Contents

 

Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. You should read this entire proxy statement and our Annual Report on Form 10-K before voting.

 

ITEM

Election of Directors

1

The Board recommends a vote FOR each director nominee.

See page 4

 

 

Name and Principal Occupation

Independent

Age

Director Since

Committee Membership

 

 

 

 

 

AC

CC

NGC

SPC

 

 

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Darcy Antonellis

 

 

 

61

 

2015

 

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Chair

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Carlos Sepulveda

 

66

2007

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Mark Zoradi

 

 

70

2015

 

 

 

 

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AC = Audit Committee

CC = Compensation Committee

NGC = Nominating & Corporate Governance Committee

SPC = Strategic Planning Committee

 

ITEM

2

Advisory Vote to Approve Compensation of Named Executive Officers

The Board recommends a vote FOR this proposal.

See page 22

 

We structured our executive compensation program to attract, motivate, reward and retain high caliber talent who will lead the Company to increase our competitive advantage and deliver sustainable profitability. This includes building a solid foundation for long-term growth while consistently achieving strong near-term results. To ensure that our key executives are incentivized appropriately to deliver our mission and vision, the Compensation Committee designed an executive compensation program that strongly aligns with the interests of stockholders in creating long-term value by directly linking pay to Company and individual performance.

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We designed the mix of pay elements to motivate our executives to drive the Company to develop and evolve by offering both short-term and long-term incentive awards that are both time and performance-based, each of which aligns the interests of our executives with our stockholders and encourages focus on long-term growth. As illustrated above, a considerable portion of the compensation payable to our named executive officers is “pay-at-risk.”

 

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3

 


Table of Contents

 

 

 

ITEM

3

Ratification of Independent Registered Public Accounting Firm

The Board recommends a vote FOR this proposal.

See page 47

 

The Audit Committee evaluates the independence of Deloitte & Touche LLP and its fees annually. The Board believes the continued retention of Deloitte & Touche LLP is in the best interests of the Company and its stockholders.

 

 

ITEM

4

Approve the Cinemark Holdings, Inc. 2024 Long-Term Incentive Plan

The Board recommends a vote FOR this proposal.

See page 48

 

 

CORPORATE GOVERNANCE

Item 1: Election of Class II Directors

Our Board is comprised of 11 members, the majority of whom are independent. The size of the Board may be fixed from time to time exclusively by our Board as provided in our Certificate of Incorporation. Our Board consists of three classes of directors, designated as Class I, Class II and Class III. The members of each class are elected to serve a three-year term, with the term of each class ending in successive years.

The term of the current Class II directors, Ms. Antonellis and Messrs. Sepulveda and Zoradi, expire at the Annual Meeting. All nominees have been recommended by the Nominating and Corporate Governance Committee (“Governance Committee”) and nominated by the Board for re-election at the Annual Meeting.

Ms. Antonellis and Messrs. Sepulveda and Zoradi have consented to be nominated for re-election to the Board as a Class II director. If elected, they will serve on the Board for a three-year term expiring on the date of our 2027 annual meeting of stockholders. At this time, we have no reason to believe that any nominee will be unable or unwilling to serve if elected. However, should any of them become unable or unwilling to serve before the Annual Meeting, your proxy card authorizes us to vote for a replacement nominee if the Board names one.

 

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The Board recommends a vote FOR each director nominee.

 

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4

 


Table of Contents

 

 

BOARD COMPOSITION

Director Skills and Qualifications

The nominees and continuing members of the Board collectively possess the knowledge, skills and unique perspectives needed to successfully guide our Company toward continued sustainable growth. They possess broad-based business knowledge, outstanding achievement in their professional careers, a commitment to ethical values, executive leadership and meet the Company’s articulated director qualifications, including independence, accountability, integrity, sound judgment in areas relevant to the Company’s businesses and diversity of background. In addition, our nominees and directors have demonstrated experience and expertise in a number of different substantive areas relevant to the Company, such as theater and retail operations; e-commerce; marketing and brand management; strategic planning; real estate; risk management; legal, compliance and regulatory matters; mergers and acquisitions; and finance. Our Board reflects a diversity of experience in varying substantive areas relevant to our operations and industry, as well as background, gender, race and age. The following summarizes certain aspects of the Board’s current composition:

 

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The following matrix provides information regarding the members of our Board, including certain types of skills, experience and attributes possessed that our Board believes are relevant to our business. The matrix does not encompass all of the skills or experience of our directors.

 

Skill/Experience Matrix

Experience

Director

 

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Financial Literacy

 

 

Financial Management/Corporate Finance

Accounting and Financial Oversight

 

 

 

 

 

Corporate Governance

 

 

 

 

 

CEO Experience

 

 

 

 

Executive Experience

 

 

 

 

 

Industry Knowledge

 

 

 

 

 

Mergers and Acquisitions

 

 

 

 

 

 

Other Public Company Board Service

 

 

 

 

Leadership

Risk Management

Strategic Vision and Planning

Information Technology and Cybersecurity

 

 

 

 

 

 

 

 

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5

 


Table of Contents

 

 

 

CLASS II DIRECTORS
STANDING FOR ELECTION

 

Darcy Antonellis

 

 

 

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Director Since: 2015

 

Nominee of: Board

 

Board Committees: Audit Committee; Compensation Committee; Strategic Planning Committee (Chair)

 

Age: 61

 

Other Public Company Boards: 2

 

Skills and Qualifications

 

CEO and executive experience
NACD Cybersecurity Oversight Certified
Critical technology and cybersecurity experience
Accounting and financial management expertise
Media-related technologies, operations and content monetization expertise

 

Other Current Board Experience

 

Xperi
Bango PLC

 

Previous Board Experience

 

Not Applicable

 

Professional Highlights

 

Since June 2023, Ms. Antonellis serves as Operating Advisor at ABS Capital Partners, a private equity firm focused on emerging growth software and tech-enabled services with data foundations. From September 2021 until March 2023, Ms. Antonellis served as Executive Advisor, Amdocs Inc. (NASDAQ: DOX), a leading software and services company to communications, media, financial and digital enterprises. From February 2018 through August 2021, Ms. Antonellis served as Division President, Amdocs Inc. and CEO, Vubiquity Inc. a subsidiary of Amdocs Inc. (acquired by Amdocs 2018). From January 2014 until February 2018, Ms. Antonellis served as CEO, Vubiquity Inc. From June 1998 until December 2013, Ms. Antonellis held a number of positions at Warner Bros Entertainment Inc. including President of Technical Operations and Chief Technology Officer. Ms. Antonellis is NACD.DC Directorship Certified.

 

Carlos Sepulveda

 

 

 

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Director Since: 2007

 

Nominee of: Mitchell Investors

 

Board Committees: Audit Committee; Compensation Committee

 

Chairman

 

Age: 66

 

Other Public Company Boards: 1

Skills and Qualifications

 

CEO and executive experience
Extensive public accounting experience; certified public accountant
Accounting and financial oversight experience
Strategic planning and management expertise

 

Other Current Board Experience

 

Triumph Financial

 

Previous Board Experience

 

Matador Resources Company

 

Professional Highlights

 

Since its inception in 2010, Mr. Sepulveda has been the Chairman of the board of directors of Triumph Financial (NASDAQ: TFIN), a financial holding company, formerly known as Triumph Bancorp, offering a diversified line of payments, factoring and banking services. From 2004 to 2013, Mr. Sepulveda was the President and CEO of Interstate Battery System International, Inc. (Interstate Batteries), a company that supplies automotive, commercial and industrial batteries, and its Executive Vice President from 1993 until 2004. Prior to joining Interstate Batteries, Mr. Sepulveda was an audit partner at KPMG LLP in Austin, New York and San Francisco for 11 years.

 

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Mark Zoradi

 

 

 

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Director Since: 2015

 

Nominee of: Board

 

Board Committees: Strategic Planning Committee

 

Age: 70

 

Other Public Company Boards: None

 

Skills and Qualifications

 

CEO and executive experience
Veteran motion picture executive with a background in distribution and exhibition
Wealth of knowledge regarding strategic partnerships within the exhibition industry and exhibitor relationships with movie studios
Management and oversight experience at large public companies within the industry

 

Other Current Board Experience

 

Not Applicable

 

Previous Board Experience

 

National CineMedia, Inc

 

 

Professional Highlights

 

Mr. Zoradi served as our CEO from August 2015 to December 31, 2021. Mr. Zoradi spent 30 years at The Walt Disney Company, a major motion picture studio, including serving as the President of Walt Disney Studios Motion Picture Group. Prior to that, Mr. Zoradi served in a variety of positions of increasing responsibility with The Walt Disney Company, including as the General Manager of Buena Vista Television and President of Buena Vista International with responsibility for the international theatrical and home entertainment marketing and distribution of Disney, Touchstone and Pixar films. Mr. Zoradi also served as the President and Chief Operating Officer (COO) of Dick Cook Studios from January 2011 until July 2014 and the COO of Dreamworks Animation SKG, Inc. from August 2014 until January 2015.

 

 

 

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CLASS III DIRECTOR NOMINEES
TERM EXPIRING 2025

 

Benjamin Chereskin

 

 

 

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Director Since: 2004

 

Nominee of: Board

 

Board Committees: Compensation Committee; Strategic Planning Committee

 

Age: 65

 

Other Public Company Boards: 1

 

Skills and Qualifications

 

Strategic planning and finance growth opportunities
Extensive knowledge and experience in corporate finance, mergers and acquisitions
Executive compensation experience

 

 

Other Current Board Experience

Not Applicable

 

 

Previous Board Experience

 

Boulder Brands, Inc.
CDW Corporation

 

Professional Highlights

 

Mr. Chereskin is President of Profile Capital Management LLC (Profile Management), an investment management firm, which he founded in October 2009. Prior to founding Profile Management, Mr. Chereskin was a Managing Director and Member of Madison Dearborn Partners, LLC, a private equity firm, from 1993 until October 2009, having co-founded the firm in 1993.

 

 

Kevin Mitchell

 

 

 

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Director Since: 2023

 

Nominee of: Mitchell Investors

 

Board Committees: Strategic Planning Committee

 

Age: 55

 

Other Public Company Boards: None

 

Skills and Qualifications

 

CEO experience
Depth of experience in the motion picture industry
Real estate expertise

 

Other Current Board Experience

 

Not Applicable

 

Previous Board Experience

 

Not Applicable

Professional Highlights

 

Since May 2023, Mr. Mitchell has served as a managing member of Showbiz Direct Distribution. In 2007, Mr. Mitchell founded and served as CEO of ShowBiz Cinemas, a bowling, movies and family entertainment concept which he sold in December 2021. Mr. Mitchell has over 30 years of experience in the motion picture theater industry. Mr. Mitchell has also served as an advisory board member for the National Association of Theatre Owners and has served on the Board of Will Rogers Motion Picture Pioneers Foundation, Variety the Children’s Charity of Texas and Chuck Norris’ Kickstart Kids.

 

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Ray Syufy

 

 

 

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Director Since: 2006

 

Nominee of: Board

 

Board Committees: Strategic Planning Committee

 

Age: 61

 

Other Public Company Boards: None

 

Skills and Qualifications

 

CEO experience
Deep knowledge of the motion picture industry
Strategic planning expertise, particularly with respect to competition from other forms of entertainment
Operational expertise
Real estate expertise

 

Other Current Board Experience

 

Not Applicable

 

Previous Board Experience

 

Not Applicable

Professional Highlights

 

Mr. Syufy began working for Century Theatres, Inc. (Century Theatres), a regional movie exhibitor, in 1977, and held positions in each of the major departments within Century Theatres. In 1994, Mr. Syufy was named President of Century Theatres and was later appointed CEO and Chairman of the board of directors. Mr. Syufy resigned as an officer and director of Century Theatres upon the consummation of our acquisition in 2006. Since then, Mr. Syufy has presided as CEO of Syufy Enterprises, Inc. (Syufy Enterprises) a retail and real estate holding company with operations in California, Nevada, Arizona, Colorado, and Texas. Mr. Syufy is currently the Chairman of NATO CA/NV.

 

 

Sean Gamble

 

 

 

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Director Since: 2022

 

Nominee of: Board

 

Board Committees: None

 

Age: 49

 

Other Public Company Boards: None

 

Skills and Qualifications

 

Veteran motion picture executive with distribution and exhibition experience
Management and executive experience
Strategic planning experience

 

Other Current Board Experience

 

Not Applicable

 

Previous Board Experience

 

Not Applicable

Professional Highlights

 

Mr. Gamble has served as our President and Chief Executive Officer since January 2022. Mr. Gamble has been our President since July 28, 2021, and our Chief Operating Officer since January 2018. Mr. Gamble was our Executive Vice President and Chief Financial Officer from August 2014 until he became our CEO in 2022. Prior to joining Cinemark, Mr. Gamble worked for the Comcast Corporation as Executive Vice President and Chief Financial Officer of Universal Pictures within NBCUniversal from February 2009 to April 2014. He joined Comcast after 15 years at the General Electric Company where he held multiple senior leadership positions, including CFO of GE Oil & Gas’ equipment business based in Florence, Italy, from May 2007 to January 2009.

 

 

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CLASS I DIRECTORS
TERM EXPIRING 2026

 

Nancy Loewe

 

 

 

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Director Since: 2017

 

Nominee of: Board

 

Board Committees: Audit Committee (Chair and Financial Expert); Governance Committee

 

Age: 56

 

Other Public Company Boards: None

 

Skills and Qualifications

 

CFO and executive experience
Accounting and financial management expertise
Risk oversight experience
Previous large public company management and oversight experience

 

Other Current Board Experience

 

Not Applicable

 

Previous Board Experience

Not Applicable

 

Professional Highlights

 

Ms. Loewe has been the Chief Financial Officer (CFO) of CelLink since November 2022. Prior to that, Ms. Loewe served as the CFO of Weyerhaeuser Company, one of the world’s largest private owners of timberlands; a Senior Vice President - Finance of Visa, Inc., a multinational financial services corporation; as the CFO for Kimberly-Clark International and the Chief Strategy Officer and Global Treasurer for Kimberly-Clark Corporation, a multinational personal care corporation. She has also served as Vice President and CFO of Frito Lay North America. Additionally, Ms. Loewe held numerous positions during her 20-year tenure at General Electric, inside and outside the U.S., including Vice President - Strategic Transactions & Cash, as well as CFO for varying business units, such as Plastics Asia, Healthcare, and Consumer & Industrial.

 

 

Steven Rosenberg

 

 

 

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Director Since: 2008

 

Nominee of: Board

 

Board Committees: Governance Committee (Chair); Audit Committee

 

Age: 65

 

Other Public Company Boards: 1

 

Skills and Qualifications

 

Risk management, corporate governance and general management expertise
Accounting and financial management expertise
Management experience

 

Other Current Board Experience

 

Texas Capital Bancshares, Inc.

 

Previous Board Experience

PRGX Global, Inc.

 

Professional Highlights

 

Mr. Rosenberg is the Manager of SPR Ventures Inc., a private investment firm he founded in 1997. He was the President of SPR Packaging LLC, a manufacturer of flexible packaging, from 2006 to 2018.

 

 

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Enrique Senior

 

 

 

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Director Since: 2004

 

Nominee of: Board

 

Board Committees: Strategic Planning Committee

 

Age: 80

 

Other Public Company Boards: 4

 

Skills and Qualifications

 

Extensive knowledge of film, media and entertainment, and beverage industries
Strategic planning and management expertise
Executive experience

 

Other Current Board Experience

 

Groupo Televisa S.A.B.
Coca-Cola FEMSA, S.A.
Femsa S.A. de C.V.
Univision Communications

 

Previous Board Experience

Not Applicable

 

Professional Highlights

 

Mr. Senior is a Managing Director of Allen & Company LLC, a boutique investment bank, and has been employed by the firm since 1972. He has served as a financial advisor to several corporations including Coca-Cola Company, General Electric, CapCities/ABC, Columbia Pictures Tri-Star Pictures and other entertainment companies.

 

 

Nina Vaca

 

 

 

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Director Since: 2014

 

Nominee of: Board

 

Board Committees: Governance Committee; Compensation Committee (Chair)

 

Age: 52

 

Other Public Company Boards: 1

 

Skills and Qualifications

 

CEO and executive experience
Wealth of leadership and business experience particularly in information technology and e-commerce
Governance and executive compensation expertise

 

Other Current Board Experience

 

Comerica, Inc.

 

Previous Board Experience

 

Kohls, Corp.

 

Professional Highlights

 

Ms. Vaca is the founder, Chairman and CEO of the Pinnacle Group of companies, including Pinnacle Technical Resources, Inc. (together, Pinnacle) and Vaca Industries, Inc. Founded in 1996, Pinnacle is an information technology services and solutions provider.

 

 

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Director Nomination Process

Annual Board Assessment

Members of the Governance Committee review and evaluate our policies and practices with respect to the size, composition and functions of the Board at least annually. The Governance Committee also oversees an annual performance evaluation of our Board and each of its committees. The evaluation is an anonymous questionnaire that elicits information used to improve Board and committee effectiveness and assess the size and composition of the Board and its committees. The questionnaire and feedback is coordinated through an independent third-party to ensure a robust evaluation process. Feedback received from Board evaluations is discussed during Board and committee meetings.

Director Nomination Agreement

On February 15, 2023, Lee Roy Mitchell, our Founder, tendered his resignation from his position on the Board. Under the Director Nomination Agreement, which we entered into on April 9, 2007, with certain of our then stockholders, the Mitchell Investors (as defined in the Director Nomination Agreement) have a right to designate two nominees to the Board. Mr. Mitchell, as the representative of the Mitchell Investors, nominated his son, Kevin Mitchell, to fill the vacancy created by his resignation in accordance with the terms of the Director Nomination Agreement. Kevin Mitchell was appointed to fill this vacancy at the February 2023 Board meeting. Mr. Sepulveda is also a Mitchell Investors nominee.

Identification and Consideration of New Nominees

The Governance Committee policy regarding consideration of potential director nominees recognizes that choosing a director is dependent upon a number of subjective and objective criteria, many of which are difficult to categorize. The Governance Committee, therefore, has not established any minimum qualifications for a director candidate or identified any specific set of qualities or skills that it deems mandatory.

The Governance Committee will consider director candidates properly submitted by our stockholders. For more information see Deadline for Stockholder Proposals and Shareholder Director Nominations for the 2025 Annual Meeting on page 57.
The Governance Committee will take steps necessary to evaluate a prospective nominee, including, if warranted, interviews of the prospective nominee by one or more Governance Committee or Board members.
After completing this evaluation and other steps of the process, the Governance Committee will make a recommendation to the full Board as to the persons who should be nominated by the Board.
The Board then determines the nominees after considering the recommendations and report of the Governance Committee.

Board and Committee Structure

Independent Non-Executive Chairman

Carlos Sepulveda has served as the non-executive Chairman of the Board (“Chairman”) since May 2022. The Chairman has the authority to preside at all Board meetings, including executive sessions of the non-management directors and has the authority to call meetings of the directors. The Chairman serves as principal liaison between the non-management directors and Company management. In consultation with the CEO, the Chairman approves meeting schedules, agendas and the information provided to the Board. If requested by stockholders, and as appropriate, the Chairman is also available for consultation and direct communication as the Board’s liaison.

Separation of Chairman and CEO Roles

Although the Board does not have a formal policy on separation of the roles of the CEO and Chairman, we have kept these positions separate since 2007. Separating the Chairman and CEO roles allows us to develop and implement corporate strategy that is consistent with the Board’s oversight role, while facilitating strong day-to-day executive leadership.

The Board believes that its leadership structure is appropriate for Cinemark. The independence of the Board’s standing committees and the regular use of executive sessions of the non-management directors allows the Board to maintain independent oversight of risks to our business, our long-term strategies, annual operating plan, and other corporate activities.

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Board Independence

The majority of our Board is independent, with 7 of the 11 directors being independent. Our Board has determined the independence of these 7 directors by applying the New York Stock Exchange ("NYSE") listing standards’ independence test, which evaluates whether the director:

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 of a firm 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.

The Board, in coordination with our Governance Committee and the Company’s general counsel, evaluated the NYSE bright-line tests and considered the transactions between the Company and certain Board members, reported under the heading Certain Relationships and Related Party Transactions, and other relevant factors to determine the independence of the Board members. On the basis of this review, the Board 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) Mr. Syufy is not independent due to his transactions with the Company exceeding $120,000 annually, and Mr. Mitchell is not independent due to his relationship with our founder and former Chairman, Lee Roy Mitchell, (d) Messrs. Zoradi and Gamble are not independent because they are employees or former 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) Ms. Loewe and Mr. Sepulveda qualify as “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC and satisfy 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.

Board Committees

The Board has four standing committees: Audit Committee, Compensation Committee, Governance Committee and Strategic Planning Committee. The Board may from time to time establish additional committees for specific purposes.

Each member of our Audit Committee, Compensation Committee and Governance Committee meets the requirements for independence under the listing standards of the NYSE, regulations promulgated by the U.S. Securities and Exchange Commission (“SEC”) and the Company’s Corporate Governance Guidelines, as applicable. The charters for these committees are available on the Investor Relations portion of our website (http://ir.cinemark.com).

Audit Committee

2023 Meetings: 4

2023 Consents: 1

Each member of the Audit Committee satisfies the standards for independence of the NYSE and SEC as they relate to audit committees.

Members: Nancy Loewe (Chair), Darcy Antonellis, Steven Rosenberg, Carlos Sepulveda

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Roles and Responsibilities:

Ms. Loewe serves as the Chair of the Audit Committee. Both Mr. Sepulveda, the past Chair, and Ms. Loewe qualify as “audit committee financial experts” within the meaning of Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC. See Ms. Loewe’s and Mr. Sepulveda’s biographies on page 10 and page 6 respectively, for further information regarding their qualifications to be an “audit committee financial expert.”

Primary committee functions include:

assisting the Board in its oversight responsibilities regarding (i) the integrity of our financial statements, (ii) our risk management program with respect to legal and regulatory requirements, (iii) our systems of internal controls over financial reporting (iv) our implementation and effectiveness of an ethics and compliance program and (v) 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 our 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 management and Deloitte & Touche to discuss, among other items, the Company’s financial statements to be filed with the SEC, any change in significant accounting policies and its impact on the Company’s financial statements and the earnings press release related to the quarter and the year (as applicable). The Audit Committee also meets, on a periodic basis, with Deloitte & Touche in executive sessions without members of management present.

The Audit Committee oversees the Company's management of risks related to information security to ensure that adequate resources are allocated to support and maintain the Company's information security readiness. At least twice a year, management updates the Audit Committee on any potentially significant risks related to information security, current threat and mitigation and remediation tactics implemented by the Company. The Audit Committee also oversees and monitors the enterprise level risks related to ethics and compliance with the Company’s code of business conduct. Management provides to the Audit Committee, at every quarterly meeting, the top claims (as determined by management) reported through the anonymous whistleblower hotline, and provides an annual summary of claims, for both domestic and international operations, with a comparison to previous years.

The Board has also delegated the approval of 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 and material terms regardless of the dollar value of the transaction. The Audit Committee approves such related party transaction if it determines that the transaction is fair and in the best interest of the Company. See Certain Relationships and Related Party Transactions on page 53 for further details on related party transactions.

Governance Committee

2023 Meetings: 3

2023 Consents: 1

Each of the Governance Committee members satisfies the standards for independence of the NYSE.

Members: Steven Rosenberg (Chair), Nancy Loewe, Nina Vaca

Roles and Responsibilities:

Primary committee functions include:

evaluating 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 the members who are qualified to fill any vacancies on a Board committee;
advising management on succession planning for the CEO and senior management;

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developing and recommending to the Board a set of corporate governance guidelines and reassessing their adequacy 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 and recommending any proposed changes for Board 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;
reassessing the adequacy of the Governance Committee Charter on an annual basis and recommending any proposed changes for Board approval;
overseeing corporate social responsibilities and public interest issues that affect our investors and other key stakeholders; and
overseeing environmental, health and safety issues.

Compensation Committee

2023 Meetings: 4

2023 Consents: 2

Each member of the Compensation Committee satisfies the standards for independence of the NYSE as they relate to compensation committees and qualify as “non-employee directors” within the meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act.

Members: Nina Vaca (Chair), Benjamin Chereskin, Carlos Sepulveda, Darcy Antonellis

Roles and Responsibilities:

Primary committee functions include:

making recommendations to the Board on the Company’s general compensation philosophy and strategy on all matters of policy and procedures relating to executive compensation;
determining and approving the CEO’s compensation;
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;
setting performance metrics and targets;
validating and approving the achievement of performance targets under the Company’s incentive compensation plans; and
reviewing, recommending and discussing with management the CD&A section included in the Company’s annual proxy statement.

Strategic Planning Committee

2023 Meetings: 2

2023 Consents: 0

The Strategic Planning Committee is governed by the Strategic Planning Committee Charter setting forth the purpose and responsibilities of this committee.

Members: Darcy Antonellis (Chair), Benjamin Chereskin, Kevin Mitchell, Enrique Senior, Ray Syufy, Mark Zoradi

Roles and Responsibilities:

Primary committee functions include:

reviewing the key industry and market issues and external developments impacting the Company’s strategies and core competencies;
assisting management in analysis of alternative strategic options;
reviewing and evaluating material mergers and acquisitions, material capital investments, material financing activities and making recommendations to the Board regarding the same;

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identifying and assessing risks facing the Company and establishing a risk management infrastructure to address those risks;
overseeing the division of risk-related responsibilities to each applicable Board committee;
reviewing and evaluating the Company’s policies and practices with respect to risk assessment and risk management; and
reviewing and assessing the effectiveness of the Company’s enterprise-wide risk assessment processes and recommending improvements where appropriate.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently consists of Mmes. Vaca and Antonellis and Messrs. Chereskin and Sepulveda. Mmes. Vaca and Antonellis and Messrs. Chereskin and Sepulveda have never been an officer or employee of the Company or any of its subsidiaries. None of our executive officers serve or has served as a member of the board of directors, compensation committee or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our Compensation Committee.

Meetings and Attendance

During 2023, the Board met five times and acted by unanimous consent one time. Each director attended either in-person or via teleconference or video application at least 75% of the aggregate of all Board and applicable committee meetings during 2023.

Our non-management directors meet at least twice a year in executive sessions with no Company personnel present. A separate executive session of only independent directors is held at least once a year. Carlos Sepulveda presides over the executive sessions. During 2023, our non-management directors met four times and our independent directors met one time in executive sessions.

The Board strongly encourages its continuing members to attend the Annual Meeting of Stockholders. All but three of the then-current members of the Board were in attendance at the 2023 Annual Meeting of Stockholders, which was held in-person.

Director Development and Engagement

 

Continuing Director Education

We provide each Director with a membership to the National Association of Corporate Directors (NACD), which provides access to educational programs relevant to their board responsibilities or interests. Upon request, we may also cover the cost for any Director who wishes to attend programs and seminars outside of their NACD membership on topics relevant to their service as Directors. From time to time, members of management also present to the Board or its committees on new developments in areas relevant to the Company.

 

Key Areas of Board Oversight

Strategic Oversight

Throughout 2023, governance, risk management, and operational strategy continued to play critical roles in our Company. While we have made significant progress in our recovery from the COVID-19 pandemic, our ongoing recovery continues to be contingent upon several key factors, including the volume of new film content available, which has also been impacted by the recent writers’ and actors’ guild strikes, the box office performance of new film content released, the duration of the exclusive theatrical release window and evolving consumer behavior with competition from other forms of in-and-out of home entertainment. The Board plays a pivotal oversight role in our strategy and execution in the face of these and other challenges and oversees the executive team’s management of risks related to business operations, industry developments, financial controls, liquidity, employee retention, health and safety protocols and information technology operations.

The Board actively oversees the Company’s long-term business strategy to ensure that we are positioned to navigate external headwinds, including to continue our recovery from the effects of the pandemic, to increase our competitive advantage and deliver sustainable growth and profitability. The Board is continuously engaged with senior management on critical business matters relevant to the Company’s long-term strategy.

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Risk Oversight

 

The Board has responsibility for risk management oversight, although certain categories of risk may be allocated to particular committees of the Board, with the committee then reporting back to the full Board. The primary categories of risk on which the Board continually focuses include competitive, economic, operational, financial (accounting, credit, liquidity and tax), cybersecurity, legal, compliance, regulatory, compensation and reputational risks. Furthermore, the Board may from time to time establish additional committees for unique areas of risk.

 

 

The Audit Committee oversees risks related to financial reporting, internal controls, technology and cybersecurity, ethics and compliance.

 

The Compensation Committee oversees risks related to compensation policies, practices, incentive plans and talent retention.

 

The Governance Committee oversees risks associated with governance structures, policies and processes and succession planning.

 

The Strategic Planning Committee oversees and advises on risks related to alternative strategic options and industry developments.

 

Management is charged with identifying material risks in a timely manner, implementing strategies that are responsive to the Company's risk profile and specific material risk exposure, evaluating and managing risk with respect to business decision-making and promptly communicating relevant risk-related information to the Board or appropriate committee to enable them to conduct appropriate risk management oversight.

ESG Oversight

Many of our ESG efforts are managed by a cross-functional team that shapes and drives ESG strategy, tracks key performance indicators and manages the Company’s ESG initiatives. Management presents topics to the Governance Committee and our Board throughout the year. The Governance Committee serves as the primary committee assisting the Board in oversight of the Company’s ESG efforts. See Commitment to Sustainability beginning on page 20 for a description of select ESG initiatives.

Succession Planning and Talent Development

Succession planning and talent development are important at all levels in our Company. The Governance Committee oversees management’s succession plan for key positions at the senior officer level, and most importantly for the Chief Executive Officer position. At least annually, the Governance Committee reviews and advises management on succession plans for senior management and the Chief Executive Officer, including both long-term and emergency succession planning. In addition, the Chief Executive Officer provides the Governance Committee an assessment of the Company’s senior leaders and their potential to succeed at key senior management positions. Senior executives interact with our Board through formal presentations and during informal events. More broadly, the Board is updated on key initiatives for the overall workforce, including diversity and development programs.

Shareholder Engagement

We value the input and insights of our stockholders and are committed to continued engagement with our investors. As part of our proactive stockholder engagement program to ensure management and the Board understand and consider the issues that matter the most to our stockholders, we have offered meetings to our top institutional investors in each of the past five years, representing over 70% of our institutional stockholder base. In addition, we offer meetings to representatives of Glass Lewis and Institutional Shareholder Services.

During 2024, we met with all that accepted our request, totaling nearly 44% of the total shares outstanding held by institutional stockholders, in addition to representatives from Glass Lewis. Key themes discussed included our industry and Company’s recovery from COVID-19, anticipated box office implications from the Hollywood strikes, and executive compensation, as well as talent management, corporate social responsibility and sustainability following the publication of our inaugural Sustainability Report in 2023. As a result of the incremental disclosures incorporated in last year's proxy statement, we had strong Say-On-Pay (95% in favor) vote, a significant improvement from the 84% vote the year before.

Responsiveness to Shareholder Feedback

After considering feedback from stockholders gathered during the proactive engagement discussions, we have instituted the following practices and disclosures:

expanded language throughout the proxy for clarity on governance;
included more diversity disclosure regarding gender and racial composition of our Board;

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included commentary regarding succession planning and executive transition;
elaborated on compensation changes made in response to the profound impact of COVID-19 on our business;
incorporated separate performance metrics for short-term versus long-term incentives in 2022; and
provided commentary regarding performance-based compensation in 2023.

Corporate Governance Policies and Charters

The following documents make up our corporate governance framework:

Fifth Amended and Restated Corporate Governance Guidelines;
Third Amended and Restated Charter of the Audit Committee (Audit Committee Charter);
Second Amended and Restated Charter of the Governance Committee (Governance Committee Charter);
Second Amended and Restated Compensation Committee Charter (Compensation Committee Charter);
Strategic Planning Committee Charter; and
Clawback Policy.

Current copies of the above documents are available publicly on our website at https://ir.cinemark.com under the “Governance” tab.

Code of Business Conduct and Ethics

The Company’s Code of Business Conduct and Ethics applies to directors, executive officers and all of our employees and sets forth our 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 directors and executive officers that have been approved by our Board or any Board committee. During 2023, there were no amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics for any director or executive officer. The Code of Business Conduct and Ethics is available on our website at https://ir.cinemark.com under the “Governance” tab.

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 may direct such communications by writing to the:

Company Secretary

Cinemark Holdings, Inc.

3900 Dallas Parkway

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. All such communications will be reviewed initially by the Company Secretary, who 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.

 

 

 

 

 

 

 

 

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DIRECTOR COMPENSATION

2023 Director Compensation Table

 

Name

Fees Earned or
Paid in
Cash ($)

Stock Awards
($)
(1)

Total
Compensation
Actually Received
($)

Darcy Antonellis

110,000

134,998

244,998

Benjamin Chereskin

102,500

134,998

237,498

Nancy Loewe

112,500

134,998

247,498

Kevin Mitchell

85,000

134,998

219,998

Steven Rosenberg

107,500

134,998

242,498

Enrique Senior

85,000

134,998

219,998

Carlos Sepulveda

195,000

134,998

329,998

Raymond Syufy

85,000

134,998

219,998

Nina Vaca

112,500

134,998

247,498

Mark Zoradi

85,000

134,998

219,998

 

(1)
The grant date fair values were calculated in accordance with FASB ASC Topic 718. See Note 18 to the Company’s 2023 Annual Report on Form 10-K, for discussion of the assumptions used in determining the grant date fair values of these share based awards, including forfeiture assumptions and the period over which the Company will recognize compensation expense for such awards.

In accordance with the Compensation Committee Charter, the Compensation Committee, in consultation with the Governance Committee, sets the compensation of our Board members. Pearl Meyer, the Compensation Committee’s independent compensation consultant, periodically reviews and provides the Compensation Committee with a comparison between the Company’s director compensation practices and those of other similarly situated companies. The Board makes changes to its director compensation practices only upon the recommendation of the Compensation Committee and following discussion and unanimous concurrence by the full Board.

The compensation of our non-employee directors is subject to our Third Amended and Restated Non-Employee Director Compensation Policy (“Director Compensation Policy”). Under the Director Compensation Policy, a non-employee director is one who is not (i) an employee of the Company or any of our subsidiaries or (ii) an employee of any of the Company’s stockholders which has contractual rights to nominate directors. Therefore, Mr. Gamble did not receive any compensation for his services on the Board or any of its committees for 2023.

The compensation of the directors during 2023 pursuant to our Non-Employee Director Compensation Policy is as follows:

(a)
a base director retainer of $80,000;
(b)
additional retainer of $90,000 for the non-employee director who serves as the non-executive Chairman of the Board;
(c)
additional cash retainer for services on the committees as follows:

 

Committee

 

Chair ($)

 

Member ($)

Audit

 

25,000

 

12,500

Compensation

 

25,000

 

12,500

Governance

 

15,000

 

7,500

Strategic Planning

 

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, each non-employee director receives an annual grant of restricted stock valued at $135,000. The number of shares of restricted stock granted is determined by dividing $135,000 by the closing price of Common Stock on the grant date, rounded down to the nearest whole share. The grant date is typically on or around June 15. The annual stock awards vest on the first anniversary of the grant date subject to continued service to the Company through the vest date. The directors are also subject to our stock ownership guidelines and are required to retain common stock ownership five times the value of their base retainer. Our Amended and Restated 2017 Omnibus Incentive Plan (the “2017 Plan”) imposes a $1,000,000 limit on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum of (i) cash compensation and (ii) the grant date fair value of equity compensation under the 2017 Plan.

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COMMITMENT TO SUSTAINABILITY

 

Cinemark is one of the largest and most influential theatrical exhibition companies in the world with more than 500 theaters and nearly 5,800 screens in 14 countries. We are committed to creating an inclusive and respectful workplace where we support each other in reaching our full potential.

 

ESG Oversight

 

In 2022, Cinemark’s full Board established a framework to formally monitor and review environmental, social and governance matters. During 2023, Cinemark focused not just on advancing its efforts, but also on increasing transparency and communications concerning those efforts. Our executive leadership team established an internal cross-functional team that was tasked with driving continued progress in the initiatives that promote sustainability and further transparency. In 2023, the “ESG Working Group” was renamed to the “Sustainability Working Group” to reflect Cinemark’s comprehensive approach to sustainability policies, practices and goals.

 

We completed our initial assessment of sustainability priorities during 2023. This process included examining key data points requested by a range of key stakeholders, including investors, customers, employees, and ESG rating organizations and by studying industry peers. Our analysis of sustainability topics included alignment to the Sustainability Accounting Standards Board (SASB). We then drew upon subject matter expertise to collect and organize content. Against this backdrop, management determined that the three areas of focus for our comprehensive sustainability program and strategy were: (1) Environmental Responsibility; (2) Social Impact; and (3) Culture of Governance.

 

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img203233878_46.jpgENVIRONMENTAL RESPONSIBILITY

 

As part of our comprehensive approach to sustainability, Cinemark is committed to responsible environmental practices that include conservation of natural resources, pollution prevention, and waste reduction. We foster environmental responsibility with our employees and other partners by encouraging them to reduce consumption while applying an ethical approach to disposal efforts. As environmental concerns become more prevalent, we recognize the value in complying with increased regulations and applicable environmental standards.

 

Cinemark is committed to environmental sustainability in our communities, including reducing our footprint through energy efficiency measures and reducing waste through co-mingled recycling programs. Highlights of our efforts and accomplishments include:

Encouraging environmentally friendly workplace practices by supporting recycling and separation of waste throughout our facilities.
Providing over 160 free electric vehicle (EV) fast-charging stations for guests and employees, supporting our U.S. communities in living more sustainable lives.
Diverting approximately 68,000 tons of waste to recycling over the past decade.
Engaging in strategic partnerships with energy industry professionals to stay on top of upcoming opportunities in the communities in which we operate or plan to build theaters.

 

Cinemark complies with all applicable legal and regulatory requirements to control and reduce its environmental footprint. We are committed to making the necessary investments in systems and technology to ensure compliance and to meet or

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exceed these standards. We are continuously researching and designing innovative ways to boost efficiency, such as utilizing high-efficiency electrical equipment including LED and motion detector lighting and high-efficiency HVAC units. We will continue to engage with suppliers throughout our global value chain to measure and manage these impacts to conserve resources, reduce costs, and promote environmentally-responsible practices in line with our values.

 

img203233878_47.jpg SOCIAL IMPACT

 

We believe our most important asset is our team members. We continually strive to use our knowledge, talents, and resources to improve the quality of life of our communities, customers, and workforce. By developing our culture with a focus on improving social impact, we will continue to drive innovation in our company and our industry.

 

We strive to foster a culture of inclusion, so all team members are respectfully treated consistent with our culture, which was built to promote positive attitudes, strong work ethics and individual authenticity. We believe a representative workforce fosters innovation and cultivates an environment of unique and broad perspectives.

 

Our Board of Directors recognizes that a culture of equity helps us compete more effectively, sustain success, and build long-term shareholder value. We believe that inclusion is central to our innovation and productivity; that the company is stronger because of the variety of backgrounds, perspectives, and experiences of its employees and board. Some highlights include:

Because we know that creating an environment of safety for our team members starts with each leader setting the tone, our leaders receive education on how to foster an inclusive workplace.
We support employee-driven support groups, which help foster inclusion among all teammates, build awareness and recruit and retain a diverse workforce.
We recognize cultural heritage celebrations, including on-campus celebrations highlighting cultural milestones.

 

We work hard to create a rewarding and supportive environment that empowers our employees to thrive. We have continued to enhance our Human Capital Management (HCM) reporting and practices to enable our leaders to effectively hire talent and manage teams. These practices include standards for setting goals, performance evaluations, succession planning, and continuous learning and development. We are committed to pay equity and regularly review our compensation model to ensure fair and inclusive pay practices.

 

Cinemark works to build self-reliant and healthy communities through a variety of regional and local initiatives, as well as key partnerships. Our employees have opportunities to make an impact as they share their time and skills in our communities, while Cinemark strives to be an exemplary corporate citizen through its three Corporate Social Responsibility (CSR) focus areas of child advocacy, human rights, disaster relief and food scarcity. Some recent highlights include:

Child Advocacy: Variety – the Children’s Charity of Texas, a charitable organization that opens up the world for kids with special needs and their families by providing resources and empowering experiences. St. Jude Children’s Research Hospital advances cures, and means of prevention, for pediatric catastrophic disease through research and treatment.
Human Rights: Dallas Holocaust and Human Rights Museum, which is dedicated to teaching the history of the Holocaust and advancing human rights to combat prejudice, hatred, and indifference.
Disaster Relief and Food Scarcity: Will Rogers Motion Picture Pioneers Foundation provides supportive counseling and financial assistance to help with expenses, such as medical care, housing assistance, and other support, to aid members of the motion picture industry who find themselves in need. North Texas Food Bank that provides access to nutritious food to those in North Texas in their endeavor to close the hunger gap.

 

 

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img203233878_48.jpg CULTURE OF GOVERNANCE

 

We emphasize a culture of accountability and conduct our business in a manner that is fair, ethical, and responsible to earn the trust of our stakeholders. We also maintain governance, compliance, and risk management programs to help ensure compliance with applicable laws and regulations governing our business practices. We believe that good corporate governance is important to ensure that Cinemark is managed for the long-term benefit of its shareholders.

 

Cinemark is governed by an eleven-person board. This Board is responsible for the oversight of the management of our company and its business for the long-term benefit of our stakeholders. Its members set the tone for Cinemark and operate under a set of published Corporate Governance Guidelines, which are based on best practices that meet or exceed the NYSE's and SEC's existing standards. We feature an independent, experienced and diverse Board with expertise in a broad set of areas relevant to our business. Our Code of Business Conduct and Ethics requires all of our directors, officers, and employees to conduct business in an ethical manner and in compliance with all applicable laws, rules and regulations.

 

Our Audit Committee has responsibility for oversight of our risk management processes and regularly discusses with management our major risk exposures and strategies. We implement comprehensive risk management programs to ensure compliance with applicable laws and regulations governing ethical business practices, including our relationships with suppliers, customers and business partners. Our IT systems include 24/7 monitoring and use a combination of industry-leading tools and innovative technologies to help protect our stakeholder’s data.

 

We believe that strong corporate governance and effective management of enterprise risk and social supply chain are crucial for the long-term success of our business. Management regularly monitors and manages supply chain risks, while adhering to a business code of conduct for vendor selection. Vendors must comply with local laws and ethical business practices, which we assess through audits, contracts, and terms and conditions on purchase orders. We seek long-term relationships with partners based on mutual trust, respect, values and cooperation.

 

We routinely engage with our stakeholders to better understand their views on sustainability matters, carefully considering the feedback we receive and acting when appropriate. For more information on our sustainability program and policies, or to read our inaugural Sustainability Report, please visit: https://ir.cinemark.com/corporate-governance.

 

EXECUTIVE COMPENSATION

Item 2: Advisory Vote to Approve Compensation of Named Executive Officers

As required by Section 14A of the Exchange Act, we provide our stockholders with the opportunity to vote to approve, on a non-binding and advisory basis, the compensation of our named executive officers. Because the vote on this compensation program is advisory in nature, it will not affect any compensation already awarded to any named executive officer and will not be binding on or overrule any decisions made by the Compensation Committee or the Board. The vote on this resolution is not intended to address any specific element of compensation. Rather, this vote relates to the compensation of our named executive officers as a whole, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC.

Our compensation program, overseen by the Compensation Committee, is designed to attract and retain a talented team of executives who can deliver on our commitment to build long term stockholder value. The Compensation Committee believes our program is competitive in the marketplace, links pay to performance and is aligned with the prevailing best practices on corporate governance as evidenced by our strong 2023 Say-On-Pay (95% in favor) vote..

The Compensation Committee and the Board considers the results of this advisory vote when formulating future executive compensation policy. The results of this vote serve as an additional tool to guide the Compensation Committee and the Board in continuing to align the Company’s executive compensation program with the interests of the Company and its stockholders. The results of this vote also guide the Compensation Committee and the Board to ensure that our executive compensation program is consistent with our commitment to high standards of corporate governance.

 

 

 

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We ask our stockholders to vote on the following resolution at the 2024 Annual Meeting:

RESOLVED, that the Company’s stockholders approve on an advisory basis the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and narrative disclosure.”

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The Board unanimously recommends a vote FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement.

 

 

Compensation Discussion and Analysis

Named Executive Officers

The following Compensation Discussion and Analysis (“CD&A”) describes 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 (“NEOs”) for the year ended December 31, 2023. These executive officers are:

 

Name

Age

Position

Sean Gamble

49

President and Chief Executive Officer

Melissa Thomas

44

Executive Vice President-Chief Financial Officer

Michael Cavalier

57

Executive Vice President-General Counsel and Business Affairs, Secretary

Valmir Fernandes

63

President-Cinemark International

Wanda Gierhart

59

Chief Marketing & Content Officer

 

Sean Gamble has served as our President and Chief Executive Officer since January 1, 2022. Prior to being Cinemark’s President and CEO, Mr. Gamble served as our COO and CFO beginning in January 2018 and as our Executive Vice President and CFO since August 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, from February 2009 until April 2014. He joined Comcast after 15 years at the General Electric Company where he held multiple senior leadership positions, including CFO of GE Oil & Gas’ equipment business based in Florence, Italy, from May 2007 until January 2009.

Melissa Thomas has served as our Executive Vice President-Chief Financial Officer since November 2021. Prior to joining Cinemark, from February 2020 to October 2021, Ms. Thomas served as Groupon Inc.’s Chief Financial Officer and served as Groupon’s Interim Chief Financial Officer from August 2019 to her appointment as Chief Financial Officer, its Chief Accounting Officer and Treasurer from November 2018 until her appointment as Interim Chief Financial Officer and its Vice President of Commercial Finance from May 2017 until her appointment to Chief Accounting Officer and Treasurer. Prior to joining Groupon, Ms. Thomas served in a variety of finance and accounting leadership roles at Surgical Care Affiliates and Orbitz Worldwide. Prior to her employment at Orbitz, Ms. Thomas held accounting positions at Equity Office Properties and began her career at PricewaterhouseCoopers.

Michael Cavalier has served as our Executive Vice President-General Counsel and Business Affairs since July 2021, our Executive Vice President-General Counsel and Secretary since February 2014, our Senior Vice President-General Counsel and Secretary since January 2006, our General Counsel since 1997 and our Associate General Counsel from 1993 to 1997. He has been with Cinemark for more than 30 years.

Valmir Fernandes has served as our President of Cinemark International, L.L.C. since March 2007 and the General Manager of Cinemark Brasil, S.A from 1996 to March 2007. He has been with Cinemark for more than 26 years.

Wanda Gierhart has served as our Chief Marketing and Content Officer since July 2021 and as our Executive Vice President – Chief Marketing Officer from January 2018 to July 2021. Prior to joining Cinemark, Ms. Gierhart served as Chief Marketing Officer of Neiman Marcus Group, an omnichannel luxury retailer. Ms. Gierhart also served as President and CEO of TravelSmith, a travel clothing and accessory retailer. She also has extensive marketing and merchandising experience with varying roles and responsibilities across major retail brands.

 

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Compensation Practices

We strive to align our executive compensation program with the interests of the Company and our stockholders. The Compensation Committee monitors executive compensation best practices to incorporate into our compensation program. Highlighted below are certain pay practices that we utilize, and those that we avoid, to maintain discipline in our executive compensation program.

Pay Practices We Utilize

 

Base salary

Competitive, market-driven base salary.

Link pay to performance

A significant portion of executive compensation is linked to Company performance. A substantial majority of our NEOs fiscal 2023 compensation was variable compensation tied to our financial performance.

Alignment of performance

metrics with Company’s

strategy

Compensation aligned with successful implementation/deployment of the Company’s short- and long-term strategies through a variety of performance metrics used in our performance-based incentive programs.

Risk mitigation

Caps on the maximum level of payouts, multiple performance metrics and board oversight or approvals to mitigate undue risk.

Stock ownership guidelines

Stock ownership guidelines ensure that our executive officers and directors are financially invested in the Company alongside our stockholders.

Limited perquisites

Limited perquisites to our executives.

Change of control

Employment agreements that contain double triggers for change in control.

Compensation clawback

Ability to recoup certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements.

 

Pay Practices We Avoid

 

Risk

We do not reward imprudent risk taking.

Change in control

There are no “single trigger” provisions in employment agreements for change in control.

Pension

No pension benefits.

No short-sales or hedging

and restricted pledging

transactions

Strictly prohibit officers and directors from engaging in short selling, put, call, or other derivative transactions or hedging or other monetization transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds, in our common stock.

No tax gross-ups

No tax gross-ups on compensation or personal benefits.

No repricing underwater

stock options

Equity plan prohibits the repricing of stock options or SARs.

 

In addition to maintaining discipline in our executive compensation program, these pay practices create an overall compensation program designed to motivate, reward and retain our teammates, including NEOs, for their performance on a short-term and long-term basis. Further, these pay practices help to ensure that excessive or unnecessary risk taking is discouraged and support a level of risk taking that is not reasonably likely to have a material adverse effect on the Company.

2023 Say-On-Pay Result

At the 2023 Annual Meeting, approximately 95% of the stockholder votes cast on say-on-pay were voted in favor of the proposal, which was a significant improvement over the 84% favorable vote received at the 2022 Annual Meeting. The Compensation Committee believes that this substantial majority of votes in favor affirms stockholders’ support for our approach to executive compensation. Every year we endeavor to have discussions with a significant number of our institutional investors in order to better understand their views on our compensation practices. The Compensation Committee carefully considers this feedback in designing the key components of our executive compensation program.

Our Compensation Philosophy

Our executive compensation program is structured to attract, motivate, reward, and retain high caliber talent who will lead the Company to expand its competitive advantage and deliver sustainable profitability. This includes building a solid foundation for long-term growth while consistently achieving strong near-term results. The Compensation Committee takes a holistic view of pay and performance and ensures that there is appropriate alignment with Company performance, overall business strategy and culture. We hire high-caliber individuals who can define a strategy to execute our long-term vision

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while continuing to deliver our mission of making the movie-going experience memorable by providing world class facilities and services and by engaging with our customers. 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.

 

Principal Elements of 2023 Executive Compensation

The pay elements that we utilize are crafted to attract and retain top talent, pay for performance and strike a balance between performance and risk taking. We achieve these goals by offering both short-term and long-term incentive awards, which include a mix of both time- and performance-based vesting requirements, each of which aligns the interests of our executives with our stockholders and encourages focus on both short and long-term success.

Overall, a considerable portion of the compensation payable to our named executive officers is “pay-at-risk.” The following chart illustrates how base salary, short-term incentive awards, restricted stock and performance stock units were allocated for fiscal 2023. For the purposes of the below illustration, the short-term incentive award has been valued at the actual payout amount and the performance stock units have been valued at the target amount on the grant date.

 

 

CEO

Other NEOs

 

img203233878_50.jpg 

Base Salary

 

img203233878_51.jpg 

img203233878_52.jpg 

 

Base salary provides reasonable yet market-competitive fixed pay reflective of an executive’s role, responsibilities and individual performance

Short-Term Incentive Program

img203233878_53.jpg 

img203233878_54.jpg 

 

Payout under the 2023 STIP was based on achievement of Adjusted EBITDA goals that were aligned with our annual operating budget

 

 

Performance Stock Unit Award

 

img203233878_55.jpg 

 

 

 

Annual Equity Awards

img203233878_56.jpg 

img203233878_57.jpg 

The performance goals related to our 2023 performance stock unit awards are based on the achievement of three-year cumulative Adjusted EBITDA goals and three-year cumulative cash flow goals for the period January 1, 2023 - December 31, 2025. Performance stock units are not earned unless a threshold level is achieved. Performance stock units cliff vest on the third anniversary of the grant date.

 

 

 

 

Restricted Stock Award

 

 

 

 

 

img203233878_58.jpg 

img203233878_59.jpg 

Restricted stock awards that vest ratably over a 3-year period and incentivizes retention

 

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Base Salary

The Compensation Committee sets base salaries for named executive officers after examining market data provided by Pearl Meyer (our independent executive compensation advisor) and comparing against peers to align salaries with market conditions, also taking into account the scope and nature of the individual’s job responsibilities, performance, experience and other objective factors deemed relevant by the Compensation Committee. Given Mr. Gamble's relatively recent promotion to CEO (January 2022), his base salary was below market. The 9% increase in 2023 was approved by the Compensation Committee to better align to market. The Compensation Committee considers salary adjustments at its regularly scheduled February meeting with those adjustments becoming effective in March each year.

The base salary for each named executive officer for 2023, as well as the percent change over 2022, is illustrated in the chart below:

 

Name

Position

2022 Salary ($)

2023 Salary ($)

% Change

Sean Gamble

President and Chief Executive Officer

825,000

900,000

9.1%

Melissa Thomas

Executive Vice President-Chief Financial Officer

575,000

596,164

3.7%

Michael Cavalier

Executive Vice President-General Counsel and Business Affairs, Secretary

583,334

597,699

2.5%

Valmir Fernandes

President-Cinemark International

563,336

577,699

2.5%

Wanda Gierhart

Chief Marketing & Content Officer

520,833

537,699

3.2%

 

Short-Term Performance-Based Incentive Awards

Introduction

Our short-term incentive program (“STIP”) is an annual cash-based performance incentive award program, typically based on metrics established in our annual operating budget and which requires the achievement of a threshold level of financial performance for any payout. The participants in our STIP are rewarded for achieving short-term financial and operational goals based upon individual targets expressed as a percentage of base salaries. For the named executive officers, the target STIP opportunities are set by the Compensation Committee taking into account a variety of factors, including peer group data, CEO’s recommendation (except for his own) and the individuals current and anticipated contribution to the strategic goals of the Company. Each participant in our STIP is entitled to receive a ratable portion of his/her target payment based upon the Company’s level of achievement, within the range of threshold and maximum percentages, of the target metric set by the Compensation Committee.

As part of the year-end performance review process, the manager for each participant in the STIP (other than the CEO) evaluates such individual’s performance against his/her annual business objectives and goals. Based upon this review a discretionary modifier up to a maximum +/- 15% may be applied to adjust the individual’s STIP payout (“ABO Modifier”).

Each STIP payout is calculated by applying the following formula:

 

Base Salary

X

Target Payment

(% of Base Salary)

X

% Attainment

+/-

ABO Modifier

=

Actual STIP Payout

 

STIP payments are paid for the most recently completed fiscal year (assuming performance levels have been met) as soon as administratively practical after the amounts are determined and certified by the Compensation Committee during the first quarter after the performance year.

2023 STIP Award Opportunities

 

 

 

 

 

 

 

 

 

 

Name

 

Position During 2023

 

% of
base salary

 

Threshold
(% of target)

Target
(% of target)

Maximum
(% of target)

Sean Gamble

 

President and Chief Executive Officer

 

150%

 

50%

100%

200%

Melissa Thomas

 

Executive Vice President-Chief Financial Officer

 

90%

 

50%

100%

200%

Michael Cavalier

 

Executive Vice President-General Counsel and Business Affairs, Secretary

 

90%

 

50%

100%

200%

Valmir Fernandes

 

President-Cinemark International

 

90%

 

50%

100%

200%

Wanda Gierhart

 

Chief Marketing & Content Officer

 

70%

 

50%

100%

200%

 

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2023 STIP Performance Goals and Results

The Compensation Committee sets performance goals for the STIP in February of each year, and has historically established threshold, target, and maximum payout goals based on Adjusted EBITDA, which is regarded as a key performance metric in our industry and a core valuation metric for our shareholders. For 2023, the Compensation Committee used worldwide Adjusted EBITDA to establish the STIP targets, which was based on the annual operating budget approved by our Board of Directors.

The cash bonus achievement under the STIP is determined using the Company’s reported Adjusted EBITDA with certain add-backs and adjustments for cash bonus accruals, certain severance payments, if any, dividends from non-subsidiaries, revenues from National CineMedia, LLC, unusual expenses such as those related to accounting changes, a +/-5% collar for foreign exchange fluctuation, the industry box office adjustment discussed below and other adjustments the Compensation Committee deems appropriate, including, but not limited to, factors such as extraordinary, unusual and non-recurring events that were not included in the approved annual operating budget (the “STIP Adjusted EBITDA”). Our performance is highly dependent upon the timing, popularity and quantity of films released by the distributors, which requires a significant number of assumptions and projections in setting the budgeted Adjusted EBITDA target. In recognition of the uncertainty around setting such assumptions, the Compensation Committee determined that the STIP Adjusted EBITDA target may be adjusted, upward or downward, at the end of each performance year, to eliminate any variance between the actual North American and Latin American industry box office for the fiscal year and the industry forecasts used to set the STIP target for the year. North American industry box office performance and relevant Latin American attendance assumptions meaningfully impacts our Adjusted EBITDA due to its effect on attendance-driven revenue and costs but is largely outside of the Company’s control. The industry box office adjustment is intended to modify the STIP Adjusted EBITDA target to eliminate the negative or positive impacts of these non-controllable factors. The STIP Adjusted EBITDA target is adjusted upward or downward by approximately $10 million for every 1% change in the North American industry box office assumptions used for setting the 2023 annual operating budget and upwards or downwards by approximately $2 million for every 1% change in associated Latin America industry attendance assumptions used for setting the 2023 annual operating budgets. Results between the percentages are interpolated.

The worldwide STIP Adjusted EBITDA targets for 2023 were as follows:

 

 

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2023 STIP Payouts

As outlined in 2023 achievements, Cinemark significantly outperformed the industry box office results and our peers operating and financial results through diligent focus and execution in advancing our strategic initiatives to position the Company for long-term success. As a result, Cinemark delivered industry-leading results in each of its key performance metrics, including total revenues, Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and net leverage ratio. In 2023 the North American industry box office was $9.1 billion, which exceeded by approximately 7% the $8.5 billion North American box office assumption. The associated industry attendance in relevant Latin America territories exceeded the approved annual operating budget by approximately 17%. As a result of the combined North American box office and Latin America attendance over performance, the STIP Adjusted EBITDA targets were adjusted upward as follows:

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In February 2024, the Compensation Committee certified the STIP Adjusted EBITDA calculation for the STIP and approved the STIP amounts to be paid for the 2023 performance period. The Company attained world-wide Adjusted EBITDA of $594.1 million (calculated as set forth on Annex A) for the year ended December 31, 2023. The Company's out-performance to target was primarily fueled by growth in food and beverage per caps and average ticket price, maintaining market share gains and lower film rental rates. As a result, the Compensation Committee determined that, after giving effect to the adjustments discussed above, the STIP Adjusted EBITDA achieved was $550.0 million, or 116% of the STIP Adjusted EBITDA target, as adjusted for industry results, equating to a payment of 181% of the individual target for each of the NEOs.

The 2023 STIP payments for our NEOs are illustrated in the table below.

 

Name

Target ($)

Target Payment
(% of Base Salary)

% Attainment

ABO
Modifier

Actual STIP
Payout ($)

Sean Gamble

1,350,000

150%

181%

2,443,500

Melissa Thomas

540,000

90%

181%

7.5%

1,017,901

Michael Cavalier

540,000

90%

181%

7.5%

1,017,901

Valmir Fernandes

522,000

90%

181%

15.0%

1,023,121

Wanda Gierhart

378,000

70%

181%

7.5%

712,530

 

 

Annual Equity Incentive Awards

Introduction

Long-term equity compensation is a key element of our executive compensation program. It is used to (i) attract, motivate, reward and retain key talent and (ii) align our executive’s interest with stockholders’ interests to maximize long-term stockholder value. Equity compensation also reinforces an ownership mentality among our executives.

Annual equity awards are made to our named executive officers in amounts that take into consideration Company and individual performance, level of responsibility, an individual’s ability to influence our long-term growth, performance and strategy, among other factors. In 2023, the Compensation Committee used two forms of equity compensation.

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Restricted Stock Awards – designed to reward executives for increases in stockholder value (through our stock price) as well as maintain the continuity of our leadership.

These awards have a three-year ratable vesting schedule from the grant date, which enhances the retentive and motivational value of the awards and balances the value delivered over time.

Annual Performance Stock Unit Awards – designed to drive results based upon achievement of certain pre-established performance metrics relating to performance period determined by the Compensation Committee.

These awards vest 100% on the third anniversary of the grant date, provided the applicable performance goals were achieved for the established performance period.

 

Our equity awards are subject to forfeiture if the recipient fails to remain employed through the vesting period. Holders of unvested restricted stock are entitled to vote the underlying shares and receive dividends. Holders of unvested performance stock units have dividend rights that accrue and are paid on the vesting date to the extent the holder remains employed by the Company. Special grants of equity awards may also be authorized by the Compensation Committee for, among other things, new hires and promotions, exceptional performance or retention purposes.

2023 Annual Equity Incentive Awards

The Compensation Committee determined the annual equity grant for each of our NEOs at its regularly scheduled February 2023 meeting. For the NEOs, the equity grant was split with approximately 40% of the total grant value consisting of restricted stock awards (“RSA”) and the remaining 60% awarded in performance stock unit awards (“PSU”). The Compensation Committee established a three-year performance period for the 2023 performance stock unit awards. The targets for the performance stock units were established by the Compensation Committee at the time of grant and are based upon the Company’s three-year cumulative Adjusted EBITDA and three-year cumulative cash flows for the 2023, 2024 and 2025 fiscal years (each with equal weighting), as these metrics are relevant for achieving the Company’s strategic goals of continuing to strengthen the Company's balance sheet and position the Company for long term success. Performance stock units may be earned only if the Company’s three-year cumulative Adjusted EBITDA and three-year cash flows are greater than the threshold amount established for each. Similar to the STIP, industry box office performance meaningfully impacts Adjusted EBITDA and cash flows. Accordingly, the industry box office adjuster is used to adjust the STIP Adjusted EBITDA target and the Adjusted EBITDA and cash flow targets for PSUs.

Each of the named executive officers received an annual equity grant at their target levels. The table below shows the grant date value of the restricted stock awards and performance stock units.

 

Name

 

Target Equity
% of Base

 

Target RSA ($)1

 

Target PSU ($)1

 

Total Award ($)

Sean Gamble

 

600

 

2,160,000

 

3,240,000

 

5,400,000

Melissa Thomas

 

175

 

420,000

 

630,000

 

1,050,000

Michael Cavalier

 

175

 

420,000

 

630,000

 

1,050,000

Valmir Fernandes

 

150

 

348,000

 

522,000

 

870,000

Wanda Gierhart2

 

150

 

324,000

 

486,000

 

810,000

 

1.
The grant date fair values were calculated in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures).
2.
Ms. Gierhart also received a special grant of restricted stock awards with a grant date value of $500,000, which will vest on the third anniversary of the grant date. See Grants of Plan-Based Awards on page 34.

Compensation-Setting Process

We utilize a combination of objective data along with the Company’s business needs in our compensation decision-making process, and we strive to ensure that our programs are complementary, balance risk, and support both the short- and long-term objectives of the Company.

Roles and Responsibilities

 

Compensation Committee

 

Comprised entirely of “Non-
Employee Directors” for
purposes of Rule 16b-3 under
the Exchange Act

In the compensation decision making-process for our President & Chief Executive Officer and the other NEOs

 

§ Reviews benchmark data, the Company’s historical performance against performance targets for incentive compensation awards, the Company’s overall financial performance and our President & Chief Executive Officer’s overall performance.

 

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§ Approves the compensation levels and performance targets under our STIP and our long-term annual equity incentive awards (“LTIP”) for our President & Chief Executive Officer and also determines whether and to what extent pre-established performance targets have been met.

 

§ Approves all components of our President and Chief Executive Officer’s compensation, including base salary, STIP and any LTIP.

 

In the compensation-decision making process for our other NEOs

 

§ Responsible for approving all components of executive compensation as well as for approving performance targets for our STIP and any LTIP targets, and determining whether and to what extent any pre-established performance targets have been met.

 

§ Reviews and approves all new and revised executive compensation programs.

 

Human Resources Officer

In the compensation-decision making process for our President & Chief Executive Officer

§ Works with our compensation consultant to develop and review benchmark information.

In the compensation-decision making process for our NEOs

§ Works with President & Chief Executive Officer to develop recommendations for all components of the officers’ compensation, including recommending compensation levels and performance targets under our STIP and any LTIP.

Chief Executive Officer

In the compensation-decision making process for our other NEOs

§ Works with our Human Resources Officer to develop recommendations for all components of an officers’ compensation, including recommending compensation levels and performance targets under our STIP, annual equity awards, and any LTIP.

§ Reviews the recommendations with the Compensation Committee.

Independent Compensation Consultant

§ Provides market data, benchmark research, survey information, peer group selection recommendations, and other research relating to executive compensation.

§ Works with our human resources team, including our Human Resources Officer and the Compensation Committee.

 

Competitive Market Positioning

For 2023, the Compensation Committee retained Pearl Meyer as its independent compensation consultant. All research for executive compensation conducted by Pearl Meyer is provided to the Compensation Committee.

In 2023, Pearl Meyer assisted with the determination and recommendation as to the form and amount of director and executive compensation. The Compensation Committee evaluated the independence of Pearl Meyer under applicable NYSE rules, including the services provided and the associated fees paid, and has concluded that Pearl Meyer was independent and that its engagement did not present any conflicts of interest.

The Compensation Committee conducted a review of the direct compensation components paid to our NEOs against a specific benchmark peer group, with a focus on base pay, annual performance incentive pay and stock-based compensation. This benchmark group consisting of 14 companies (referred to as the “Peer Group”), was selected based on the following attributes:

Companies within a specified range of the Company’s revenues and market capitalization.
Companies within media and entertainment, leisure facilities and restaurant industries.
Companies with which we may compete for executive talent.

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The Peer Group is reviewed, updated, and approved annually by the Compensation Committee and may change periodically.

The 2023 Peer Group was comprised of the following companies:

 

AMC Entertainment Holdings, Inc.

Bloomin’ Brands, Inc.

Brinker International, Inc.

Cedar Fair, L.P.

Cineplex, Inc

Cineworld Group, LLC

Dave & Buster’s Entertainment, Inc.

Hyatt Hotels Corporation

IMAX Corporation

   Lions Gate Entertainment Corp.

Live Nation Entertainment, Inc.

Six Flags Entertainment Corporation

   The Madison Square Garden Company

Wyndham Hotels & Resorts, Inc.

 

The Compensation Committee also uses survey compensation data provided by Pearl Meyer. Utilizing the peer data and the survey data, the Compensation Committee evaluates the amount and proportions of base salary, annual incentive pay and long-term compensation, as well as target total direct compensation for the Company’s NEOs. Compensation Committee decisions are qualitative and a result of the Compensation Committee’s business judgment, which is informed by the market data provided by Pearl Meyer. The Compensation Committee believes that the compensation opportunities provided to our Named Executive Officers are appropriate. The Compensation Committee continues to monitor current trends and will modify its programs as it determines appropriate.

 

Additional Compensation Practices

 

Stock Ownership Guidelines

The Compensation Committee maintains stock ownership guidelines to further align the interests of our executive officers and directors with the interests of our stockholders and to encourage long-term stock ownership. The guidelines apply for so long as the executive officer or director occupies such positions.

The stock ownership guidelines for named executive officers and directors is shown below as multiples of base salary and annual cash retainer, respectively:

 

 

Role

Stock Ownership Requirement

Chief Executive Officer

5 x

Executive Vice Presidents

2 x

Board of Directors

5 x

 

 

All shares of common stock beneficially owned by the executive officer or director, including time-based restricted stock are counted towards the ownership requirement. Executive officers and directors have five (5) years from the time they become subject to the guidelines to reach the ownership requirements, and compliance is reviewed every year.

 

As of the record date for the 2024 Annual Meeting, all named executive officers and all directors were in compliance, or working toward compliance, with the stock ownership requirement.

Compensation Risk Assessment

The Compensation Committee monitors our compensation policies and practices to determine whether our risk management objectives are being met and to adjust those policies and practices to address any incentives that have the potential to encourage risks that are reasonably likely to have a material adverse effect on us and any changes in our risk profile. As part of these considerations and consistent with our compensation philosophy, our compensation program, particularly our annual and long-term incentive compensation plans, are designed to provide incentives for the executives to achieve performance objectives without encouraging excessive risk-taking.

Highlights of the Company’s risk-mitigating compensation program are:

appropriate mix of “short-term" vs. "long-term” pay and “fixed” vs. “variable” pay to reward overall performance;
Company performance measured against objective financial metrics during;
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;

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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;
vest of a portion of long-term equity incentive awards linked to Company performance over time;
validation of pay-for-performance on an annual basis by stockholders; and
unconditionally prohibits covered employees from hedging transactions, pledging of Company securities and holding Company securities in margin accounts.

In 2023, the Company adopted a clawback policy that complies with the NYSE listing requirements. The clawback policy requires the Company to recover the amount of erroneously awarded performance-based compensation if the Company is required to file an accounting restatement with the SEC due to the Company's material non-compliance with any financial reporting requirements under applicable securities laws.

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 material 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 2023 Annual Report on Form 10-K, and the Board has approved the recommendation.

 

Respectfully submitted,

Nina Vaca (Chair)

Benjamin Chereskin

Darcy Antonellis

Carlos Sepulveda

 

 

 

EXECUTIVE COMPENSATION

 

SUMMARY COMPENSATION TABLE FOR 2023

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

 

Name and Principal Position

Year

Salary
($)
(1)

Bonus
($)
(2)

Stock
Awards
($)
(3)

Non-Equity
Incentive Plan
Compensation
($)
(4)

All Other
Compensation
($)
(5)

Total ($)

Sean Gamble(6)

2023

900,000

5,399,991

2,443,500

59,002

8,802,493

President and Chief Operating Officer

2022

825,000

3,628,435

1,423,125

78,090

5,954,650

 

2021

687,587

1,507,181

963,000

24,522

3,182,560

Melissa Thomas

2023

596,164

 

1,049,985

1,017,900

28,107

2,692,156

Executive Vice President –

2022

575,000

987,849

815,063

19,868

2,397,780

Chief Financial Officer

2021

95,833

500,000

3,546,616

4,142,450

Michael Cavalier

2023

597,699

1,049,985

1,017,900

59,074

2,724,658

Executive Vice President –

2022

583,334

1,005,030

829,238

73,303

2,490,905

General Counsel & Business Affairs, Secretary

2021

563,578

952,966

672,067

29,086

2,217,697

Valmir Fernandes

2023

577,699

869,985

1,023,120

56,712

2,527,516

President – Cinemark

2022

563,336

832,005

839,025

68,350

2,302,716

International

2021

555,012

736,396

661,852

31,775

1,985,034

Wanda Gierhart(7)

2023

537,699

1,309,982

712,530

42,558

2,602,769

Chief Marketing & Content Officer

2022

520,833