Comcast Corp. awarded its new chief financial officer Michael J. Cavanagh, a former top JPMorgan Chase & Co. banker, a pay package worth $29.7 million to join the largest U.S. cable company.
Cavanagh, 49, was hired by Comcast after spending less than a year at private equity firm Carlyle Group LP, where he was recruited to be co-president. He previously served as a close deputy to JPMorgan Chief Executive Officer Jamie Dimon for more than two decades.
His compensation at Philadelphia-based Comcast includes a $10 million restricted-stock signing bonus and another stock award of $2.5 million, both based on performance. He’s also getting a $10 million contribution to the company’s deferred compensation plan and a $1.8 million salary, according to a filing Monday. Cavanagh is eligible to receive a cash bonus of three times his base salary, or $5.4 million.
Cavanagh is joining after the collapse of Comcast’s $45.2 billion proposed takeover of Time Warner Cable Inc. last month in the face of regulatory hurdles. The end of the deal, more than a year after it was announced, ratcheted up pressure on Comcast to chase growth by other means, from mobile communications in the U.S. to expansion overseas.
As Americans increasingly choose to watch programs online rather than on television, Comcast has bolstered its Internet business and now has more Web subscribers than cable ones.
Many observers thought Comcast would choose a new CFO with a technology background given how the cable industry’s future is tied to online video and high-speed Internet, said Amy Yong, a New York-based analyst for Macquarie Group Ltd. The decision shows Comcast’s desire to “keep its balance sheet pristine and nimble so they can move quickly,” Yong said.
The shares fell 1.1 percent to close at $57.77 in New York. They are little changed this year, while the Standard & Poor’s 500 Index has risen 2.3 percent.
Comcast said it hired Cavanagh after a nationwide search to replace Michael Angelakis, who said earlier this year he would step down to establish a new strategic company. In a statement, Comcast Chief Executive Officer Brian Roberts called the new CFO “a world-class executive with significant experience leading and overseeing large companies with multiple, complex businesses.”
Cavanagh, who was chief financial officer at JPMorgan after its merger with Bank One and during the financial crisis, was seen internally as a potential successor to Dimon, a person with direct knowledge of the matter said last year.
Cavanagh joined Carlyle as co-president and co-chief operating officer in June last year. He will surrender about two-thirds of the $32 million in Carlyle shares he received as part of his compensation package, which offset shares of JPMorgan he forfeited when he left the New York-based bank, according to a person familiar with the matter.
The executive will receive deferred compensation contributions and equity this year to make up for what he would’ve gotten from his previous employer, Comcast wrote in his employment agreement. It will be consistent with compensation set forth for 2016, when he is scheduled to receive $4 million in options and $4 million in restricted stock, according to the filling. Comcast will also credit an additional $7.76 million to his deferred compensation account during the term of the agreement, which lasts until Dec. 31, 2019.
Angelakis, who had joined Comcast in 2007 from private equity firm Providence Equity Partners, announced the creation of his new firm in March. The company will have capital commitments of as much as $4.1 billion, with $4 billion coming from Comcast. Angelakis will invest at least $40 million personally.