Adelphia Offered Cornelius Much More2/24/2003 12:31 PM Eastern
In its battle to win bankruptcy-court approval of a $40 million pay package
to secure two top executives, Adelphia Communications Corp. revealed Monday that
an earlier CEO candidate asked for and nearly received a deal that would have
been worth six times as much.
It was the first day of what is expected to be a two-day hearing in U.S.
Bankruptcy Court in Manhattan to win court approval of Adelphia's hiring of
former AT&T Broadband CEO William Schleyer as its chairman and CEO.
Former AT&T Broadband chief operating officer Ron Cooper would fill the
same role at the Coudersport, Pa.-based MSO.
While Adelphia has been under intense criticism for the three-year, $40
million compensation package offered to Schleyer and Cooper -- especially by its
committee of equity-security holders -- it was revealed that former Renaissance
Cable vice chairman and current Adelphia board member Rod Cornelius was close to
a deal last year that would have paid him between $177 million and $265.2
million over three years.
David Kurtz -- a managing director at Lazard LLC who has been an advisor to
Adelphia since June -- testified Monday that Adelphia's board of directors had
agreed to hire Cornelius in August.
According to Kurtz, one member of the creditors committee said he "wanted to
puke" on Cornelius' employment agreement. Adelphia's board later withdrew its
offer to Cornelius.
In his testimony, Kurtz said that after an "ugly exchange" between Cornelius
and the creditors committee, it was determined that he was no longer a viable
Schleyer and Cooper -- who had notified the creditors committee of their
interest in taking the jobs in September -- began serious negotiations with
Adelphia in November. According to the company, Schleyer originally asked for a
deal that would pay him between $40.8 million and $64 million over three years
(Cooper would have received between $27.2 million and $42.6 million). That deal
was later lowered to a combined package that would have paid the two $65 million
over three years.
Adelphia decided to amend the compensation deal again after a report of the
$65 million package appeared in TheNew York Times Nov. 8, later
agreeing to a deal that would pay the two $40 million over the same period.
Adelphia's board of directors voted 5-1 to hire Cooper and Schleyer, with
Cornelius the lone dissenting vote.
The hearing is expected to continue Wednesday.