Time Warner Inc.'s top five executives were due for a combined payout of as much as $216 million in their sale of the company to AT&T. U.S. government efforts to block the deal put that lucrative reward in limbo.
The executives, including Chief Executive Officer Jeffrey Bewkes, will get the money if they leave within two years of closing a merger. The Justice Department is suing to stop the $85.4 billion transaction, arguing it gives AT&T too much power in the media industry. AT&T has vowed to fight in court, meaning a judge may ultimately decide the outcome unless the sides settle.
Bewkes, 65, has said he would step down after a transition period, and no other member of the Time Warner leadership team has officially announced plans for after the merger. AT&T has said one of its executives, John Stankey, would oversee Time Warner following the close of the deal. After AT&T's most recent big deal, the takeover of DirecTV, most of the satellite operator's top leaders departed.
Time Warner had no comment on the payout figures. The company's shares rose 0.4 percent to $89.88 at 9:50 a.m. in New York.
Bewkes has the most at stake among Time Warner's leadership team. He's due for a payout valued at $111 million as of Monday's close. This includes cash severance of $33.2 million, according to the company's latest proxy filing, and vested stock options and restricted stock, some of which are tied to performance goals. About a quarter of his total payout comes from a retention award he received in February in recognition of his efforts involved with the merger.
General Counsel Paul Cappuccio is currently on pace to get a payout of $34.7 million, while Chief Financial Officer Howard Averill would get $42.7 million. Gary Ginsberg, executive vice president of corporate marketing and communications, may get about $12.2 million and Olaf Olafsson, executive vice president of international and corporate strategy, is at $15.3 million. The amounts include special one-time equity awards they received last year in consideration of the merger.
Each of these executives, except for Bewkes, may get an additional cash payout equal to 50 percent of their 2017 target annual bonuses. They'd get of half of the award when the merger closes, with the remainder paid out if they stay employed with the company for another six months.
-- Bloomberg News