Citadel Rewards Suleman & Ellis

[Element9]

From Inside Radio, June 10, 2010: Citadel management stays in place. The financial institutions now in control of Citadel Broadcasting following its bankruptcy restructuring have decided not to make any changes in the company’s executive suite. Citadel signs a new five-year employment agreement with CEO Farid Suleman. COO Judy Ellis gets a new contract too.

Crater the company, decimate shareholder value, destroy employee morale, get a five year deal. Suh-weet!

 

[gr8oldies]

Then again, who else would take the gig? The banker group would control your every move.

 

[Mike Sheridan]

Was it buying the ABC owned stations and the radio network that caused the downfall? It seems like we started hearing about problems right after that deal was done. It seems like it wasn't an outright buy and that Disney can still somehow exercise some control over the old ABC stations, is that right? It might have been that Disney received stock in Citadel for the sale giving them some control. That might be wrong, I don't remember the details. The deal sounded good for Disney.

 

[TheBigA]

A few things you might not understand:

First of all, due to the bankruptcy, his previous contract, like ALL contracts the company had, was canceled. So he was basically working without a contract.

Second of all, it's for less than he was making before. No consolation to those who want him tarred and feathered, but that's the situation.

Third, if he fixes the company, at least to the owners satisfaction, he should share in the rewards.

So it's not exactly a "reward." A reward would be that the banks forgive the debt, and let Farid do whatever he wants. They didn't do that. They still control the company, not him.

If he gives the banks what they want, THEN they will reward him. They're not there yet. What they want is their money back with interest.

 

[Element9]

Taylor On Radio, June 11, 2010

Farid Suleman remains the boss at Citadel, with a new five-year deal.
But he’ll be getting much more attention from the new owners than Wall Street financier Ted Forstmann gave to his only radio investment. Farid stays, with a five-year deal whose base salary is $1,250,000 and whose potential first-year bonus is $2 million. That’s where he’s been throughout the Chapter 11 bankruptcy process and it’s where he starts for the new owners. The other key executives remain, and the pay gap between CEO and everybody else remains. COO Judy Ellis has a base salary of $500,000. CFO Randy Taylor is at $400,000, General Counsel Jacquelyn Orr is at $350,000 and SVP Patricia Stratford is at $200,000. They each also qualify for bonuses ($200,000 for Ellis, Taylor and Orr, $125,000 for Stratford). Plus "stock appreciation rights."

Citadel – new board, but familiar CEO and management.
Citadel’s new owners, its lenders, have installed a strong board while sweeping away the old one. Gone are Teddy Forstmann and Anthony Forstmann, plus Michael Miles, Michael Regan, Thomas Reifenheiser and Wayne T. Smith. Coming in are former Belo executive and former NAB Joint Board Chair Jack Sander. Also former NielsenConnect President Jon Mandel, former Discovery Network President Billy Campbell, former Yahoo VP Greg Mrva, former Sprint Nextel CFO (and former Disney CFO) Paul Saleh, and former Campbell and Nabisco Senior VP Doreen Wright. That’s a board that’s capable of asking serious questions of the once and future CEO, the seventh member of the board.

---

"The ship runs aground not by the storm but the captain." - US Navy adage

 

[smartestguyintheroom]

With all due respect "Big A", Farid, Judy, and all those contracts were cancelled. While hundreds of Citadel employees lost their jobs or had to endure pay cuts, Farid and Judy were still being paid at their old contract rate which in Farid's case was totaling about $17 million annually PLUS company jet, having his taxes paid on top of his deal, etc. Thus the well earned nickname "Fagreed". Same thing for Judy, except her comp levels were substantially lower than his.

You are correct in that his and her deals are substantially less than before (especially his). Remember though that all the calls for his tar and feathering are because it was Farid and Judy who ran that company into the ground. Tar and feathering are called for in this situation but did not happen. And I find it difficult to show any grief for a $1.25 and $500k base deals for these two, especially considering how they have ruined lives and careers to get more for themselves.

Both of these "executives" should have been shown the door long before bankruptcy, but in any case immediately upon filing. There should not be any second chances especially when there are so many COMPETENT broadcasters who would run the post bankruptcy Citadel in a more efficient, professional manner. Normally I'd agree with you if they fix the company, they should share in the rewards. But not these two, since it was them who, literally, BROKE the company financially as well as the spirit.

It's very unfortunate that banks follow the "devil you know" mentality when bailing companies out of trouble. That's the only reason these two are stil working. Dollar for dollar, keeping them in place is the worst investment any financial institution can make.

 

[TheBigA]

Tar and feathering are called for in this situation but did not happen.

Tar & feathering is vigilante justice. It's when the public takes the law into its own hands. That is not how corporations are run in the United States. We live in a land of laws and courts. If employees feel they were harmed by their company, they can take their employer to court. That's how things work.

I know we live in a reality-show world, where everyone thinks they have the power to say "You're fired" to the boss, or kick someone off the island. That's not how the game is played in real life.

There should not be any second chances especially when there are so many COMPETENT broadcasters who would run the post bankruptcy Citadel in a more efficient, professional manner.

As Tom Taylor reported, there are members of the Board who ran broadcasting operations of similar size. Jack Sander is certainly a competent broadcaster. So is Billy Campbell. These are people who have run successful operations, and they have the time to keep a close watch on the situation.

 

[SirRoxalot]

The way that "corporations are run in the United States" - especially when you have a board stacked on your side - is that you end up with a platinum, diamond-encrusted parachute that makes it TOO EXPENSIVE to fire your ass. I don't know if that's the case here, but it wouldn't surprise me.

There's plenty of dirty work coming up. If all of the former Citadel contracts are cancelled, then there could be some major restructuring in the works. If the bankers want to minimize costs, then they've got the right guy. If they want to grow the business, not so much.

Gr8oldies has a point, though. Who else would want this job? Bill Stakelin?

 

[smartestguyintheroom]

Let me clarify, Big A, that when I say "tarred and feathered", I'm speaking metaphorically, as I'd assumed you were in your original post. Corporate vigilante justice is called for here as a direct cause and effect to the total incompetencies exacted upon Citadel by these two in the past. This is EXACTLY the way the game SHOULD be played when you have increasingly poor corporate management, for which these two are poster children!

Employees are expendible so individuals like Farid and Judy can take more and give less. And please don't insult anyones intelligence about litigating against this group. They had the foresight for a judge to seal all contract issues. A really smart radio manager, Mitch Dolan, took them to court. He had the resources to fight. He didn't win. How do you suppose average employees pay for this dragged out process? They have no jobs!

You don't seem to agree these two destroyed a company, and now are continuing with a second chance. All due respect to Tom's reporting on the new board, the proof will be how they operate going forward and whether this board has the stones to execute their fudiciary responsibilities with regard to the incompetencies already shown by Farid and Judy. A new board should handcuff these two (again figuratively, not literally..although that's not a bad idea) and micromanage them on every detail in the same ruthless, cold, condescending way Judy handles her people. That would be a taste of vigilante justice we should all witness and savor.

Then there is the upcoming IPO from the newly organized Citadel. As Marisa Tomei's character says in My Cousin Vinny: "...oh my God, what a f***in' nightmare"!

 

[TheBigA]

Corporate vigilante justice is called for here as a direct cause and effect to the total incompetencies exacted upon Citadel by these two in the past.

Maybe you can explain to me how that would happen. The stockholders really didn't do much as the ship went down. No big stockholder meetings or mutinies, and I've been in meetings where that's happened. So the ship went down and now the banks seem satisfied with keeping the management. You're right that employees don't have much recourse, although they had a company stock match in their retirement plan. But companies have all put working in their employee agreements that employees are "at will," which means they show up and work because they want to. That doesn't leave much recourse.

You don't seem to agree these two destroyed a company, and now are continuing with a second chance.

I don't get into the judgement game. I don't work there, and I never have. So it doesn't matter to me one bit. As I said, I'm not into playing vigilate. The only thing I see that they did wrong was follow the will of their Board and stockholders by buying ABC Radio. At the time, it seemed like a great idea. They wanted to be a big market player. They gambled and lost. They didn't have to return ABC to Disney for a refund either. On the surface, you would have thought that might have happened, but it didn't. So they're left to fix what they broke, under tighter scrutiny, with the potential of clearing their name and making a few extra bucks if they succeed.

 

[Element9]

Oy! Of course Disney didn't want the ABC (major market) stations back, they'd been pillaged by Citadel. Some people here write about the exploits of Suleman and Ellis as if their inept management of Citadel had no harmful impact on the lives of employees former and present. Nuts! Families whose insurance benefits were cut off; kids who had heart problems and could not receive treatment; a guy from Buffalo who, while suffering from cancer, was fired and had no health benefits... they all know better. Classy company, Citadel. Classy upper management, too. In any West Side bar, the term "POS" would be applied. Apparently Suleman and Ellis have no trouble sleeping at night.

I concur, "tarred and feathered" is a strong metaphor. It might better be replaced with something less extreme. How about, "Put them in stocks with a ring of rattlesnakes at their feet." It's too bad Suleman can't be charged with a criminal act, such as "bilking investors and shareholders, having caused serious harm and destruction to a publicly held company, causing physical and emotional injury to employees former and present," then tried, convicted and sent to Attica where he could serve a few years as Vito's cigarette boy. Tsk, tsk... so nasty. How about deporting Suleman to Britain, or back to his birthplace, Madagascar. I wonder if this guy's even a citizen of the United States? The guy's a louse. And Mr. Neverwrong, save it. I won't be convinced otherwise.

-9-

 

[gr8oldies]

Was anyone at Citadel ever promised lifetime guaranteed employment? Any other company?

 

[Mike Sheridan]

Was anyone at Citadel ever promised lifetime guaranteed employment? Any other company?

You miss the point. With a serious illness the company could have kept him on the payroll and insurance but the fired him probably because of his illness.

The little computer company I worked for had an employee who developed brain cancer. They kept her on the payroll and made sure she had benefits. They were not really equipped to do that they didn't have to. It's called class. I don't expect lifetime employment I got laid off from the same company a year or two later.

There was also a man who quit his job at WSOC radio/TV in Charlotte to go to a bigger market with more pay. He came down with a crippling ailment that made it impossible to take the new job. WSOC hired him back and he worked there for many years till he retired.

 

[TheBigA]

Families whose insurance benefits were cut off; kids who had heart problems and could not receive treatment; a guy from Buffalo who, while suffering from cancer, was fired and had no health benefits... they all know better.

I think everyone should learn an important lesson: Don't depend on company-paid insurance. Buy your own insurance with your own money. That's still no guarantee that the insurance company won't screw you, but at least you're the one responsible, not some company. These company plans aren't that good to begin with. Have you ever read the fine print? You might get $25,000 in life insurance. There are better plans available through your college alumni association. Most companies require the employee to pay for family members. It's not free anymore. Or don't get sick. You think the debate last year about health care was just politics? Ha! Get in the game and learn what the real story is with insurance.

It's too bad Suleman can't be charged with a criminal act, such as "bilking investors and shareholders, having caused serious harm and destruction to a publicly held company, causing physical and emotional injury to employees former and present," then tried, convicted and sent to Attica

There isn't a single thing he did that was illegal. And if there was, all the people who worked for his company could be equally charged with aiding and abetting. How 'bout THEM apples. Because you made it possible. You are an at-will employee with no rights to anything. Why would anyone take such a job today? Why would anyone sign an employee agreement giving the employer those rights? I have no idea. But they do.

 

[Element9]

There isn't a single thing he did that was illegal. And if there was, all the people who worked for his company could be equally charged with aiding and abetting.

And you are a member of what State Bar, sir? To the best of my layman's knowledge and reading, "aiding and abetting" (at least in NY) requires an individual to be part of the decision-making committee as an officer of the company/corporation or member of the board of directors.

 

[SirRoxalot]

Relax, E. A couple of things are pretty obvious.

1. TheBigA is NEVER wrong. Even when the evidence is staring him in the face.

2. He lives in a different world than us working stiffs. Even people who had contracts with Citadel got stiffed on benefits, vacation time, and work agreements. Why didn't they sue? Because they needed the job while radio as an industry was dumping employees left and right, and because the only people who would have made anything out of the suit were lawyers.

3. You should become independently wealthy and not trust the corporation that you provide services for to provide what they promise. You may be their product, but don't expect them invest in their product.

4. If it ain't illegal, the fact that it's immoral is irrelevant. That's the world he lives in - which is probably how he became "independently wealthy".

Anybody here want to volunteer to work for "TheBigA"? And, I do mean volunteer, 'cause he'll do his best to not pay you.

 

[Debaser]

Relax, E. A couple of things are pretty obvious.

1. TheBigA is NEVER wrong. Even when the evidence is staring him in the face.

2. He lives in a different world than us working stiffs. Even people who had contracts with Citadel got stiffed on benefits, vacation time, and work agreements. Why didn't they sue? Because they needed the job while radio as an industry was dumping employees left and right, and because the only people who would have made anything out of the suit were lawyers.

3. You should become independently wealthy and not trust the corporation that you provide services for to provide what they promise. You may be their product, but don't expect them invest in their product.

4. If it ain't illegal, the fact that it's immoral is irrelevant. That's the world he lives in - which is probably how he became "independently wealthy".

Anybody here want to volunteer to work for "TheBigA"? And, I do mean volunteer, 'cause he'll do his best to not pay you.

What you said. (I also get the feeling that The Big A is a died-in-the-wool conservative.)

There is little to no difference between Fagreed Suleman and one of the clowns from Goldman Sachs who has destroyed the economy for his own personal gain. Just like these guys discover loopholes and twist the laws to suit their needs, so should the government find a way to put them all in prison and take their ill-gotten gains away. The cynic in me says it ain't gonna happen, but it's a nice fantasy to have that those who are morally bankrupt will get their comeuppance in the end.

 

[John C]

(from "The Big A")

I don't get into the judgement game.
[/quote]

You can seriously type that on this board, Big A? ??? ;D

 

[T_Magoo]

"I think everyone should learn an important lesson: Don't depend on company-paid insurance. Buy your own insurance with your own money."

So that's what this is Mr. Know-It-All? An insurance lesson?

Eight years ago I had all the insurance I needed. I paid for some and so did they. I was covered for everything. I even had a cancer policy with a 3rd party company. Why should I have something separate and apart from what I already had? Who goes to work for someone thinking up front, "Man am I gonna get screwed on my coverage from these guys. Better buy some extra!"

I feel like such a fool to not have done everything the way you wanted me to...of course I'm sure my former employer would have treated me differently if I just mentioned Big A at my exit interview...(which was done via courier on Thanksgiving. And they even used the cheap courier - DHL.). BTW...They were hoping that I just left this earth...if that would have happened, my wife would have done better than $25K. Sorry to disappoint you on that one.

You kids on this board should be writing all these things down...this boy's giving us valuable life lessons for free! He's spot-on about health care and politics, but I didn't have those problems eight years ago. My problem wasn't about insurance, politics or "Them Apples," it's with a company that didn't care about my welfare...period.

Big A...shut up. You don't speak for me or about my situation with any knowledge of what happened. My story is just a freakin' counter-point to an argument so that you get under someone's skin. Again...shut up you self absorbed blowhard.

 

[Seltzer]

A few things you might not understand:

First of all, due to the bankruptcy, his previous contract, like ALL contracts the company had, was canceled. So he was basically working without a contract.

Second of all, it's for less than he was making before. No consolation to those who want him tarred and feathered, but that's the situation.

Third, if he fixes the company, at least to the owners satisfaction, he should share in the rewards.

So it's not exactly a "reward." A reward would be that the banks forgive the debt, and let Farid do whatever he wants. They didn't do that. They still control the company, not him.

If he gives the banks what they want, THEN they will reward him. They're not there yet. What they want is their money back with interest.

The point is---------NO WAY IN HELL he should have been given a second chance. His decision to buy the ABC properties proved to be his downfall. God help me if I should prove to be as incompetent and be able to keep my job.