Cable Tech

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

Tom-Andrew 12/5/2012 | 4:08:44 PM
re: Charter Plan Could Pay Execs $24M

"or if there's a change in control of the company."

Wouldn't that be coincidence... to update the compensation plan ..... and then maybe have a buyer...

What has business come to... just rape and pilliage the business... while you can!-á :(

Jeff Baumgartner 12/5/2012 | 4:08:44 PM
re: Charter Plan Could Pay Execs $24M

More news from CharterLand...Reuters, citing-áthree unnamed sources, reports today-á that Apollo Group, a private equity firm, is in line to take control of most of-á Charter after the MSO gets through the restructuring process, which, amazingly, might take only three months...

Jeff Baumgartner 12/5/2012 | 4:08:43 PM
re: Charter Plan Could Pay Execs $24M The filing outlines a bunch of contingencies, including the one involving "change and control."-á If I was in-ámood to speculate further, I might've pointed out in the story that Comcast is fighting the FCC's 30% ownership cap.
WeaselMctavish 12/5/2012 | 4:08:37 PM
re: Charter Plan Could Pay Execs $24M Can you say AIG.-á So they kept a leaky boat a float lets give em a big round of a pplause and a boat load of money.
Michael Harris 12/5/2012 | 4:08:28 PM
re: Charter Plan Could Pay Execs $24M A big payoff for travelling a "Rocky" road.-á Couldn't resist an equally bad pun.-á ;)
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