Charter Communications Inc., which signed key executives to long-term deals after former CEO Jerry Kent resigned on Sept. 28, revealed in a recent securities filing how expensive that effort was.
Signing long-term agreements were: chief operating officer Dave Barford; chief financial officer Kent Kalkwarf; CEO Carl Vogel; chief technology officer Steve Silva; Eastern Division senior vice president of operations Dave McCall; and Western Division senior vice president of operations James Smith.
According to Charter's quarterly report, the agreements last until Dec. 31, 2005 and include base salary raises and hefty stock options.
Kalkwarf and Barford signed four-year agreements, and will receive a $100,000 boost in their annual salaries, to $350,000, and a bonus equal to as much as 50 percent of their base compensation.
The two executives also received options to buy 750,000 shares of Charter Class A common stock at the market price on the day of the grant. Charter also issued 50,000 shares of Class A common stock to both men — worth about $619,000, based on Charter's closing price of $12.38 on Sept. 28.
Vogel's salary is $1 million a year, and he'll receive an annual bonus of up to $500,000. He also gets options to purchase 3.4 million shares of Charter common stock, and also was issued an additional 50,000 shares. Vogel also received a $250,000 signing bonus.
Silva, executive vice president of corporate development and chief technology officer, receives a salary of $300,000 and an annual bonus equal to as much as 50 percent of his base pay. Smith and McCall each get $300,000 in annual salary and a 40 percent bonus.
PAYOUTS TO KENT
Charter will also have to pay Kent a consulting fee equal to three months salary and a $900,000 bonus. The former CEO left after philosophical differences with Charter chairman Paul Allen.
On Kent's behalf, Charter also will donate $500,000 to a charity in increments of no less than $50,000, and allow him to use the company aircraft until Dec. 24 for a fee. Kent also gets free cable and modem service from Charter at two residences for as long as he owns them.
Kent also agreed not to solicit Charter employees prior to Dec. 24, except for executive assistants (other than executive vice president Steve Schumm) or secretaries. Kent also can solicit Charter personnel with the written consent of the company.
Charter avoided paying Kent about $66 million when he relinquished about 7 million in stock options — 4.8 million shares of which were vested.
But according to the St. Louis Post-Dispatch, Allen paid Kent about $71.4 million for membership interests in Charter Investments, a holding company that controls about 33 percent of the MSO's equity. The Post-Dispatch
said the payment was disclosed in a paper filing at the SEC last month.
The document was not available on the SEC's electronic filing system.