Supposedly, the late Lucille Ball once said, “If you want something done, ask a busy person.” Maybe the directors of Clear Channel Outdoor Holdings, (CCO) agree, having just persuaded Robert “Bob” Pittman to become the CEO and a director of parent-company CC Media Holdings, Inc., as well as the CEO and a director of Clear Channel Communications, Inc., and the Executive Chairman and a director of Clear Channel Outdoor Holdings.
You probably recall that Clear Channel Communications was taken private in an LBO in 2008 for $17.9 billion. But in an article in Forbes last weekend, footnoted friend Eric Savitz mused whether the company’s solid growth, large debt levels, and opportunities for growth might tempt Clear Channel’s powers-that-be to take it public again. As Savitz emphasized in the piece, Clear Channel hasn’t talked about that possibility publicly.
Wearing multiple CEO and director hats — even for related companies — may be demanding, but Pittman’s jobs come with some nice rewards, as disclosed in the 8-K that the company filed late yesterday afternoon. Pittman starts with a base salary of $1 million, a number that “shall be increased at the discretion” of the board or compensation committee. If he achieves all of his performance objectives, he is eligible for a performance bonus “not less than” $1.65 million. He’ll also get all the usual goodies that top executives get – participation in the retirement, pension, incentive, and profit sharing plans, and protection if he’s terminated without cause – as well as the employee welfare benefit plans offered to “similarly situated” executives.
But what really caught our interest was this:
“During the term of his employment, [Clear Channel Media Holdings] will make an aircraft (which, to the extent available, will be a Dassault-Breguet Mystere Falcon 900) available to Mr. Pittman for his business and personal use and will pay all costs associated with the provision of the aircraft. If a company aircraft is not available due to service or maintenance issues, CCMH will charter a private aircraft for Mr. Pittman’s business and personal use.”
We can’t recall the last time we’ve seen such a blatant 8-K when it comes to corporate jet use. Keep in mind that a new Falcon 900 costs somewhere around $35 million. (There’s an interesting discussion here about the differences between the Falcon 900 and the other CEO-jet of choice, the Gulfstream V.)
But wait, as they say in those old Ginsu steak ads. Clear Channel is also giving Pittman a car and driver to squire the executive “in and around the New York area as well as anywhere else on company business,” as well as for his personal travel. And the company is paying for up to $25,000 worth of legal fees that Pittman incurred while negotiating his Employment Agreement.
Clear Channel also gave Pittman an option to purchase 830,000 shares with a strike price of $36 per share. The option will vest in five equal parts over as many years. And the filing discloses that the 706,215 shares that Pittman purchased last fall shall be deemed vested so long as he stays through at least November, 2013. That’s important because it precludes the company from exercising its repurchase rights, as set out in the parties’ November, 2010 Stock Purchase Agreement.
Pittman is no outsider, either to the company or the industry. For the past 11 months, he has worked as the Chairman of Media and Entertainment Platforms for Clear Channel Media Holdings. Since 2003, he has been involved in the entities of the “Pilot Group” private equity partnership; and, before that – he spent a few years as a top executive at one iteration or another of AOL Time Warner, Inc. And, as DealBook noted, he was also involved in the creation of MTV.
And, in fact, Pittman is going to do more than all the work that he’s taken on at Clear Channel. The filing adds that “Mr. Pittman will remain a member of the Pilot Group entities.”
Clear Channel may not be a Wall Street bank, but given this lush contract, it makes us wonder what the folks at Occupy Wall Street would think of this. Even many of the bankers have given up on the personal use of their company’s corporate jets.
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