Allan Sloan is one of our very favorite columnists and we were delighted to see him take on the serial shareholder-value-killer Warners in this column, recommending that the people involved in these value-destroying deals share the pain.
According to Refinitiv, a data analytics company, AT&T investment bankers got $93.5 million for putting the deal together in 2018 and stand to get another $48.3 million for taking it apart. Assuming a 50 percent dividend cut, asking the bankers to give up the same percentage of income that shareholders are losing would run a bit over $70 million.
AT&T’s directors, by my read of public filings, earned base fees of $140,000 in cash and $170,000 in stock in 2018 — and, as the Time Warner debacle became increasingly apparent, gave themselves a raise to $140,000 in cash and $220,000 a year of stock for 2019 and 2020. That’s $1.03 million each (not counting various extra fees directors get for serving on committees.) So if the directors, who were responsible for approving the deal, gave up half their basic fees, as I think they should if there’s a 50 percent dividend cut, it would cost them about $500,000 each.
Randall Stephenson, AT&T’s chief executive when the Time Warner deal was done in 2018, was paid a total of $60.1 million of salary and bonuses for the past three years, by my count. He would be on the hook for $30 million if my proposal were accepted.
Which, of course, it won’t be. No company has ever done such a thing, as far as I know. The case of the current chief executive, John Stankey, is less clear. He earned a total of $40.9 million for the past three years, by my count. I’m not sure how big a role he played in the takeover, so I don’t know how much, if anything, he should be asked to give back.
Corporations, boards of directors, regulators and politicians talk a lot about fairness and social responsibility these days. What I’m proposing here — call it the Sloan Fairness Doctrine — would set a good example. My doctrine has no chance of being implemented this time. But if enough people in powerful positions get upset enough, maybe it will happen next time.The shareholder debacle behind AT&T’s plan to combine WarnerMedia with Discovery – The Washington Post