Schleyer, Cooper Head to Coudersport1/17/2003 8:48 AM Eastern
After one week of negotiations, Adelphia Communications Corp. has reached an
agreement to hire former AT&T Broadband CEO William Schleyer and his chief
lieutenant, Ron Cooper, at a substantially reduced price.
But the new deal, valued at about $41 million, does not come without
Schleyer, who lost his job at AT&T Broadband after it merged with Comcast
Corp. in November, would become chairman and CEO of Adelphia, replacing current
chairman and acting CEO Erland Kailbourne.
Cooper would become president and chief operating officer.
Adelphia's hiring of Schleyer and Cooper still needs to be approved by U.S.
Bankruptcy Court. Adelphia said it would submit the necessary documents to the
court this coming week.
Adelphia's board of directors approved the new package Thursday night, after
one week of intense negotiations to amend the compensation package for Schleyer
and Cooper, originally valued at about $64 million over two years.
The new pact is about 36 percent less and is one year longer, but includes a
guaranteed payout of $23.9 million, according to people familiar with the
The earlier compensation agreement also was hinged on Schleyer and Cooper
attaining certain valuation benchmarks -- $10.5 billion, or 20 percent higher
than the MSO's current valuation of $8.7 billion. The new deal includes no such
In a letter to Adelphia's board Friday, attorneys for the company's official
committee of equity-securities holders -- which includes Citizens Communications
Corp. chairman Leonard Tow, one of Adelphia's largest individual shareholders --
objected to the deal. The committee also objected to the earlier agreement,
suing Adelphia in U.S. Bankruptcy Court and calling for the ouster of the
company's board of directors.
According to the committee letter, Schleyer and Cooper are also insisting
that Adelphia move its headquarters from Coudersport, Pa., to Denver "sometime
after approval of the proposal." Although that stipulation is not included in
the employment contracts, it is a move that the committee estimated will cost
$50 million annually.
Cooper said a move to Denver is not in the immediate plans and would be up to
the board of directors, not him or Schleyer.
Although he said neither he nor Schleyer intend to move to Coudersport --
both expect to spend a lot of time there, however -- if the company did decide
to move, the vast majority of headquarters workers would remain in
Adelphia currently has about 1,400 employees in its Coudersport headquarters.
According to sources familiar with the situation, if the move was made to
Denver, it would likely involve about 150 people, including senior management
and support functions.