AT&T CEO gets $2 million pay cut following T-Mobile defeat

CEO Randall Stephenson will see his total pay for 2011 drop by more than $2 million over his role in the failed bid to buy T-Mobile.

AT&T CEO Randall Stephenson will get a $2 million pay cut for the failed T-Mobile deal.
AT&T CEO Randall Stephenson will get a $2 million pay cut for the failed T-Mobile deal. Stephen Shankland/CNET

AT&T CEO Randall Stephenson will take home $18.7 million in compensation for 2011. But he could've earned a cool $20 million or more had the deal for T-Mobile gone through.

Following the T-Mobile debacle, AT&T's board elected to cut Stephenson's pay for last year by $2.08 million from the $20.2 million he earned in 2010, according to a regulatory filing yesterday.

"For the most recent short- and long- term payouts, the Committee considered the T-Mobile transaction costs in determining compensation payouts for Mr. Stephenson and the other Named Executive Officers..." AT&T said in its filing. "As a result, despite strong operational performance, Mr. Stephenson's compensation was reduced by more than $2 million, including a 25 percent cut in his short-term award, a significant reduction in his payout percentage relative to other managers."

The 25 percent refers specifically to a cash bonus, while an additional 6 percent in stock options was also slashed, according to the Associated Press.

After announcing the $39 billion T-Mobile proposal last March, AT&T admitted defeat last December in the wake of strong opposition by federal regulators.

But the decision to squash the merger will be a costly one. As compensation for the failed bid, AT&T will have to hand over $4.2 billion to T-Mobile in the form of cash and spectrum rights, a huge amount compared with breakup fees typically seen in such deals.

Following the thwarted bid, Stephenson blasted the FCC for blocking the merger , arguing that the government's process for regulating and approving such deals is fluid and inconsistent.

 

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