The past calendar year saw big changes at Cumulus Media, as the company ballooned in size from the acquisition of both Citadel Broadcasting and Cumulus Media Partners (in which Cumulus Media previously held only a minority stake). CEO Lew Dickey pulled it off – including the introduction of new equity capital – and he’s gotten a big payoff.
The Compensation Committee of Cumulus Media met last month to establish performance criteria for top executives with regards to earning bonuses this year. So CEO Lew Dickey has targets for revenues and earnings by the company; CFO J.P. Hannan has targets for earnings and other financial and operational measures; and co-COOs Jon Pinch and John Dickey have targets for revenues, earnings and operational achievements. If they hit the targets they’ll receive the bonuses spelled out in their employment contracts – and could even receive more at the discretion of the committee, based on their performance.
In the case of Lew Dickey, the committee also accelerated vesting of 800,000 shares of restricted stock. In light of the successful completion of the two huge transactions, “among other things,” the committee decided that the “established performance criteria were no longer applicable,” so the entire block of restricted stock was vested as of February 16th. At the closing price of $3.71 on that day, the shares were worth $2,968,000.
RBR-TVBR observation: Since it’s unlikely that Lew is going anywhere else for many, many years to come, it probably doesn’t make much practical difference when the shares vest. Still, it gives the CEO a big pat on the back for making the company much larger – and with a better balance sheet to boot.