Blockbuster CEO Disputes $2.3M Bonus, Says He’s Entitled to $7.6M

Blockbustertalogo_1Blockbuster today announced a dispute with its CEO over the size of his bonus. The company’s reported profit for the four quarter of last year fell 28% because of high costs associated with its new service Total Access. But despite that, CEO John Antioco says the $2.3 million bonus he received on January 25 wasn’t enough. He claims his bonus should be $7.6 million based on performance goals. *Update* Blockbuster in advanced talks to buy Movielink, which would make it the first company to offer movies online, through the mail, and in-store.

True, the Total Access program has been gaining in popularity, which allows you to exchange DVDs received in the mail for in-store movie rentals. Blockbuster’s stock price has increased about 77% since the Total Access launch in November of 2006. And 500,000 new subscribers signed for the program during the fourth
quarter alone, bringing the total subscriber base to 2.2 million.

But while Blockbuster has found a temporary edge in the fight for online movie rentals, Netflix announced in January a new feature allowing you to immediately watch movies and TV shows on your computer for no additional cost (see my related article on why I think Netflix’s move is incredibly smart and will likely make online movie watching a reality).

Blockbuster is just beginning to catch up in the online rental industry Netflix pioneered, and Netflix is already hard at work implementing the next big thing: online movie watching. And get this: Blockbuster has mentioned that it may cut back on the size of its stores’ movie catalog in order to get people to use the online service more. But I thought the advantage was the ability to go between the two, no? And rumors are already out that Blockbuster may get into the movie-download business (well, duh, the company will have to eventually, one step behind everyone else).

In any event, CEO Antioco is focused on the here and now. He said in a statement that Blockbuster expects a total of three million Total Access subscribers by the end of March. Whatever measurement ensures him his bonus, I suppose.