New Contracts For Key Cable Execs1/02/2010 2:01 AM Eastern
Comcast and Cablevision Systems spent the last few weeks of the year sewing up new deals for key personnel, with top executives at both MSOs reaching new, potentially lucrative long-term pay agreements.
While each agreement was different, they had a common thread — they were made by companies that had major deals pending and wanted to show investors that there would be no management surprises in the near term.
“This shows continuity in management,” Miller Tabak media analyst David Joyce said of the deals. “Continuity is important to remove uncertainty, because whenever there is uncertainty, you get multiple depression on the stocks.”
Perhaps the company with the biggest pending deal is Comcast, which in December announced its joint-venture partnership with General Electric for entertainment giant NBC Universal. After the deal receives regulatory approval — expected some time this year — Comcast chief operating officer Steve Burke will be in charge of overseeing the MSO’s 51% controlling interest in the JV.
With that added responsibility — Burke will continue to oversee day to day operations for the cable systems — comes additional potential earning power. According to documents filed with the Securities and Exchange Commission Dec. 22, Burke’s new employment deal extends to 2014. And though he will continue to receive the same base salary ($2.2 million annually) and a performance bonus for as much as three times that base, he also is eligible for two cash bonuses valued at $6 million and $12 million in restricted stock awards that could boost his annual compensation to $26.8 million, assuming that he receives his full bonus awards. That would be up from about $20.4 million in 2008 – his 2009 compensation has not been released yet.
At Cablevision Systems — which is slated to spin off its Madison Square Garden unit in the first quarter — pay deals for three top executives were modified to reflect their added responsibilities, and it appears, the company’s strong performance. Cablevision stock was up about 50% ($8.63 per share) between Jan. 2, 2009 and Dec. 28.
Cablevision CEO James Dolan, who will also become executive chairman of MSG after the spin, could reap as much as $4.3 million in salary, bonus and stock awards from that new job in 2010. That is on top of the $14.5 million in salary and incentives he will receive in 2010 as CEO of Cablevision.
Cablevision chief operating officer Tom Rutledge — who is a perennial candidate for top media CEO jobs — landed an extended deal that could reap him a total of $32.7 million in 2010, mostly in the form of a $7.75 million one-time cash bonus he would have to repay (on a prorated basis) if he leaves the company, and a one-time $10.75 million stock grant. That package also includes a base salary of $1.64 million, an annual bonus of up to $6.6 million, and long-term cash and/or equity awards with an aggregate target value of $6.8 million in calendar year 2010.
Hank Ratner, who will become president and CEO of MSG following the spinoff and will remain as vice chairman of Cablevision, stands to earn more than $21 million in salary and incentive bonuses from his dual roles.
As vice chairman of Cablevision, Ratner will receive a total of $5.65 million in salary, bonus and special equity awards. The company will also establish and credit $15 million to a retirement account for Ratner.
As CEO of MSG, Ratner could receive up to $16.15 million in compensation ($1.2 million in salary, up to $4.8 million bonus, and long-term cash and/or equity awards with an aggregate target value of $5.4 million in 2010 (with similar awards expected in subsequent years). Ratner also will receive a one-time stock grant worth $4.75 million from MSG no later than March 31, 2010, subject to certain conditions.
And one big deal is yet to come. In late December, Starz Entertainment announced that former Home Box Office head Chris Albrecht would join the premium network as CEO, replacing the retiring Robert Clasen. Albrecht, who is expected to beef up Starz’ recent push into original content, was scheduled to take the helm Jan. 1. His employment agreement has not yet been filed with the SEC.
Comcast and Cablevision Systems cut new long-term deals with their top executives in the past few weeks. A snapshot of the compensation packages the executives could get in 2010.
|SOURCE: SEC documents|
|Steve Burke: COO, Comcast: $26.8 million|
|James Dolan: CEO, Cablevision Systems; executive chairman, MSG: $18.8 million|
|Tom Rutledge: COO, Cablevision: $32.7 million|
|Hank Ratner: CEO, MSG; vice chairman, Cablevision: $21.8 million|