Just months into his job as head of Time Warner Cable Inc. (TWC), Rob Marcus is set to receive a severance payment of $79.9 million in cash, equity and benefits because he’s selling the company to Comcast Corp. (CMCSA)
The golden-parachute payout includes $56.5 million in restricted stock units and unvested options and $20.5 million in cash, according to a filing today. There is also a $2.5 million bonus assuming that Time Warner Cable’s performance remains on target through the merger’s completion.
Marcus, 48, had been CEO for less than two months before agreeing to Comcast’s $45 billion takeover offer in February. The parachute payout represents an almost eightfold increase over his compensation of $10.1 million in 2012, when he was chief operating officer, a position he had held since 2010.
The deal, which would combine the two largest U.S. cable companies to gain more leverage in negotiations with suppliers and TV-network programmers, awaits regulatory approval.
Before deciding to make its offer for Time Warner Cable, Comcast had held talks dating back to October on a possible joint bid for the company with Charter Communications Inc. By February, Comcast CEO Brian Roberts concluded he could not come to terms with Charter, opting instead to contact Marcus about the possibility of a direct offer for Time Warner Cable, according to the filing, which included details of the process leading up to the deal.
In their discussions, Marcus had pushed for Comcast to agree to pay a termination fee if the acquisition fell through. Both Comcast and Time Warner Cable cited regulatory approvals as a potential hurdle to the deal.
Roberts, however, insisted on omitting the requirement, and after Marcus consulted Time Warner Cable’s board, the company agreed to leave out the fee.
On Feb. 6, Comcast Chief Financial Officer Michael Angelakis met with Marcus to discuss terms for a deal and offered $150 per Time Warner share. Marcus countered with $160 a share in a stock-for-stock swap. Six days later, the two companies agreed to the deal, in which Time Warner Cable investors will receive 2.875 Comcast shares for each of their shares.
While that agreement put the value of the deal at $158.82 a share the day the transaction was announced, Comcast shares have since fallen, bringing the offer down to about $144 a share.
In addition to Marcus, other Time Warner Cable executives are due to receive lucrative exit compensation in the deal. CFO Artie Minson, who joined the company in May 2013 from AOL Inc., could get a payout of $27.1 million after the sale, Comcast said. Chief Technology and Network Operations Officer Michael LaJoie may be due $16.3 million, while COO of Business Services Philip Meeks may get $11.7 million.
Marcus’s payout wouldn’t even put him in the top 10 of golden parachutes in a Bloomberg review of proxy data last year. At least a dozen executives stood to receive more than $100 million, including McKesson Corp. CEO John Hammergren, who was eligible for $303.4 million as of June.
To contact the editors responsible for this story: Sarah Rabil at email@example.com Crayton Harrison, John Lear