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To listen to some executives cry on their quarterly conference calls about the struggles of the cable television industry during the economic downturn almost makes you want to weep for their misfortune, until you realize some of those voices are getting big salary hikes anyway. For a select few, economic downturns are for the little people. Nothing shall stand in the way of substantial salary raises and bonuses. Don’t have the money to pay? Just raise your rates!
Take Time Warner Cable’s Chief Operating Officer Landel Hobbs. Many of y0u will remember him from last April’s controversial Internet Overcharging experiment. Landel tried to convince consumers their rape and pillage broadband pricing was a good thing, and objections to it were simply a result of you misunderstanding how good of a deal it was.
Hobbs has an all-new employment agreement you can read for yourself. Sonya Hubbard from footnoted, which reviews SEC filings, notes the company went out of its way to hand Hobbs a new contract a year before his current one expires:
The odd thing about Hobbs’ raise is that, according to the proxy filed April 20, 2009, his 2008 employment agreement wouldn’t have expired until January 31, 2011. That agreement paid him a base salary of $900,000, an annual discretionary target bonus of 233% of his base salary (nearly $2.1 million), and a discretionary annual equity and other long-term incentive compensation award with a minimum target value of $3,000,000.
The new agreement took effect January 1, 2010 and has the same expiration date… January 31, 2011 as his former agreement. But now Hobbs gets a minimum annual base salary of $1,000,000 and an annual long-term incentive compensation with a target value of $3,650,000. The annual discretionary cash bonus remains at $2,100,000 (although now the number is specifically stated, rather than given as a percentage of his salary).
Senior Executive Vice President and Chief Financial Officer, Robert Marcus also gets a new contract, after his old one expired in 2008 (he’s been getting a monthly extension ever since). Hubbard reports:
The company had given Marcus raises, of course. In addition to other types of compensation, as of last April Marcus’s base salary was $800,000, his annual discretionary target bonus was 175% of his base salary ($1.4 million), and his discretionary annual equity and other long-term incentive compensation award had a minimum target value of 225% of his base salary ($1,800,000).
The new agreement, which became effective January 1 and runs through December 31, 2012, states that Marcus will now get a minimum Base Salary of $900,000, an annual Target Bonus of $1,500,000, and an annual long-term incentive compensation with a target value of $3,100,000.
While executives surely appreciate a raise as much as the rest of us do, it’s probably a safe bet that investors and especially cable customers may be less enthusiastic about the new agreements.
At those prices, both can afford a lot of pay-per-view, but then, Time Warner Cable often provides free service to its higher level employees and management, so they’re insulated from those pesky rate hikes the rest of us pay year after year, too.
Other stories of interest:
- What Recession? Cable Executives Enjoy Salary & Bonus Windfall
- Time Warner Cable 1st Quarter Results Media Pack
- Bankrupt Charter Cable Throws Money Party for CEO: $7.4 Million = Double Pay for Trip to Bankruptcy Court
- Fox Returns Fire on Time Warner Cable Over Its Roll Over or Get Tough Campaign
- Time Warner Cable Nation’s Third Largest Internet Service Provider – 62 Percent of Its Customers Take Broadband
“we’ll just blame users”-8,10,13,31,1180, D&C
I’m proud that my money is going towards keeping on such brilliant execs as these with generous raises. Without Hobbs’ insight into the coming overwhelming flood of data, TWC may have been caught off guard, but now they know consumption billing will save them. Enjoy your raise, Hobbs, you’re welcome!