Back in mid-April 2020, during the onset of the Covid-19 outbreak, Vanity Fair posed the question, “Is filing for bankruptcy on the table for AMC, the largest movie theater chain in the world?” The company closed 634 theaters in the U.S. and Canada.
The over 100-year-old company faced an existential threat to its existence. As the country called for social distancing and the closures of nonessential businesses, the movie chain found itself in dire straits. The situation was exasperated as the major Hollywood studios held off filming blockbuster movies because of the pandemic.
The company was left with costly rental leases and expenses for its roughly 1,000 theaters worldwide without any revenue coming in. AMC CEO Adam Aron and his management team acquiesced to salary cuts and received stock in lieu of their cash compensation.
Aron spent the last year dealing with the company’s landlords, figuring out how to stave off bankruptcy and raising money during one of the most difficult time periods in modern history. The company drastically cut its staff. About 26,000 employees were furloughed or laid off.
In a wild, Hollywood-style plot twist, it looks like the move chain was saved—not only by the top executives, but by a social-media, stock-buying frenzy started on Reddit’s WallStreetBets.
An army of young aggressive day traders and investors became enamored with a number of “meme stonks,” including GameStop and AMC Entertainment, the parent company of the movie chain.
The Wall Street Journal reported the buying frenzy caused AMC’s stock price to soar nearly 500%. The WSJ wrote, “The hashtag #SaveAMC proliferated on social media, attached to memes showing images of AMC theaters superimposed on the surface of the moon—a symbol that Reddit traders use to represent their aspirations of the stock reaching stratosphere-busting heights.”
As a result of the sudden skyrocketing of the stock, AMC was able to “bag another $305 million from the stock market and slash its debt load by $600 million,” in addition to a new infusion of $917 million.
Fast forward a year’s time and AMC Entertainment, according to Deadline, is giving its CEO and upper-echelon executives “supplemental special incentive cash bonuses” for their work over the pandemic.
Regulatory filings show that “Aron will receive $3.75 million; chief financial officer Sean Goodman, $507,500; John McDonald, executive vice president US/Canada operations, $194,550; Elizabeth Frank, vice president worldwide programming and chief content officer, $180,650; and Stephen Colanero, executive vice president, chief marketing officer, $173,875.”
The bonuses were provided “to recognize the extraordinary efforts of employees to maintain the company’s business and preserve stockholder value during the Covid-19 pandemic, encourage continued engagement and retention and incentivize management and employees during the continuing and unprecedented difficult business conditions.”
When the movie chain fully reopens, hopefully, the laid-off workers will get their jobs back. Aron said about the company’s future, “AMC is a proud American company with 100 years of heritage.” He added, “And moviegoing at our theaters is very much in the psyche of American consumers. In my heart of hearts, I passionately believed that AMC deserves a second century as bright as its first.”