MoviePass’ parent company has once again scheduled a shareholder meeting.
But this time it won’t be asking for investors to give it permission to reverse split its stock.
Helios and Matheson Analytics, which bought MoviePass in mid-2017, on Monday notified shareholders that it will be holding its annual meeting on December 27. The company is asking investors to vote on its directors, approve its chosen auditor, and weigh in on its executives’ compensation.
“Your vote is important. Whether or not you plan to attend the annual meeting, please cast your vote as promptly as possible,” Stuart Benson, Helios and Matheson’s chief financial officer, said in a letter to shareholders.
The meeting announcement follows a tumultuous year for the company and an abortive attempt by it to hold a separate meeting this fall to approve what would have been its second reverse stock split this year. The company originally scheduled that meeting to be held in mid-October before delaying it twice and ultimately cancelling it in the face of widespread shareholder opposition to the plan.
It had hoped to use the reverse split to boost its share price, which has been mired at about 2 cents for months now. The company faces imminent delisting from the Nasdaq for failing to meet its listing standards. That could make it harder for investors to buy and sell shares and for the company to raise more funds.
It will be a standard meeting, but it still could draw sparks
The upcoming meeting, by contrast, has a much more standard agenda, although it could prove every bit as controversial, given the company’s stock performance over the last year. Helios and Matheson’s stock price has fallen more than 99% this year.
The first thing shareholders will vote on is Helios and Matheson’s five director candidates. Four of those candidates — company CEO Ted Farnsworth; Muralikrishna Gadiyaram, who founded the company’s former Indian parent entity, Helios and Matheson Information Technology; management consultant Prathap Singh; and Gavriel Ralbag, the managing director of Gold Edge Capital — have served on its board since 2016. Joseph J. Fried, an attorney who runs his own law firm, is the only new director nominee.
Farnsworth and Gadiyaram in particular could draw opposition. Farnsworth has served as Helios and Matheson’s CEO since January 2017 and spearheaded both its acquisition of MoviePass and its decision to slash the price of MoviePass’ subscription service to $10 a month. That moved caused Helios and Matheson to burn through $321 million in just the first nine months of this year, an amount it replenished largely through issuing and selling billions of new shares of its stock.
The company has revised its offering multiple times this year to try to reduce its cash burn.
Gadiyaram, meanwhile, was arrested in India for allegedly stiffing a creditor and has been accused of fraud there, as Business Insider reported.
Helios and Matheson encouraged shareholders to vote for all five of its nominees.
“Mr. Farnsworth’s extensive business experience … led us to conclude that he should serve as a director,” it said in a regulatory filing detailing the upcoming meeting at proposals investors will vote on.
“Mr. Gadiyaram’s deep experience in the information technology and data analytics sector,” it continued, “gives him an exceptional understanding of our businesses and led us to believe that he should serve as a director.
The company nominally paid its CEO $8.9 million last year
Shareholders will also get their “say on pay” — an advisory up-or-down vote on executives’ compensation. There too, they could express their ire, particularly with regard to Farnsworth’s pay.
Helios and Matheson gave its CEO a total pay package of $8.9 million last year. That included $225,000 in salary, $1.35 million in cash bonus, stock awards worth $7.25 million at the time they were granted, and $76,050 in housing expenses.
The company hasn’t yet awarded the shares underlying the stock award to Farnsworth, because they have to be approved by shareholders first. But those shares are now worth just $49.50, thanks to the dramatic decline in the company’s stock price.
Helios and Matheson paid Stuart Benson, its chief operating officer, $235,500, including $200,000 in base salary and a $35,500 bonus. It gave Parthasarathy Krishnan, its then-chief innovation officer, $2.9 million in total pay last year, $2.7 million of which came in the form of a share award.
The date of the company’s annual meeting is unusually late. Public companies typically hold them soon after releasing their annual reports, which Helios and Matheson published in April. And last year, the company held its annual meeting on October 27.
However, the company has held a series of special shareholder meetings this year to authorize the issuance of new shares and to reverse split its stock.