Top Clearwire (NASDAQ:CLWR) executives appear set to rake in millions of dollars from stock payments if Sprint Nextel's (NYSE:S) bid to buy the roughly 50 percent of Clearwire it does not already own gets approved by Clearwire's minority shareholders.
Sprint has offered to buy the remaining shares of Clearwire it doesn't own at $2.97 per share, and, according to the Puget Sound Business Journal, that means Clearwire executives will be able to cash out shares issued March 1 at that share price. Clearwire's shares are currently trading at $3.16.
According to the article, that would mean Clearwire CEO Erik Prusch would get a cash payout of nearly $7 million, CTO John Saw would receive a payout of just over $2 million and CFO Hope Cochran would get nearly $1.8 million. Other executives would get more than $1 million each, and each member of Clearwire's board would get $160,000, the report noted.
"Clearwire's executive and employee compensation plans are consistent with common industry practices for recognizing and rewarding an employee's contributions towards successfully achieving our business goals," the company said in a statement to the Puget Sound Business Journal. "We believe these plans are an important part of retaining key individuals and managing our business as we seek to successfully close our pending agreement with Sprint."
Executives who are at a company that gets bought by a larger competitor often receive cash payments, payments from stocks or bonuses. What makes the Clearwire situation interesting is that it is not yet clear that Sprint's bid will win shareholder approval. Minority shareholders have pressed Clearwire's board to push for a higher price. There is also the matter of Dish Network's (NASDAQ: DISH) $3.30-per-share counterbid to Clearwire.
Clearwire said last week it would take an $80 million payment from Sprint. The action complicates Dish's counterbid to Clearwire, since Dish said it would withdraw its offer if Clearwire took the money. Dish has not commented on its offer or the transaction.
- see this Puget Sound Business Journal article
Clearwire to take $80 million payment from Sprint, complicating Dish's bid
Dish: If our Clearwire bid goes through, Sprint is our likely partner
Sprint's Hesse looks beyond Clearwire for spectrum purchases
Clearwire leaves door open to Dish's offer, but still recommends Sprint deal
Report: Dish's counterbid will force Sprint to boost Clearwire offer
Dish trumps Sprint with surprise bid for Clearwire