A 41% raise for 33% more work at Ascent Media…

June 8, 2011

Stop & Wires

The classic image of the hard-charging American CEO is pretty well summed up by that old cliché of giving 110%. But stereotypes, of course, can be misleading. Consider William R. Fitzgerald, chairman and chief executive of Ascent Media Group (ASCMA), who has just agreed to give his company 80%.

That’s 80% of his time, and if it’s any reassurance, it’s actually an improvement from the 60% he had previously committed to.

Here’s how the company described it in the 8-K it filed on Monday:

“Mr. Fitzgerald has agreed to devote no less than 80% of his business time, attention and energies to the performance of his duties as Chief Executive Officer of the Corporation. This reflects an increase from 60% in the Original Agreement.”

The change seems straightforward enough: a 33% increase in his time commitment. If you’ve been reading SEC filings (or this blog) long enough, you know what’s next: a raise. In this case, Fitzgerald is seeing his salary rise to $600,000 from $426,000. By our math, that’s a 41% raise.

Put another way, if a normal workweek is 40 hours, Fitzgerald has just agreed to work 32 hours a week, or 6 hours 24 minutes a day Monday through Friday, up from 24 hours a week (or 4 hours 48 minutes a weekday). So for the additional eight hours a week, he’s getting $174,000 a year — or $418.27 an hour for the additional time. Overall, his pay has gone to $361 an hour from $341 an hour.

Now, Ascent Media is a bit a of a strange company. It was spun off in 2008 from Discovery Holding Company (now aka Discovery Communications (DISCA)), and was primarily in the business of providing services to the film and television industry. But last year, the company shed big chunks of that business line for cash, and in December, bought Monitronics, which Ascent describes in its 10-K as “a leading national security alarm monitoring company.”

Clearly, Ascent is emphasizing the “holding company” theme over the whole core-competency thing. Meantime, John Malone, chairman and impressario of Liberty Media, controls about about 30% of Ascent Media’s voting power, primarily through its thinly traded B shares (ASCMB). And Malone’s companies aren’t exactly guilty of doing things the way everyone else does just because it’s conventional — especially when it comes to pay. See, for example, our posts on IAC in December and on Malone’s own company-paid tax bill in 2008.

For what it’s worth, Ascent’s proxy indicates that, in addition to Fitzgerald’s role as director, chairman and CEO of Ascent, he’s also been a senior vice-president of Liberty Media since mid-2000, and has served on the board of Expedia, a company headed by former Malone partner Barry Diller.

All of which suggests that, maybe, the rest of Ascent Media’s Monday 8-K shouldn’t be too surprising either: a pay cut for Ascent General Counsel William E. Niles.

Niles’ new contract is for five years (replacing a pact set to expire in August) and pegs his base salary at $491,000 a year — but that figure drops to $400,000 as of August 31, or sooner if he moves to the Denver area before then. (Ascent is based in nearby Englewood, Colorado.) The reduction would also affect his target bonus, which is set at 50% of salary.

Not quite making up for the impending pay cut: $75,000 in reimbursement “for reasonable and customary expenses” related to the move, a sum that includes gross-ups for his taxes.

So there you have it: A CEO getting paid a fair bit more for putting in a few hours more into his part-time job, and a general counsel getting paid less for moving closer to his employer’s headquarters, all at a media company that just dropped a chunk of change to buy an alarm-monitoring outfit.

It’s quite possible that there’s more going on here than meets the eye. One of the drawbacks of seeing the world through SEC filings is that companies can fall woefully short when it comes to explaining just why they’re doing what they do.

At least we have all day to piece this stuff together. Pity the poor retail investor trying to make sense of it on the side.

Image source: Rev Dan Catt via flickr

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