Radio One CEO Alfred Liggins is getting a check for 4.8 million bucks, plus a signing bonus and a raise. The compensation committee of the board of directors coughed up the extra cash after determining that he had been underpaid for the past three years.
Liggins was paid $1,106,902 in 2007. That included a base salary of $575,370, a bonus of $468,720 and $62,815 in other compensation. Under the new employment agreement he signed last week, his base salary jumps to $980,000 and his bonus – 50% based on specific goals and 50% determined by the board’s compensation committee – can be up to 100% of the base salary. Liggins also received a $1,000,000 “signing bonus” with his new three-year contract, plus he got 300,000 restricted shares of stock and options to purchase 1,150,000 shares. As founder of TV One, the cable channel partly owned by Radio One, Liggins is also to receive 8% of any distribution that Radio One receives from TV One.
But having determined that Liggins was underpaid for the past three years, the compensation committee granted him a “make whole bonus” of $4,800,000. “The make-whole is intended to compensate Mr. Liggins for losses associated with his past employment contract,” the company said in an SEC filing.
During the past three years Radio One’s stock price (Class D, the most widely traded issue) went from $16.12 to $6.74. More recently, the company agreed to sell its Los Angeles radio station at a huge loss.
RBR/TVBR sought comment from Alfred Liggins, but he did not respond to our email or phone call.
RBR/TVBR observation: Gee, if he didn’t like the pay, why didn’t he go somewhere else? Oh, yeah, that’s right – he and his mother own voting control of Radio One. In a normal employer-employee relationship, you sign a contract and you get paid as spelled out. If you think you deserve more, you negotiate a raise when the contract comes up for renewal. But it seems normal workplace relationships don’t apply when the CEO is involved. Sure, why not a retroactive pay raise? Is it any wonder that CEO greed has become such a hot topic with investors?