Charter CEO Tom Rutledge’s compensation package soars to $98.5 million
Cable company Charter Communications Inc. ballooned in size last year, and the compensation package of its chairman and chief executive, Thomas Rutledge, skyrocketed.
Rutledge, 63, was awarded a compensation package last year valued at $98.5 million, according to a filing this week with the Securities and Exchange Commission. The bulk of Rutledge’s 2016 compensation is to be paid through stock and option awards that he can collect over time if Charter’s stock reaches new highs.
Charter is the largest pay-TV company in the Los Angeles region, with its Spectrum service in more than 1.8 million subscriber homes. Last year, the company acquired the much bigger Time Warner Cable and the smaller Bright House Networks. Rutledge signed a new five-year employment contract in May after the mammoth merger closed.
The bulk of the package — $78 million — came in the form of stock option grants that vest over several years. The options were allocated as part of his new contract. For Rutledge to exercise all of the options, Charter’s share price has to significantly increase in value.
For example, one-fifth of the options would be paid if Charter’s stock topped $455.66 a share and, for 60 days afterward, its average price stayed above that level. Another one-fifth would be payable if the stock exceeds $564 a share and similarly stays up.
On Friday, Charter’s stock rose 0.6% to $325.81 a share. The stock has climbed about 40% since the deal closed, despite the company’s challenges retaining cable TV subscribers.
“A significant portion of executive compensation is performance-based incentives,” Charter said in a statement. “The five-year long-term incentive program puts a substantial portion of executive compensation at risk … rewarding executives for performance that enhances long-term shareholder value.”
The company said that Rutledge will not be eligible for additional stock or option grants through 2020. His base salary is $2 million a year, and in 2016, he was awarded a bonus of $7.7 million in cash and $10 million in stock.
Rutledge’s 2015 compensation totaled $16.4 million, according to the proxy.
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