On April 12, SeaWorld announced in a filing with the Securities and Exchange Commission (SEC) that it will be awarding its executive officers with millions of dollars of stock awards over a two-year period. According to the filing, “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.”
In short, SeaWorld decided to award its executive officers due to their efforts to help the company as it navigates through the global COVID-19 pandemic. Each officer will be awarded a different amount in the form of shares of the company’s stock.
The question must be asked why SeaWorld is giving almost $7 million worth of stock to its executives at this time, especially since 90% of SeaWorld’s employees have been furloughed without pay or healthcare benefits since April 1st. Just last week, the company announced that it was reducing the base pay for its executives by 20%.
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. SeaWorld seems to have a hard time retaining executives, as evidenced by the last two permanent CEOs resigning after less than a year on the job, citing problems with the Board of Directors and its Chairman, Scott Ross.
Another interesting connection to Scott Ross is the fact that Ross also serves as the head of the Compensation Committee – the same committee that approved these payments. One of Ross’ partners at Hill Path Capital, James Chambers, also serves on the Compensation Committee.
Regardless of the underlying reason for these awards, SeaWorld is in a precarious situation. Currently, all of its parks have been closed for almost a month, and although the coronavirus pandemic seems to be waning, it could still be months before the parks are able to even reopen. While SeaWorld will likely be able to financially survive through the summer, its stock price has hit an all-time low, potentially making it attractive for sales and takeovers. Without a doubt, SeaWorld and the entire theme park industry will be very different in the next few years.
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