By
ERIC DASHAT&T had a good
year in 2006. Edward E. Whitacre Jr., the longtime telecommunications
executive who shepherded the company through the 2005 merger with
SBC Communications, had an outstanding one.
Mr. Whitacre took home about $31.5 million in pay
last year, according to yesterday’s proxy filing, about 94 percent more
than the $16.2 million that he earned in 2005. AT&T shareholders, on the
other hand, saw a total return of about 53 percent, including reinvested
dividends.
But even the $31.5 million may be understated. For
example, Mr. Whitacre took an additional distribution of about $4.4
million dollars from his deferred compensation plan in 2006.
Those compensation figures reflect the amount that
Mr. Whitacre actually pocketed, not the $60.7 million the company reported
to the Securities and Exchange Commission under new disclosure rules. That
amount reflects the accounting charge taken by the company in 2006, which
includes future incentive payouts.
And more money is coming his way upon retirement.
Mr. Whitacre, 65, has a pension valued at $84.7 million and has another
$73.8 million of previously earned pay socked away in a deferred
compensation plan.
Did AT&T’s board ever consider the total amount of
wealth that Mr. Whitacre accumulated in his 43-year career when setting
his pay?
Not really, the company suggested. “The
consideration is the creation of wealth for shareowners and positioning of
the company for long-term growth,” said Larry Solomon, an AT&T spokesman.
AT&T’s compensation committee was headed by James
A. Henderson, the former chairman of Cummins Engine Company, the engine
and power system company. It also included Gilbert F. Amelio, a venture
capitalist; James H. Blanchard,
Synovus Financial’s former chief executive; Martin K. Eby Jr., the
head of a big commercial general contractor; and Patricia P. Upton, chief
executive of a fragrance company. CCA Strategies, an employee benefits
group recently acquired by JPMorgan Chase, was the compensation
consultant.
Some shareholders asked the board for an
up-or-down vote on executive compensation, even if the results were
nonbinding, after harshly criticizing Mr. Whitacre’s pay last year. Mr.
Whitacre received $85.2 million in compensation over the five fiscal years
through 2005, while investors received a total return of a negative 40.3
percent. They also claim his retirement benefits are excessive.
AT&T’s board has rejected the proposal, saying the
company already had a “thoughtful, performance-based compensation program
in place.”
