News Execs Rewarded For Their Covid-19 Efforts

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Feb 8, 2016
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It's absolutely disgusting. Here's $7 million that we saved from not paying our team members and management. Ugh.
 

Mushroom

Getting aHEAD of myself
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Yikes, this chain is pulling every bad PR move in the book. It looks even worse after Disney made a big show of cutting their executive salaries to soften the blow of furloughing their employees.
 
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Zachary

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Quote from the article:
One potential theory is that these stock incentives were put in place in order to prevent the early departure of SeaWorld’s executives since the individuals do not get the full sum of money unless they stay with the company until 2022.
This could make a lot of sense. If SEAS is in dire straights, it may really be smart to try to hang onto all the leadership you can (especially since they seem to have been presiding over a real SEAS rebound).

The optics here are ABOMINABLE, don't get me wrong, but this could be a desperate attempt to keep leadership from totally crumbling.
 
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Nov 1, 2019
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Quote from the article:


This could make a lot of sense. If SEAS is in dire straights, it may really be smart to try to hang onto all the leadership you can (especially since they seem to have been presiding over a real SEAS rebound).

The optics here are ABOMINABLE, don't get me wrong, but this could be a desperate attempt to keep leadership from totally crumbling.
I guess it depends on the timing of the first payout. If any of it comes before they're back to a relatively normal level of staffing then I think it is wrong. If it's all after then... meh, still seems kinda lame but I don't know.

Still, it would be nice if they offered something like this to their employees too. Maybe just back pay.
 

horsesboy

professional Pantheon observer
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Pr wise it looks really bad but playing devil's advocate for a moment. It's over a two year period so they are not necessarily spending the capital on it right now. It's important to hold on to key leadership to help have a smooth and safe reopening when the time comes. It also may help stabilize the stock price and instill some more faith in the investors and help keep the company around that way.
 
Feb 3, 2019
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Okay, I would like to point out a few things about this. I held off from responding to this post yesterday because I wanted to do my research and come in informed.

First, we are all already aware, that last month and into this month, all of the executives.got bonuses through the "2017 Omnibus Incentive plan.". By going back in the filings, I was able to find out some details about this plan. Namely:

"
the Issuer's 2017 Omnibus Incentive Plan, which vests over two years, with one-half (1/2) vesting on each
of the first two anniversaries of the date of grant.
"

This being the end of fiscal year 2019 for Seas, means that these were the final payouts for the 2017 omnibus incentive plan. And thus, this plan is simply its replacement.

Second, to everyone saying things like:
It's absolutely disgusting. Here's $7 million that we saved from not paying our team members and management. Ugh.
And:
Yikes.

How to tank your company 101 passed with flying colors.
Know this.

SEAS spent $0.00 on these bonuses.

The bonuses are being paid by issuing new stocks. Essentially printing money. The shareholders are footing this bill; not SEAS.

Issuing these new stocks dilutes the share pool by the proportion issued. $7m amounts to roughly 8% of SEAS market cap right now. In theory, for every $1000 someone has invested, they've given away $8 for these bonuses. But reality doesn't work like theory and while yes, the dilution will _somewhat_ affect the share price, the value that these execs bring should outweigh the price. At least those are the optics that the board would likely use.

But straight up saying that SEAS took $7m they saved from not paying people and gave it to their execs is a straight up falsehood. That is not what happened here.
 

warfelg

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The actual what happened isn't as bad as it looks, however right now the PR hit from executing and reporting that it was done is getting quite a bit of backlash. I can tell you on my Facebook feed this morning, I saw a friend (fellow park enthusiast but not from VA) putting together a petition to boycott SEAS that already has 2500+ signatures because of this news.
 
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Zachary

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I can tell you on my Facebook feed this morning, I saw a friend (fellow park enthusiast but not from VA) putting together a petition to boycott SEAS that already has 2500+ signatures because of this news.
[eye rolling intensifies]

Seriously though, all of this SEAS leadership hate is exposing an incredible level of immaturity in the community.
 

warfelg

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[eye rolling intensifies]

Seriously though, all of this SEAS leadership hate is exposing an incredible level of immaturity in the community.
I don't necessarily disagree with this take. I fired a counter point back based on the passage from Hersheypark yesterday that showed they had still charged monthly charges up until April 14th. I asked them if they were going to give up their Hersheypark pass because Hershey hadn't announced any plans up until that point (and from what I understand dining plans, drink plans are still up in the air there too); and they basically laughed at me saying "Well Hershey is better so they get the benefit of the doubt." Heck when I posted the same thing here I expected someone that posted about being charged for their BGW pass to make comment on that as well. But it went by without much commentary. I know I made the comment elsewhere, but I think we get so into our own bubble of our "local park" that we forget that every park is dealing with issues and not all parks are doing the exact same thing. Like I'm curious as to what SF fully is doing. Has anyone heard of Uni still charging? Disney? Parques Reunidos? I keep my KD pass as well, and up until yesterday I didn't know what the compensation will be. But I agree with you, that based on the response, you would think that all other parks laid out their exact plans the second it happened and SEAS is the only one not doing anything.

Back to the article:
I think that the problem SEAS "created" for themselves with this is that the headline mis-represents what actually happened (and I know they have no control over it). Now, in my defense, I did read the article before I posted; and I still feel my comment is somewhat warranted. I feel as though if SEAS were able to (I'm not sure the legality of this though I believe they can); they could represent the dollar amounts in terms of percentages, and say through dilution of shares they were gaining X% more in stock options. The line that's going to jump out at people and the media will run with (which this article did) is:
the Compensation Committee of the Board of Directors of SeaWorld Entertainment, Inc. (the “Company”), approved certain equity awards designed to recognize employees for their extraordinary contributions and continued expected contributions to the Company and its long term goals during the global COVID-19 pandemic.
Which portrays the bonus as a 'benefit' for handling the crisis so well as opposed to something that existed that they are altering to reflect the hardships. Maybe they should have started a new sentence with the last part and say it was also an effort to delay and hardships to the company during the pandemic, or something of the matter.

Also FWIW I'm not a huge Behind the Thrills fan of their work, because I've taken notice that their headline writing and lead paragraph writing tends to be very shock value, and their 'investigative' work tends to get buried some. My personal opinion here, the headline should have said "SEAS extends 2017 incentive plan by 2 years amidst COVID-19 pandemic".

But I bet they'll still get invited to media events despite the negative press while you sit on the outside looking in :(
 
Feb 3, 2019
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Another thing that I'd like to point out is that any time you publish articles relating to the stock of a company, you tread dangerous waters.

Ever read any articles on sites the regularly discuss corporate issues as they relate to stocks? Notice the disclaimers at the bottom which state if the writer owns shares or not?

If you own shares/positions on a company and write "shock value" headlines without disclaimer, you are potentially setting yourself up for stock price manipulation suits.

It's not only unethical; it could also be illegal.
 
Aug 21, 2016
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The actual what happened isn't as bad as it looks, however right now the PR hit from executing and reporting that it was done is getting quite a bit of backlash. I can tell you on my Facebook feed this morning, I saw a friend (fellow park enthusiast but not from VA) putting together a petition to boycott SEAS that already has 2500+ signatures because of this news.
Link to this petition?
 

warfelg

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Mar 16, 2016
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I don't think it's illegal to do what they did. Because of freedom of press and all.

But, misrepresenting the truth is unethical. And given this is the article that's being sited everywhere as to why to avoid SEAS or the crappiness they've done; it's almost borderline slander (which if SEAS really wanted to they could go after them for).

Link to this petition?
Given that it was forwarded to me from an individual in a private group, I don't feel right sharing it, especially since it contains the names and profiles of many people who might not consent to it being shared in an outside manner.
 
Nov 30, 2018
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Looking at this move, I see two possibilities:
  1. SEAS executive team is insular to the effects of what they are doing and isn't connected at all to what is happening on the ground. This isn't uncommon in companies and bad press and backlashes correctly comes out of it.
  2. SEAS is being strategic in keeping key personnel through what will be a very trying time financially, including possibilities of bankruptcy or a sale/merger.
The arguments for it being strategic are decent, however the specific personnel given the bonuses doesn't speak well to it being strategic. While the CEO, CFO, and Chief Legal Officer can have strong cases made for their absolute necessity as they almost certainly have knowledge even their team members do not, the same can not be said for the COO, Chief Zoological Officer, or CHRO. Those three positions are all replaceable either with a deputy or with an external hire in the case of one of them leaving and won't impact SEAS ability to move forward. My conclusion is this is more insular in thinking than strategic and combined with the constant turnover in the C-Suite doesn't speak well to the company leadership in general.
 

GrandpaD

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While I appreciate the thorough analysis by @Jahrules , one of the key points of public relations is "perception vs reality". Doing a quick Google search it wasn't just Behind the Thrills that headlined the story that way. The Orlando Sentinel and others also took that direction.

Orlando, with tourism as it's main economic base, has been extremely hard hit. As we know, SEAS furloughed 90% of it's employees. So, while the stock compensation to the executives may have been planned, very few people are going to delve into the numbers/plan. They just see "$7 million", "Covid-19 Pandemic" and "Executives". So, in this case, the perception greatly outweighs the reality, especially with so many unemployed within the company and Orlando.

The timing was horrendous. The wording of the filing tying the stock plan to Covid-19 was not well thought out, especially if it was something that dates back to 2017, as was stated above. And no where that I see in the SEC filling that this is "new stock". I'm not being argumentative, I'm simply stating that the media is taking the filing verbage literally. A PR statement accompanying the SEC filing should have been done to lessen the "perception vs reality" divide.
 

warfelg

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Mar 16, 2016
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Looking at this move, I see two possibilities:
  1. SEAS executive team is insular to the effects of what they are doing and isn't connected at all to what is happening on the ground. This isn't uncommon in companies and bad press and backlashes correctly comes out of it.
  2. SEAS is being strategic in keeping key personnel through what will be a very trying time financially, including possibilities of bankruptcy or a sale/merger.
I'll give a 3rd:
The SEAS executive team knew exactly what they were doing in extending the dates of the program already in place, and though that extending it during this time was going to be looked at favorably, but instead it got mis-reported as to what it really is.
 
Nov 30, 2018
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I'll give a 3rd:
The SEAS executive team knew exactly what they were doing in extending the dates of the program already in place, and though that extending it during this time was going to be looked at favorably, but instead it got mis-reported as to what it really is.
Diluting shareholder value for unnecessary bonuses while the company is in a financial crisis is rarely going to be looked at well. Most companies are correctly reducing executive packages to save money and demonstrate a commitment to keeping their company afloat. SEAS is doing the opposite. Just because a program existed before doesn’t mean it’s a good idea in a crisis particularly when its a total buyers market for most labor right now. None of those executives have other offers in this market and there are dozens of equally competent replacements out (or soon to be out) looking for work.
 
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