Skip to footer

AT&T CEO loses $2 million over T-Mobile breakup

AT&T chief takes a big pay cut, but the company lost $4.2 billion because of its failed deal to acquire T-Mobile USA. The AT&T executive still makes $18.7 million a year.

|
Ben Earp/The Star/AP
Gov. Bev Perdue announces Wednesday that AT&T will locate a data center in Kings Mountain, N.C. AT&T's CEO, not pictured, took a $2 million pay cut after his company failed to acquire T-Mobile USA.
  • By Peter Svensson Associated Press

| NEW YORK

AT&T Inc.'s board cut CEO Randall Stephenson's 2011 pay by $2.08 million because he engineered the failed deal to buy T-Mobile USA, according to a regulatory filing Tuesday.

Opposition from federal antitrust regulators forced the Dallas-based phone company to give up on the $39 billion deal in December. That meant it had to hand over $4.2 billion in cash and spectrum rights to T-Mobile as a so-called "break-up fee" to compensate T-Mobile for the failure.

Looking at that $4.2 billion charge, AT&T's board cut Stephenson's cash bonus by 25 percent, and cut his stock award by 6 percent, for a total of $2.08 million.

That left Stephenson's 2011 total pay package at $18.7 million, according to the Associated Press formula. His compensation was down from $20.2 million in 2010.

It's unusual for company boards to cut CEO compensation for specific missteps. But the cost of the failed T-Mobile deal was exceptional. It's standard practice to offer break-up fees to get acquisition targets to sign on to a deal, but the one AT&T promised was unusually large.

The AP's compensation formula includes Stephenson's salary, bonus, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals that companies list in the summary compensation table of proxy statements filed with regulators.

For all of 2011, AT&T earned $3.9 billion, or 66 cents per share, on $126.7 billion in revenue. That compares with net income of $19.9 billion, or $3.35 per share, on $124.3 billion in revenue in 2010.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to AT&T CEO loses $2 million over T-Mobile breakup
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2012/0223/AT-T-CEO-loses-2-million-over-T-Mobile-breakup
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe