Who says poor performance isn't rewarded?
AT&T Execs Would Receive $31M in SBC Sale
Saturday March 12, 6:03 am ET
By Bruce Meyerson, AP Business Writer
Top AT&T Executives Would Receive $31 Million in Severance Pay As Part of Sale to SBC
NEW YORK (AP) -- Top executives of AT&T Corp. would receive $31 million in severance pay if the long-distance company's deal to be acquired by SBC Communications Inc. goes through as planned.
The company would have paid an additional $10.3 million to chairman and chief executive David Dorman if he was not slated to become president of SBC after the merger, according to a filing late Friday with the Securities and Exchange Commission.
The filing also detailed millions of dollars worth of stock options, restricted shares and performance-based shares which will vest earlier than originally intended as a result of the merger. However, the executives also will forfeit some performance shares as a result of the merger.
Dorman will receive early access to $17.7 million worth of options and shares which he would have received over the next several years, based on the $19.71 value assigned to AT&T's shares in the SBC merger agreement. But Dorman also will forfeit $7 million worth of performance-based stock, company spokesman Andrew Backover said.
AT&T President William Hannigan stands to receive the largest cash severance, nearly $6.5 million. He also would receive early access to restricted and performance-based shares worth nearly $10 million based on the deal price, but would forfeit $4.5 million in performance stock.
The other big severance payments include $4.7 million for Thomas Horton, the chief financial officer; $3.8 million for James Cicconi, the general counsel; and $4 million for Hossein Eslambolchi, the chief technology officer. Other executive officers would received a combined $12 million in severance payments.
If any of the executives are hired by SBC, they won't receive the payments.
Separately on Friday, the Federal Communications Commission announced the start of a 180-day period for public comment on the proposed merger, which could take until mid-2006 to gain all the regulatory approvals needed from federal and state officials.
The SEC filing also said AT&T might create a pool of up to $100 million for cash retention bonuses to keep top executives from leaving earlier than six months after the SBC deal is completed.
San Antonio-based SBC agreed in January to a $16 billion cash-and-stock acquisition of its former parent AT&T, a storied company in U.S. telecommunications before the federal government ended its telephone monopoly in 1984.
AT&T, based in Bedminster, N.J., has about 24 million residential subscribers and 3 million business customers, down from more than 60 million at its peak. Its customers and revenues from long-distance phone calls have been siphoned by rising competition from its former Baby Bell subsidiaries and newer technologies such as cell phones and the Internet.
SBC is the nation's second-largest local phone company, serving a wide swath of states in the Midwest, South and California. |
