CEO Alfred Liggins took some flack from shareholders for his new compensation package at Radio One’s annual shareholders meeting, but there were also shareholders who stood up to say that he and founder/Chair Cathy Hughes deserved more pay. As for the company’s lagging stock price, Liggins detailed plans to build the company’s future on a diversified platform, with TV One on the verge of profitability and high hopes for Interactive One.
When one shareholder stood up to complain about Liggins receiving a bonus, even though Radio One’s stock price had plunged, the CEO deferred to two members of the compensation committee of the board of directors to defend the pay package.
If Radio One were to have to replace Liggins, Geoffrey Armstrong said the company would have to pay a lot more in the current marketplace for a new CEO. He noted that the bonus was determined not by whether the company’s stock went up or down, but how it performed against its peers. He said a multi-tiered process is in place for determining future bonuses. Brian McNeill also expressed confidence in Ligging as having the vision to lead Radio One.
While a couple of shareholders complained at the annual shareholders meeting about the new compensation packages for Liggins and his mother, Radio One founder/Chair Cathy Hughes, a couple of shareholders also stood up to say they deserved the pay raises. One said the two had been underpaid for too long.
One shareholder said he had come to the meeting ready to demand new management. But after hearing Liggins describe his vision for the future, with growth plans for TV One and Interactive One, that shareholder said he now understood where the CEO was trying to take the company. “Give the brother a chance,” he declared.
While leaving it to the board members to discuss his own pay package, Liggins noted that Radio One has paid bonuses to GMs whose ad revenues are down, because their stations have outperformed their local markets. Without them, he said, the downturn would be worse. As for complaints about the falling stock price, from a one-time split-adjusted high of $33 to a recent low below $1, Liggins noted that he and Hughes have lost hundreds of millions of dollars in value, far more than anyone else. “We feel your pain,” he declared.
For her part, Hughes blasted the Washington Post for its reporting about the executive compensation packages, calling it part of a “vendetta” against Radio One for protests she led years ago against the newspaper. “We have survived worse,” she said.
Liggins is not promising any quick turnaround for the company’s radio business. Rather he sees radio industry revenues being down again in 2008. “I do not see any relief in sight,” he said, noting the pressures on all traditional media. So he is looking to diversification as the key to Radio One’s future. For more on that, see the related story “TV One about to turn the profitability corner.”