Survival of the fittest

[TheBigA]

Re: Survival of the FATTEST

They all have salaries, so they are paid in cash, in money. The stock or the options are incentives or given as bonuses and rewards.

But the salary is a small percentage of their compensation. In Farid's case, his 2007 salary, listed in the company's annual report, is $1,250,000, unchanged from 2006. But his compensation, which includes dividends on stock, is $11,215,000. I imagine his compensation for this year will be restricted to the actual cash, with no stock or bonus, due to the company's losses.

Obviously, no one will be shedding tears for him. But he's not making as much as he could have if the company had done better.

 

[SirRoxalot]

Corporate Obesity

You don't just look at "salary". You look at the entire compensation package. In most cases, "stock options" are included with a guaranteed price that the company will pay for those shares if the fat cat decides to sell. If the stock goes up, the fat cat can make an even bigger profit. If the stock goes down, they live with the "guaranteed" price from the company.

Farid made $11-million + last year. He'll make millions this year, despite the performance of the stock, the performance of the stations, or any other factor short of corporate bankruptcy. In case of corporate bankruptcy, he's likely a secured creditor. If the board prefers, he'll jump off the bandwagon with a platinum parachute that will cost the company tens of millions more. All this for a guy who's said - in public - that Citadel doesn't need sales people - the product sells itself. All they need are "order takers", who are paid a moderate salary, and no commission.

Mel Karmazin bought $12-million in stock when he signed on with Sirius. His net worth is reportedly in the vicinity of $1-Billion. Mel's also been well compensated since he came on board with Sirius. That $12-million is chump change for him.

 

[davideduardo]

Re: Survival of the FATTEST

[But the salary is a small percentage of their compensation. In Farid's case, his 2007 salary, listed in the company's annual report, is $1,250,000, unchanged from 2006. But his compensation, which includes dividends on stock, is $11,215,000.

Dividends are not compensation. They can't be. You get dividends on stock you alredy own, which you may have bought, either on the market or by excercising options or even by receiving outright grants. But it is not part of compensation... and, anyway, Citadel stock pays no dividends.

And stock option grants are usually calculated at the grant price. If soemeone has a million shares at a price of $10 a share, they "seem" to be $10 million. However, if the price you would sell the shares for is lower than the grant price, nobody will excercise their options.

 

[Stewy]

HEY, STOP IT! That means you Tibbs, Rox, Goat and RNR! Quit giving the idiots that have grounded the industry insight......they didn't listen before because 'they knew everything'. They read this stuff as you well know so for now just shut up and let them go broke!

We just need to help them determine the value of their properties as they bail, was about 75% of stick 3 weeks ago, now it's about 50%, come January they'll have to pay us to take them away.

I haven't been quiet on the boards because of broken fingers .... you know?

 

[Goat Rodeo Cowboy]

They read this stuff as you well know so for now just shut up and let them go broke!

That's neat, Stewy. Were you able to keep a straight face as you wrote that? ;D

What you have given us is a reason WE MUST continue to post. If they are going to pay someone to take their property, then the only way they can decide who gets the station and how much to pay us is by reading our messages to see who deserves to receive the prize.... or would that be a penalty?

 

[quadraphonic]

GRC, all this posting almost sounds like community involvement, and that is sure to cost you points if the current radio insiders are grading ya.

 

[TheBigA]

Re: Survival of the FATTEST

Dividends are not compensation.

Before you attempt to argue with me, read the annual report. There you will see that dividends are included in Farid's compensation. Page 26, subpart 1.

 

[TheBigA]

Re: Corporate Obesity

Farid made $11-million + last year. He'll make millions this year, despite the performance of the stock, the performance of the stations, or any other factor short of corporate bankruptcy.

Read the annual report. It spells all this out very clearly. Based on what is written, it is obvious that Farid will not receive any bonuses this year, any stock grants, or any dividends. And he'd be a fool to cash in any options.

And if the company files for bankruptcy, the Chairman (he is both Chairman and CEO) is partly liable (with the Board), and could be sued by other stockholders and creditors. He most certainly will NOT be a creditor.

 

[SirRoxalot]

Re: Corporate Obesity

Farid made $11-million + last year. He'll make millions this year, despite the performance of the stock, the performance of the stations, or any other factor short of corporate bankruptcy.

Read the annual report. It spells all this out very clearly. Based on what is written, it is obvious that Farid will not receive any bonuses this year, any stock grants, or any dividends. And he'd be a fool to cash in any options.

And if the company files for bankruptcy, the Chairman (he is both Chairman and CEO) is partly liable (with the Board), and could be sued by other stockholders and creditors. He most certainly will NOT be a creditor.

I guess that means that you've seen his "personal services" contract? You're privy to his terms of employment, and all agreements in place? Puh-lease. Standard contracts are only for the "little people". If the company folds, Farid's platinum parachute will inflate and carry him off to corporate Nirvana. Then he'll be free to pursue a position worthy of his talents outside of radio.

 

[TheBigA]

Re: Corporate Obesity

I guess that means that you've seen his "personal services" contract?

Once again, read the annual report. It's online.

If the company folds, Farid's platinum parachute will inflate and carry him off to corporate Nirvana.

The company won't be folding. No matter how low the stock goes. Ted Forstmann won't let it fold. If worst comes to worst, they just suck up the stock, take it private, and let the lawsuits fly.

The truth is that the problem isn't Farid. If it was, Citadel would be the only radio company in trouble. The fact that they're all in trouble, regardless of management, says the problem is bigger than a handful of executives.

 

[davideduardo]

Re: Survival of the FATTEST

Dividends are not compensation.

Before you attempt to argue with me, read the annual report. There you will see that dividends are included in Farid's compensation. Page 26, subpart 1.

You can't get dividends unless you own the stock. And if you own the stock, you "bought" it via excercising options (you pay the strike price, pocket the difference), grants (they give you stock) or purchase from another person or entitity (stock exchange, private deal, etc.). You can't get diviidends from stock you don't own, and if you own it, the stock may be compensation, not the dividends.

The only case, and it is rare, is if a grant is ex-dividend at the time of the grant and the dividends accrue to the new owner, the grantee. Since Citadel does not and has not paid dividends, the point is moot anyway.

 

[TheBigA]

Here's what the annual report says:

"Included in other compensation is $7,848,782 of dividends received on restricted stock, $2,110,548 as a payment of a "gross-up" for the tax differential relating to dividends received on certain equity awards."

As I said, dividends are included as part of his compensation.

 

[SirRoxalot]

Re: Survival of the Fattest

So, Farid doesn't get "regular" stock. He gets "special" stock. How fitting for a "special" guy...

 

[radiorob2.0]

Then there is the story of Regent Communications. The company focus was suppose to be small and medium market stations. However, the hierarchy used the company's nest egg to purchase a cluster in Buffalo. The CEO warned this was a bad idea but it happened, the CEO left the company. These days Regent is in the NASDAQ penalty box and the stock closed today at .13/share. You'll be happy to know if you invested $10,000 in Regent stock five years ago it is worth $216.31 today.

 

[davideduardo]

Re: Survival of the Fattest

So, Farid doesn't get "regular" stock. He gets "special" stock. How fitting for a "special" guy...

I think we are talking about restricted stock grants here. But different classes of shares are quite common, going way back to the first issueance of preffered shares, which behaved more like bonds. Today, one class may have greater voting rights than another, or some similar quality. And they are not "restricted" to broadcasting by any means.

 

[SirRoxalot]

Re: Survival of the FATTEST

Gee, thanks for clearing that up, David.

Us "special" folk appreciate it.

BTW, Citadel quietly cut a few more folks yesterday by "special" decree.

 

[davideduardo]

Re: Survival of the FATTEST

Gee, thanks for clearing that up, David.

Us "special" folk appreciate it.

BTW, Citadel quietly cut a few more folks yesterday by "special" decree.

And the stock market dropped another 5% or so, making the loss in the last year or so pretty close to 50%.

We are in a recession, and unemployment is way up in nearly every field. You can't pin that one on citadel.

 

[SirRoxalot]

Re: Survival of the FATTEST

And the stock market dropped another 5% or so, making the loss in the last year or so pretty close to 50%.

We are in a recession, and unemployment is way up in nearly every field. You can't pin that one on citadel.

Perhaps not, but I can blame Citadel for cutting people by decree from corporate, despite pleas from local management that the cuts will cost more in revenue than the salary will save. How about letting local management decide their own budget? Next, corporate will insist on more cuts because revenue has fallen faster than "the industry average".

Meanwhile, corporate has cut one body - Brian Jennings, Citadel Corporate VP/News/Talk/Sports format leader. Jennings had been with the company for more than fourteen years.

 

[TheBigA]

Re: Survival of the FATTEST

Meanwhile, corporate has cut one body - Brian Jennings, Citadel Corporate VP/News/Talk/Sports format leader. Jennings had been with the company for more than fourteen years.

Nope...several others over the past few weeks. All had been ABC veterans.

Still, the numbers are at the stations, not the home offices (of which there are several).