Time Warner Inc. signed a five-year employment agreement with incoming Chief Executive Jeffrey L. Bewkes and signaled that Bewkes would add the chairman’s title at the end of next year.
The media conglomerate, in a regulatory filing Friday, said Bewkes would receive annual base pay of $1.75 million, plus an annual target bonus of $8.5 million.
The base pay is a raise from his $1.25-million salary this year as president and chief operating officer, and the target bonus is up from $7.5 million.
Bewkes also will receive incentive pay of as much as $8.5 million in stock options, the company said.
Richard D. Parsons, whom Bewkes will succeed as chief executive on Jan. 1, had his employment contract as chairman extended through end of 2008, Time Warner said. His previous contract was to expire in May.
Parsons will receive base pay of $1.5 million and a target bonus of $2.9 million -- the same amount he was to receive in 2008 under his expiring contract.
Bewkes’ new contract has a provision allowing him to resign if the board does not name him chairman by Jan. 1, 2009. In such a case, he would not be entitled to severance pay but would be free to take another job in the industry immediately.
If Bewkes were fired during the term of the contract for any reason other than malfeasance, he would receive severance of two years’ pay and bonus but would be barred for a year from working for a competitor.