Pay Cuts for Time Warner’s Top Brass4/04/2006 11:30 AM Eastern
A handful of Time Warner Inc. executives, including chairman and CEO Richard Parsons, took slight pay cuts in 2005, primarily because the media giant had a slightly tougher year financially.
In its annual proxy statement, filed with the Securities and Exchange Commission Tuesday, Time Warner said Parsons received $1.5 million in annual salary (the same as the previous year), a $7.5 million bonus ($500,000 less than his 2004 bonus) and stock awards and other compensation for a grand total of $16.004 million in 2005. That was about 1.4% behind his 2004 total compensation of $16.237 million.
In the proxy, Time Warner said Parsons’ 2005 bonus was lower than what he received in 2003 and 2004 because although Time Warner had met or exceeded its financial targets for the year, “the company did not exceed its financial goals by as much as it had in 2004 and 2003.”
According to the proxy, among Time Warner’s accomplishments in 2005 were revenue and cash flow growth of 6% and 8%, respectively, while generating about $4.4 billion in free cash flow (cash flow after interest payments and capital expenditures are made). While that exceeded its 2005 guidance of high-single-digit cash-flow growth, it was behind 2004’s performance, when revenue rose 6% and cash flow was up 12%.
Parsons’ No. 2, president and chief operating officer Jeff Bewkes, also saw his total compensation fall in 2005 to $12.46 million from $12.75 million in 2004. Bewkes received the same annual salary of $1 million, but his bonus dropped to $6 million from $6.5 million in 2004.
Former chairman of the media and communications group Don Logan, who retired Dec. 31, also got a pay cut in 2005, taking in $12.907 million in salary, bonus and other compensation in 2005, slightly behind the $12.987 million he earned in 2004.
Executive vice president and general counsel Paul Cappuccio’s total compensation dipped to $5.224 million in 2005 from $5.249 million in 2004. A $19,231 bump in salary to $1 million from $980,769 in 2004 was offset by a $100,000 decline in annual bonus to $2.7 million from $2.8 million in the previous year.
Chief financial officer Wayne Pace was one of the few top Time Warner executives to see a pay raise in 2005 -- to $6.834 million from $6.765 million in 2004. But that was mainly due to a $150,000 increase in other compensation to $373,276 from $218,067 and additional stock awards -- his restricted-stock award in 2005 was $1.34 million, up from $1.292 million in 2004, and his option grants rose to $1.411 million from $1.346 million in 2004. Pace’s annual salary stayed flat at $1 million, while his bonus dipped to $2.7 million from $2.9 million in the previous year.