Time Warner Cable

Meeting date:  July 1

Robert Marcus, who became Chair and CEO of Time Warner Cable on January 1, 2014, received compensation of $34.6 million for the year.

In his prior position at the company as Chief Operating Officer, Marcus helped forge the now-cancelled merger deal with Comcast. The lucrative compensation awarded to executives in anticipation of that merger inspired considerable concern from shareholders, and only 62.2% voted in support of the advisory vote on pay last year.

Days before the announcement of the Comcast deal, TWC Compensation Committee members approved $316.4 million in compensation.  Much of this was awarded as time-based grants to senior executives, offered with the unusual rationale that the grants would compensate executives for canceled awards in 2015 and 2016. Some were also eligible for a “supplemental bonus” that could be paid out “upon the completion of the merger or any termination of the merger agreement.” While the awards were granted broadly, the money went primarily to the top executives. One article estimated that the average supplemental bonus for front line employees would be less than $70 per person.

In a fine bit of spin and understatement, the company’s current proxy suggests that last year’s low level of shareholder support (more than a third lower than average support), “indicates stockholders’ general support of the Company’s approach to executive compensation, but a lower level of enthusiasm for the special retention equity awards made in connection with the Comcast merger.”

Rather than acknowledge shareholder frustration and make important changes, the compensation committee noted that such grants were “not a component . . . of regular annual compensation.” And then they engaged in essentially the same action they had the prior year, under a new merger. One month after the Comcast deal was terminated in April 2015, TWC announced plans for another merger, a $55 billion deal with Charter Communications. In 2015, the company has again issued front-loaded grants. The Form 4 filed with the SEC refer to the grants as “an accelerated award in lieu of awards anticipated in 2017.”

It is highly unusual and problematic to front-load such payments. Marcus is paid more than his peers, and works in an industry where peers are over-paid in general. Press reports have focused primarily on the astonishing $102 million Marcus could receive if this merger goes through, but even if it doesn’t, he stands to become cable’s most satisfied customer.