AT&T executives canceled $9 million due to deal with Time Warner

[ad_1]

American telecommunications group AT&T paid its executives US$9 million to complete its acquisition of Time Warner in 2018. This is a US$85 billion transaction. Not selected This month after bringing insignificant returns for investors.

According to 2019 regulatory documents, after a costly battle with the US Department of Justice (which has been sued to block the deal with Time Warner), AT&T paid the current CEO John Stankey (John Stankey) A $2 million merger completion bonus was awarded.

John Stephens, the then chief financial officer, also received a $2 million bonus, and the company’s general counsel David McAtee received a $5 million award for completing the transaction. .

Shareholder consulting firm Glass Lewis said that due to the merger of Time Warner, Stankey, Stephens and McAtee also received larger annual bonus opportunities.

At the company’s annual meeting in April, most shareholders were concerned about AT&T’s executive bonuses. Voted against The company’s salary report.

David Yermack, a professor at New York University’s Stern School of Business, said: “For a long time, AT&T’s salaries have been too high.” “It’s surprising that it took so long to get Shareholders are frustrated.”

Yermack said that merger completion bonuses fell out of favor because they seemed to reward executives as part of their work.

Anh Tran, a professor of finance at City University of London, said that bonuses did appear in M&A transactions to incentivize executives to complete difficult transactions. He said that the termination fee and other costs incurred due to a failed transaction are usually much higher than the cost of completing the bonus.

AT&T declined to comment on the bonus, but said: “We see that the shareholder value generated by the WarnerMedia/Discovery transaction is significantly higher than the price we paid for Time Warner, and it may be as high as 30% or more, which is separate from the proceeds of the transaction. To telecommunications companies and their shareholders.”

AT&T investors will own 71% of the combined shares Warner Media/Discovery.

Shareholder advisers have expressed some concerns about AT&T’s executive compensation. According to data from Institutional Shareholder Services, after acquiring Time Warner, Stan was appointed as the chief operating officer of AT&T in October 2019. His total compensation jumped by one-third to $22.5 million, more than The median number of CEOs of the company’s peers. In 2020, Stankey was appointed CEO of AT&T.

The company disclosed the recently hired CEO of WarnerMedia a few weeks before the spin-off, which drew further criticism this year. Jason Kilar According to the International Space Station (ISS), in the absence of any performance standards, the company received a bonus of $48 million in four years.

ISS said: “Investors may be skeptical about the lack of performance conditions for the huge rewards granted to non-CEO executives this year.”

When it was discovered that the agreement was announced, Kilar’s future was unclear.

AT&T also provided McAtee with a $9 million “career retention” bonus this year.

AT&T’s second-largest shareholder, BlackRock, voted against the company’s five compensation committee members, partly because of executive bonuses.

BlackRock stated that this payment and the consulting fee paid by former AT&T CEO Randall Stephenson “all occurred with continued underperformance relative to peers and the market as a whole.” “.

[ad_2]

Source link

Recommended For You

About the Author: News Center