On the company’s dime…

March 23, 2004

Though this article in USA Today back in December makes AT&T (T) Chairman and CEO David Dorman sound like an antidote to the imperial CEO — it even starts out by joking around that Dorman paid $14.95 for his own umbrella stand, a reference to former Tyco head Dennis Kozlowski’s over-the-top spending habits — AT&T’s recent 10-K tells a slightly different story. The company, whose investors haven’t done so well over the past few years, has been paying $12,000 a month for Dorman’s apartment that overlooks Central Park, and which the article notes, has a “spectacular view” and is decorated with “English traditional pieces and French accents”. When Dorman was first hired in December 2000, the company agreed to pay Dorman a “special temporary allowance” of $6,000 a month through December 2002 to cover the cost of housing in the New York metro area. That amount was later extended through December 2003 and in the recent K, bumped up to the $12K beginning last September and extended again through June of this year. In addition, if Dorman is unable to sell his home in the Atlanta area by the end of June, AT&T will pay $2.975 million for the home. If Dorman is able to sell the home by June, AT&T will pay him 1% of the purchase price as an incentive. Also in the K: a brief item that AT&T consumer head John Polumbo is able to use the corporate plane for up to five one-way trips a month between New Jersey, where AT&T is based, and his home in California. In addition, both men will receive “gross up” payments to cover the taxes associated with AT&T’s largess.

UPDATE : Just to put this in persective, Dornan’s total compensation, according to the proxy filed by AT&T on 3/26, was approximately 44% higher than last year, or about $11.67 million. And he still needs AT&T’s shareholders to cover his rent?

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