Underwater Boarding

[Element9]

Those Citadel stock grants to the execs magically turned back into stock options. Texas-based Citadel investor R2 (R squared) blew the whistle on what it said were tens of millions of dollars worth of improper outright grants of stock – mostly to CEO Farid Suleman. He could’ve made $40-50 million or more. And the board members who went along were in for paydays of $1.3 million each.

To squelch the static in bankruptcy court and in the court of public opinion, Citadel agreed to rescind the grants and return to the original plan of issuing incentive-building stock options.

Now we get the SEC filings for five top Citadel executives, and Farid still gets far more than the other four. But both sets of options being offered (priced at $28 and $32) are underwater. Citadel’s post-bankruptcy stock closed yesterday at $24.50 on the over-the-counter pink sheets.

So as Citadel continues its recovery, here’s what Farid has tacked on his wall. He has 1,897,193 options at $28 ($53,121,404) and 632,398 at $32 ($20,236,736).

COO Judy Ellis has nearly 100,000 options at $28 (@$2,200,000) and 33,265 at $28 ($931,420).

General Counsel Judith Orr and CFO Randy Taylor both have about 80,000 options at $28 and 26,613 at $32. And Senior VP of Finance & Administration Patricia Stratford has 56,137 at $28 and 18,711 at $32. The options begin vesting next June 3 and vest over the next three years. They expire in 2020.

Oh, the directors are also incentivized. They get 47,434 options at $28 ($1,328,152) and 15,811 at $32 ($505,952).

Being the fair and trusted CEO that he is, Suleman will no doubt offer Citadel employees options on restoring vacation time, salaries and re-hiring once the "strike price" is reached.

 

[yugoidar]

Damn, 9! There you go again, picking on poor Farid!

 

[SRP]

http://boards.radio-info.com/smf/index.php?topic=179117.msg1568686#msg1568686

QED.

 

[SirRoxalot]

Yeah, I'm gonna chime in here too. So, "9" is pointing out - and quantifying - the enormity of Farid's potential money grab, and the pocket-lining being provided to the directors who are approving it. What's your point, SRP, that nobody should comment on it, or that no one should care?

The guy who led the company into bankruptcy is being rewarded for leading the company through bankruptcy. Millions of dollars could be put in his pocket if the stock goes beyond the strike price. At least Farid has an incentive to get the stock price up. What matters is how he gets the price up - whether he creates a short-term bump so he can grab a quick bundle of cash, or perhaps creates long-term growth. The terms of the options may address that issue, and tell us more about the governance of the company. If I were planning to invest in Citadel's new IPO, I'd be VERY interested in those terms. Overall, this is a more palatable compensation plan than the outright stock grants that were initially planned. BTW, I doubt that Farid will have to come up with cash out of pocket to exercise his stock options. It's very likely that an interest-free loan will be available should he decide to exercise his options.

Meanwhile, a lot of good people remain on the beach, and Citadel has done little to restore the pre-bankruptcy cuts while profits are rising. A lot of people are doing too much with too little, for too little compensation. The terms of contracts that were voided by Citadel during the run-up to bankruptcy remain unfullfilled. Yes, I know that legally that's acceptable. Morally? Not so much. I suspect that's why several people fled Citadel to go elsewhere, where they're better compensated and more appreciated.

Now, SRP, you may consider losing some of the people who have recently fled Citadel Buffalo as a good thing, but I'm not sure that many people in the building on a daily basis agree with you. Keep in mind - every million dollars that goes to executive compensation could fund about a dozen decent paying positions for the folks who actually create and sell Citadel's product.

 

[heydaybegone]

Rox - you are on-target (unfortunately)

Welcome to America!!

This business has been so "into itself", that it has failed to acknowledge the ramifications of "Publicly Held Company" status.
Bitch & moan here on the boards....and rightfully so...but it doesn't change who has the purse strings.
Point being...Rox...your right on.
HDBG

 

[JustPastBuffalo]

...Bitch & moan here on the boards....and rightfully so...but it doesn't change who has the purse strings. Point being...Rox...your right on. HDBG

I'm not taking you to task HDBG, but I don't understand why some posters and readers equate the posts here as a "bitch and moan" session in the first place. This is a town square (civic, not corporate name) public forum and comparatively speaking, the posts here are more reasoned (although not without an occasional degree of snarkiness and humor) than most Radio-Info boards. Additionally, we're all (free) content providers. All across the Radio-Info boards, in various forums, there are noted posters who offer advice, opinions and analysis, from production people, to engineers, managers, air talent and arguably the most important component, listeners. Each has an opinion and perspective.

As to the topic of this thread, there is one curious yet important notation in the Taylor On Radio story regarding Citadel's stock price. To understand some of the dynamics of stock market trading, it helps to know the definition of the term "Pink Sheet" which can be found at Investopedia and Wikipedia.

As it was explained to me by a family member who is conversant with high finance (in my case, something more complex than balancing my checkbook), Pink Sheet stocks typically do not normally trade in volume at levels exhibited by stocks traded on the NYSEX, AMEX or Nasdaq. The variable between "bid" and "ask" is another critical component as it relates to the viability, appeal (or lack thereof) and volatility of the Pink Sheet or OTCBB stock. For example, one might purchase a block of a certain company's Pink Sheet stock (not necessarily Citadel) at $25, and offer to sell it at $25.25, but that sale could take days, in some cases weeks, for a buyer to step up and bid $25.25.

As a former Citadel employee, it is easy to understand how and why those inside and outside the company might look with interest, dismay or foreboding at the compensation terms noted in the Taylor On Radio story. Should these people be expected to read the news without questioning, forming an opinion or commenting? Personally, I hope the company comes around and radio roars back, if not for my sake, then for those presently employed.

 

[Element9]

I hope the company comes around and radio roars back, if not for my sake, then for those presently employed.

So according your logic, you hope Farid and his clan score their $50 million+ payoff in hopes that he'll wave a magic wand and restore jobs and benefits? Bwahhh-hahhhh. You're funny.

 

[SRP]

I hope the company comes around and radio roars back, if not for my sake, then for those presently employed.

So according your logic, you hope Farid and his clan score their $50 million+ payoff in hopes that he'll wave a magic wand and restore jobs and benefits? Bwahhh-hahhhh. You're funny.

Can't even take Thanksgiving off from your repetitive rants, 9? And now you take Jim Pastrick to task - a person FIRED from Citadel?

How frickin' pathetic.

As a former Citadel employee, it is easy to understand how and why those inside and outside the company might look with interest, dismay or foreboding at the compensation terms noted in the Taylor On Radio story.

I agree. But in the case of our two frequent Citadel bashers, they dig out every single Citadel story - not just the headline makers - post it here and say either Farid or Judy should be in jail.

It's like your loud obnoxious Uncle Lenny who uses the F-word in every sentence he says. You know what he's going to say even before he opens his mouth. And it gets a little old after awhile.

Happy Thanksgiving!

 

[SirRoxalot]

IOW, SRP is suggesting that we "pay no attention to the man behind the curtain"...

BTW, the story WAS a headline for "Taylor on Radio-Info". You might want to subscribe. You might learn something.

 

[SRP]

IOW, SRP is suggesting that we "pay no attention to the man behind the curtain"...

BTW, the story WAS a headline for "Taylor on Radio-Info". You might want to subscribe. You might learn something.

Oh, here we go again. Another thread headed to TIO. But at the risk of sending it to the board's version of Siberia...

I was a CHARTER subscriber to TRI, Rox. But thanks for your feeble attempt to "school" me. Maybe you and 9 need to get some anger management training. You two might learn something.

 

[Radknowski]

It's like your loud obnoxious Uncle Lenny who uses the F-word in every sentence he says. You know what he's going to say even before he opens his mouth. And it gets a little old after awhile. Happy Thanksgiving!

Hey, sounds like my Uncle Thadeus' wife, Aunt Danusha! She comes over every holiday, well oiled and looking for more. Although she doesn't hurl f-bombs, she gets more salty with every successive Pabst, then it's off to the piano to sing, loud and off key, with my Aunts Helen and Sophie. The kids, as if they were chased by wolves, flee to the family room to play with the X-Box. Meanwhile, Uncle Oskie and rest of the adults are driven further to drink.

 

[Element9]

Some will attempt to reframe the issue here. The issue and the thread are about the dishonesty and utter lack of integrity of a CEO who attempts to bend and circumvent the rules to benefit his bank account at the expense of shareholders and employees. Period.

 

[Paul_Warren]

Like it or not, Farid rode Mel's coattails into the league of radio execs valued in the tens-of-millions of dollars. You can't blame him for getting what the market will bear. The real sadness is for the collusion between the big groups and the FCC years back that allowed abandoning service to the local market as a priority. We wouldn't be talking about any of this if that still mattered.

 

[heydaybegone]

I'm not taking you to task HDBG, but I don't understand why some posters and readers equate the posts here as a "bitch and moan" session in the first place. This is a town square (civic, not corporate name) public forum and comparatively speaking, the posts here are more reasoned (although not without an occasional degree of snarkiness and humor) than most Radio-Info boards. Additionally, we're all (free) content providers. All across the Radio-Info boards, in various forums, there are noted posters who offer advice, opinions and analysis, from production people, to engineers, managers, air talent and arguably the most important component, listeners. Each has an opinion and perspective.

Sir Jim...you can take me to task (I have a hard shell) if that was my intent of the comment. And your further comments are absolutely valid. We are on the same page!! Wording is such a bitch. The point was...due diligence to the "content", and maybe understanding what's going on..provides support for your rebuttal. After a certain point (yet to be defined on these boards ;D, the posts convert from your stated list...to just "bitching & moaning" (AKA - an opinion). I can't say nicely "they just don't get it" when it comes to the "dollars & cents" business...so we pick other words to use (often seen as "raising your voice to be heard better" :-\)

That's all
HDBG

 

[heydaybegone]

We wouldn't be talking about any of this if that still mattered.

A former colleague chimes in with a reality check. Well stated.

HDBG

 

[cee]

collusion

Yes, there's the exact word. Special interests and government working in collusion. 'nuff said.

 

[JustPastBuffalo]

Collu$ion, indeed. The NAB's finest hour as it influenced members of the Hou$e of Repre$entative$ and $enate to write and approve legislation that included sweeping changes related to radio and television in a bill that began as an overhaul of regulations pertaining to the telephone sector, the Telecommunications Act of 1996. It's highly unlikely ownership rules will be rolled back to pre-1996, let alone 1980 era standards. The world has moved beyond analog to "zeros and ones" and the economy has been put on reset. Most significantly, too much money has been spent by very large, powerful corporations. Not all of it on purchasing radio properties, if you know what I mean. Our friend Paul Warren hit the nail squarely on the head.

 

[cee]

Collu$ion

Yes, better way of spelling that word. And sadly, the TelCom Act is only a small part of this. Washington is all pay for play. Legislation to the highest bidders.