In a quarterly filing with the Securities and Exchange Commission, Charter Communications released details of the employment agreements it signed with senior executives, including Carl Vogel, who was recently named president and CEO. In late September, Charter's former CEO, Jerry Kent, unexpectedly resigned.
Moving to answer Wall Street's concerns over a lack of management contracts for its top executives, Charter now has signed contracts with Vogel, EVP and COO David Barford, EVP-corporate development and CTO Stephen Silva, SVP-operations (Eastern Division) David McCall and SVP-operations (Western Division) James Smith. Virtually all of the contracts run through Dec. 31, 2005, and feature noncompete clauses for terms of two to three years and annual bonuses of 40% to 50% of the executives' salaries.
Vogel's base salary was set at $1 million a year, according to the documents, although Charter's board of directors retains the right to increase that sum at its discretion. Vogel's stated bonus is not to exceed $500,000 annually, with half of that designated as a merit bonus and the other half to be determined through a formula that takes into account budgeted cash flow and other targets set by the board. Vogel also received a one-time signing bonus of $250,000.
While at Charter, Vogel will have use of a luxury car, and the company will pay all associated business expenses. Charter will also pay periodic country club dues on Vogel's behalf and will reimburse for up to $10,000 in out-of-pocket expenses for legal, tax and financial-planning expenses each year.
Charter issued Vogel a block of 50,000 Class A shares; additionally, Vogel was granted options to purchase 3.4 million Class A shares at an exercise price equal to the price on the day of the grant.
The SEC filing also shines some light on the departure of Kent, a co-founder of Charter. Upon his departure, Kent received a $900,000 bonus, a consulting fee equal to three months of his base salary and a promise that Charter will contribute $500,000 to national or St. Louis charities of his choice in increments of no less than $50,000.
The agreement, effective Sept. 28, included some frills. Kent gets to keep the luxury car provided for his use by Charter, the right to use (for a fee) Charter's private aircraft for up to 20 hours before Dec. 24 (when his consulting term ends) and free cable and modem service as long as Kent owns the two properties currently being served. He also gets reasonable access to technical support.
In return, Kent relinquished his options and agreed not to solicit Charter employees prior to Dec. 24, with the exception of his secretaries, executive assistants (other than EVP Steve Shumm) and, with written consent, nonessential personnel. That includes anyone employed by Charter at the time of the agreement.
Back to this issue
