Adelphia Communications Corp.'s board announced yesterday that it agreed to hire two former AT&T Broadband executives to bring the cable television company out of bankruptcy.
William T. Schleyer, former chief executive of AT&T Corp.'s cable unit, has agreed to become Adelphia's chairman and chief executive. Schleyer is bringing with him Ron Cooper, AT&T Broadband's former chief operating officer, who agreed to be president and chief operating officer.
Before Schleyer and Cooper can take the jobs, a federal bankruptcy court in New York must approve their employment contracts. Adelphia filed for Chapter 11 bankruptcy protection last June after accusations that the Rigas family, which founded the company 50 years ago, bilked it of more than $250 million and failed to disclose more than $2.3 billion in loans. The company has severed ties with the Rigases and is pursuing civil fraud charges against several members of the family.
Although the board scaled back its plan to pay Schleyer and Cooper more than $60 million, a group of Adelphia shareholders criticized the new deal as "grossly excessive and wholly inappropriate." A letter sent to the board by the shareholders said Schleyer and Cooper have been guaranteed pay of $23.9 million and have other options and incentives expected to bring the men a total of $41 million over three years.
Cooper declined to discuss the employment deal in an interview yesterday, noting that it will become public next week when it is scheduled to be filed in bankruptcy court. "I am not sure where that number comes from," Cooper said. The board members "looked at comparables within our industry, and they believe as do Bill and I that this is a fair compensation arrangement," he said.
A source close to the company said Schleyer's package includes an annual salary of $1.3 million plus a signing bonus of $1.7 million to be paid over three years. Schleyer would also get a bonus of $1.3 million a year if he meets performance guidelines set by the board. In addition, if the company emerges from bankruptcy, he would be granted stock worth a maximum of $10.2 million.
The source said Cooper has agreed to a similar deal, but for slightly less money. Cooper's base salary would be $850,000 with a performance-based bonus of $850,000 each year. He is guaranteed a signing bonus of $1.1 million to be paid over three years. Cooper could also be granted stock worth no more than $6.8 million, the source said.