Charter CEO gets 25 percent raise, $2 million signing bonus
Charter Communications Inc., a debt-burdened cable operator controlled by Microsoft Corp. co-founder Paul Allen, on Tuesday disclosed that it has agreed to an amended employment agreement which boosts the pay and benefits of its CEO.
In a filing with the Securities and Exchange Commission, Charter said it will give President and CEO Neil Smit an annual salary of $1.5 million, a 25 percent increase from the $1.2 million he received as part of a former employment agreement struck in 2005 that expires at the end of this year.
The amended employment agreement took effect on July 1 and expires June 30, 2010.
Smit also will earn a bonus based on performance. The measure of his effectiveness will not include the company's stock price but could include revenue growth and operating cash flow.
Charter's stock has fallen 30 percent this year, and on Tuesday closed down 9 cents per share, or 11 percent, to 73 cents. The stock, which began a sharp descent in 2002, hasn't traded above $5 since January 2004. The stock has been pressured by years of losses; St. Louis-based Charter hasn't turned a profit since it went public in 1999.
Smit's target bonus will be 200 percent of his annual base salary, up from 150 percent. The maximum he can receive from bonuses also will increase to 125 percent of the target bonus in 2008. For 2009 and 2010, the maximum will be 125 percent to 200 percent of the target bonus.
Smit will get a $2 million bonus for signing the amended employment agreement. If Smit quits before Dec. 31, 2009, he has to pay back the bonus. If he quits after Dec. 31, 2009 but before June 30, 2010, he will have to pay back only half of the bonus.
If Smit is terminated without cause or good reason, he will get three times the total of the following: annual salary, target bonus, accelerated vesting of his equity awards under the company's stock incentive plan and 36 months worth of health insurance payments.
Smit will also be eligible for other benefits and perks given to executives.
Charter is the dominant cable provider for the Madison area.
