Charter Plan Could Pay Execs $24M
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