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AT&T CEO takes compensation hit

by Lou Whiteman  |  Published February 22, 2012 at 11:32 AM ET
AT&T Inc. CEO Randall Stephenson took more than an ego hit when his company was unable to complete its $39 billion purchase of T-Mobile USA Inc. The failed deal also cost him more than $2 million.

Stephenson lost out on $2.08 million in bonuses when the the deal was pulled over regulatory concerns. The Dallas-based company in its preliminary proxy statement filed with the Securities and Exchange Commission said that although merger-related costs are typically excluded when assessing financial results for the purpose of awarding bonuses, its board audit committee "determined to include the T-Mobile transaction costs in determining payouts for all outstanding executive officer performance share awards."

In March 2011 AT&T unveiled plans to buy T-Mobile from Deutsche Telekom AG for $25 billion in cash and an 8% stake in itself. The deal, which would have combined the nation's second and fourth largest cellular providers, came under heavy criticism from day one. The company pulled the deal in December in the face of heavy regulatory scrutiny including a Justice Department lawsuit filed to halt the merger.

AT&T, the one-time Southwestern Bell Corp. that transformed itself into a national provider through a series of acquisitions including Pacific Telesis Group, Southern New England Telecommunications Corp. and BellSouth Inc., paid a heavy price for the failure of the T-Mobile transaction. Deutsche Telekom, recognizing the potential antitrust hurdles, was able to extract a massive breakup package that included $3 billion in cash and wireless spectrum and roaming agreements worth between $5 billion and $6 billion.

Including bonuses and other compensation Stephenson's overall compensation in 2011 dropped $5.3 million to $22 million. In 2009 the executive made $29.2 million in total compensation.