Charter Execs Take a Compensation Hit Without Options

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While some top executives reaped big paydays in the first three months of the year due to taking advantage of stock options, executives at Charter Communications showed just how important stock awards can be to an executive’s take-home pay.

According to a proxy statement released on March 27, top Charter executives saw their overall compensation fall precipitously in 2013, mainly because they exercised no options during that year.

Charter chief operating officer John Bickham took the biggest hit, with his overall compensation dropping 86% to $2.8 million in 2013 compared to the $20.1 million he received in 2012. The difference for Bickham, who joined Charter in 2012, was in stock awards. In 2012, Bickham received $12.7 million in stock awards and $4.8 million in option awards. He received no such awards in 2013.

Chief financial officer Christopher Winfrey’s total compensation dropped 61% in 2013, to $848,122, compared with $2.2 million he received in 2012. Winfrey had received about $552,000 in stock options in 2012. He received none in 2013.

Even Charter CEO Tom Rutledge couldn’t escape the carnage. Rutledge’s overall compensation fell 25% in 2013 to $4.5 million, far short of the $6 million the executive took home in 2012.

The main difference for the CEO was in his non-equity incentive plan compensation, which dipped to $2.2 million in 2013 from $3.3 million in 2012. He received no stock option awards in 2012 and 2013.

The Charter proxy said Rutledge received a base salary of $1.99 million, non-equity incentive plan compensation of $2.2 million and other compensation (mainly for use of company aircraft) of $249,849 for the year.

Charter executives appear to be keeping up the trend. None of Charter’s top executives have cashed in options so far this year, except to cover taxes for awards that have vested.

While its executives have held off on selling shares, Charter stock soared 78% in 2013 ($59.92 per share) as its pursuit of Time Warner Cable helped spark a consolidation frenzy in the industry that drove the entire sector to new heights. Those gains continued in the beginning of the year, as Charter came closer to a deal, but tapered off after Comcast announced its $45 billion agreement to purchase TWC on Feb. 13. Charter shares, up about 1% in the first month of the year, have declined about 10% since Feb. 12, the day before the Comcast announcement.

While some top executives reaped big paydays in the first three months of the year due to taking advantage of stock options, executives at Charter Communications showed just how important stock awards can be to an executive’s take-home pay.

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