According to the Company’s Proxy Statement filed with the SEC last April, during fiscal year 2005 and fiscal year 2004, Mr. Antioco (1) received a base salary of $1,250,000 and additional, deferred compensation of $383,333 and $1,045,192 in base salary and $1,000,000 in deferred compensation, respectively; (2) received a cash bonus of $5.0 million paid in 2004 (for 2003 performance); received 5.0 million restricted stock units worth $26.8 million in 2004; (3) received a car allowance of $1,100 per month for each year; and, (4) recorded expenses of $92,125 for personal use of the Company’s plane in each year.
Since early 2001, Blockbuster’s tickets to failure include an average net margin of (10.0)% per annum, more than $3.0 billion in net losses, and about a 70 percent decline in the market value of its common stock [$10K invested in Blockbuster’s stock five years ago would be worth approximately $3,100 today].
Continued declines in worldwide same-store sales, uncertainty in execution to an online subscriber business model (Total Access), increased competition for traffic from other online channels of video distribution (Netflix (NASDAQ:NFLX)), margin pressures on the sales of in-store videos from mass-merchandisers of lower-priced DVDs (such as Wal-Mart (NYSE:WMT)), and a leveraged balance sheet—Total Debt/Equity of 141.6 percent—which will curb marketing and limit business options (to simple decisions like closing under-performing stores)—Blockbuster has more to worry about than whether or not its CEO flies chartered or coach.
As for Mr. Antioco, in our view he is just another expression of a pampered CEO (he is still making gobs of money—albeit shareholders and the Company have made nothing). “Mr. Antioco, the peanuts they serve in coach taste just fine!”
BBI 1-yr chart: