With Time Warner Inc.’s merge with AT&T Inc. on the horizon, the company decided to give a 50 percent raise to its Chief Executive Officer Jeff Bewkes, pushing his salary up to a whopping $49 million.
According to a regulatory filing on Friday, April 27, 332,226 restricted shares worth $32 million will vest to the 65-year-old Bewkes over five years. This bonus came with a performance condition tied to Time Warner’s adjusted net income for 2017, which was reached, said the company. Bewkes also received a cash bonus of $14.7 million cash bonus and an additional $2 million added to his 2017 salary. Meanwhile, he only received $32.6 million in total compensation the prior year.
According to Crain’s News, “Several other top executives, including Chief Financial Officer Howard Averill, got merger-related awards in 2016. The grants were meant as an incentive to keep them in their jobs after a deal is completed, Time Warner spokesman Keith Cocozza said. Bewkes won’t receive any equity awards for 2018, Cocozza said. AT&T executive John Stankey would be in charge of overseeing Time Warner’s three divisions—Warner Bros., HBO and the Turner networks, which include CNN and TNT. AT&T CEO Randall Stephenson, 58, will take over as head of the combined company, while Bewkes has said previously he’ll stay for a while after the deal is completed.”
The acquisition has been delayed by the Justice Department, which filed on antitrust lawsuit to block the merger out of fear that it will lead to television subscribers having to pay higher prices, which is disputed by AT&T. After both parties presented their closing arguments on Monday, April 30, in the six week long antitrust trial, the fate of AT&T’s proposed $85.4-billion purchase of Time Warner is now in the hands of a federal judge.
U.S. District Judge Richard Leon heard the final plea from the Justice Department, who argued that the combination would make the company so powerful that it would hinder competition resulting in higher prices for consumers.
In his closing argument, Justice Department lawyer Craig Conrath said, “This merger is a big deal…. It would have a massive impact on the structure of the pay-TV industry. This is not just a big deal for the companies involved. It is a big deal to consumers.”
On the other side, the top attorney representing AT&T and Time Warner Daniel Petrocelli said in his closing arguments that the Justice Department “did not come close” to proving that competition would be harmed by the deal.
He said, “The government has managed to string out this merger for 18 months … based on a case that never should have been brought in the first place. We have a complete failure of proof.”
By Charles Bernstein