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Time Warner’s Bewkes Gets Added Incentives

CEO Signs Five-Year Contract Extension 12/02/2012 7:00 PM Eastern

Time Warner Inc. chairman and CEO Jeff Bewkes won’t see any changes in his annual salary and bonus checks next year, but the media mogul’s new employment deal could earn him a 60% bump in incentive compensation, according to documents filed with the Securities and Exchange Commission last week.

In an SEC filing last Monday, Time Warner released more details on the five-year employment-agreement extension with Bewkes it announced earlier this month. The pact extends Bewkes’ tenure with the company through 2017.

Bewkes’ annual salary and cash bonus target will remain unchanged at $2 million and $10 million, respectively, according to the filing. However, the chairman and CEO could see his annual long-term incentive compensation rise 60% from $10 million to $16 million in the new deal, beginning in 2013. That could bring Bewkes an extra $30 million over the life of the agreement, provided he meets or exceeds every financial target.

Time Warner stressed that Bewkes’ long-term incentive compensation is a mixture of stock options and performance stock units “the value of which are tied directly and solely to the company’s future financial performance and shareholder returns, and that does not include time-vested restricted stock units.”

Bewkes will not be granted any up-front equity awards in connection with entering into the new agreement, unlike the terms of his old deal, Time Warner added.

Bewkes has steered Time Warner through some tough macroeconomic times since becoming CEO in 2008 (he added the chairman title in 2009) — engineering the spinoffs of AOL and Time Warner Cable, and boosting the company’s cable networks by investing more in original programming.

Last year alone, Time Warner returned about $6 billion to shareholders in the form of $5 billion in stock repurchases and $1 billion in dividends. The stock price itself rose 12.3% ($3.97 each) in 2011 to $36.14 from $32.17. So far this year, Time Warner shares are up 28.3% ($10.27) to $46.60.

All together, Bewkes could reap as much as $28 million in total compensation in 2013 if he meets all of his performance targets. That’s about 8% higher than the $26 million in total compensation he received in 2011, according to Time Warner’s latest proxy statement.

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