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Charter Plan Could Pay Execs $24M

Charter's incentive plan aims to keep four top execs from changing jobs through the bankruptcy process and beyond

Jeff Baumgartner

March 19, 2009

2 Min Read
Charter Plan Could Pay Execs $24M

Though on the verge of bankruptcy, Charter Communications Inc. is willing to spend up to $24 million on an incentive plan designed to keep four of its top execs with the MSO through the restructuring process, with additional incentives that will come into play later.

Charter, with more than $21 billion in debt, is expected to file for bankruptcy on or before April 1. The prearranged deal, agreed to by certain of its debt holders, will reduce the MSO's debt by about $8 billion, and provide Charter with north of $3 billion in the form of debt refinancing and new capital. (See Charter Turns to Chapter 11 and Losses Mount at Charter .)

In an 8-K filed Wednesday, Charter disclosed the adoption of the Value Creation Plan, which includes two components: a one-time Restructuring Value Program (RVP) and an annual Cash Incentive Program (CIP). The new incentives replace a previous restructuring plan disclosed in January, before the MSO announced it would file for Chapter 11. (See Tracking Charter .)

Charter has earmarked about $10 million for the RVP, with $6 million set aside for CEO Neil Smit; $2.38 million for COO Mike Lovett; and $765,000 each for CFO Eloise Schmitz and EVP and general counsel Grier Raclin.

They'll get those amounts if they're still on board, for example, when Charter emerges from Chapter 11 or if there's a change in control of the company.

The CIP bonuses are linked to certain individual performance goals during each of the three years following a successful Charter restructuring. If they meet all their targets, Smit's due $2.5 million each year, with Lovett getting $910,000, Schmitz getting $664,000, and Raclin netting $597,000. If they all meet their goals during this three-year period, Charter's CIP plan will award a total of roughly $14 million.

If they come up short in any of those years, the difference can be earned in a subsequent year "if the performance goals applicable to that subsequent year are achieved," the 8-K states.

— Jeff Baumgartner, Site Editor, Cable Digital News

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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