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CenturyLink Execs Got Post-Level 3 Payouts, Then Cut Bonuses, Raises
The Nov. 1 close of CenturyLink‘s $34 billion Level 3 Communications acquisition meant big bonuses for top executives, but employees haven’t been so fortunate.
Earlier this month, the company told employees it is suspending merit raises this year. This came after it told workers in December that it wouldn’t offer a holiday bonus as it has before because of reductions in operating cash flow.
According to filings with the Securities and Exchange Commission last June and November, top executives were awarded millions in bonuses tied to the close of the merger.
Mark Molzen, CenturyLink spokeman, said his company had no comment.
In November, CenturyLink confirmed that it was laying off more than 150 employees after the close of the Level 3 acquisition. About 165 employees were impacted by the layoffs, including 37 in Louisiana, where the company is based.
Jeff Storey, CenturyLink’s president and COO, and previously Level 3’s president and CEO, was awarded a $6.6 million signing bonus to be paid in two equal installments. Also, CenturyLink CEO Glen Post was given a $3 million “integration award.”
Stewart Ewing, who previously served as CenturyLink’s chief financial officer, received a $1 million discretionary bonus based on his “performance related to merger integration activities over the past year.” And Sunit Patel, CenturyLink’s chief financial officer and previously Level 3’s chief financial officer, received a $1.3 million retention award.
A handful of Channel Partners readers expressed disdain toward CenturyLink leadership after news of eliminating bonuses broke, with one foreshadowing what we learned on Friday.
“Some workers haven’t had raises in (five) years (and) have also lost all sick time,” wrote Corpa Tellus. “But yet, they keep getting more (and) more while the employees get less (and) less.”
Typically these bonuses for retention and integration are part of the overall deal terms. It’s a real knucklehead move to know you’re getting these bonuses as an executive, that the bonuses are going to be made public through filings, and you announce that no one else is getting any kind of merit pay raise. Hmmm, must be democrats.
From what I was told by a VP at the company, originally, Level3 started the discussions, and then, stepped away. Two weeks after Level3 said they weren’t interested in merging, CenturyLink called up Level3 up and more-or-less pleaded for a merger. Level3 responded back “What do you think we’re worth”, and that’s how they made the deal, and it all got wrapped up.
At first I thought the VP at the company was telling a joke, but then, with a straight-face he said he was being serious. Considering that the $34B merger has resulted in a company whose total market cap is barely above $19B today, I should have stayed on to qualify for a golden parachute award, but the trouble is that I have more self respect.
Under Storey’s watch, he looked for ways to cut expenses, one of the first thing to go was any type of standardized processes, PMO and budgeting, new golf carts for all.