Outwit, outplay, outlast…

Looks as though James Cicconi, the AT&T (T) senior vice-president, took a cue from CBS’s Survivor during the recent SBC Communications – AT&T merger. Cicconi, the only remaining member of executive management from the old AT&T “tribe”, recently signed this lucrative Retention Agreement with the recently refurbished AT&T Corp.

In the agreement, Cicconi receives an immediate “special signing bonus” of $768,000 in cash, as well as 154,901 phantom stock units (PSUs). For those unfamiliar with this form of compensation, a phantom stock unit represents the Company’s promise to pay the named executive the cash equivalent of the fair market value of one share of the Company’s common stock upon the vesting date of the phantom stock unit. PSUs often carry the right to accrue dividends just like regular common stock, which is the case in Cicconi’s agreement.

One-third of Cicconi’s PSUs vest on November 18, 2006 and the other two-thirds vest on November 18, 2008. Assuming the stock price stays around $25 a share and the Company continues to pay an annual dividend of $1.33 / share, some back-of-the-envelope math gives Cicconi a payout of about $1.3 million in November 2006 and a whopping $2.7 million in November 2008.

Compare that to the relatively paltry $1 million payout Survivor winners receive — and they don’t get any corporate perks.