Fresh from overseeing the ouster of Jim Waley as the reader of the Nine Network’s sensitive 6pm News broadcast in Sydney, PBL CEO, John Alexander has signed a new five year deal with the company that will be worth more than $25 million.
In doing so he continues the tradition of CEO’s at PBL who make themselves very wealthy by taking on the toughest job in Australian media, being nursemaid, confidante and chief gofer for Kerry Packer and his family.
Nick Falloon made millions from his long service at Nine and then PBL when he was ousted by James Packer back in early 2001. But that was because he had been a senior executive at Nine and PBL for more than a decade.
His replacement Peter Yates made $10 million or so last year when he was pushed in June, and stands to make more from having share and house loans that don’t fall due until next year.
Now John Alexander, who was paid more than $3.6 million last financial year in basic salary and bonus, stands to make a basic $3 million a year, plus superannuation and car. Check out the full Friday afternoon announcement here.
He will also be entitled to a basic $1 million bonus each year when the company exceeds “the annual business plan and budget objectives” of PBL. This could rise to a maximum of $2 million and the extra would be awarded at “the discretion of the PBL board,” depending on how well and how much the company exceeded the business plan and budget targets.
In addition to this, Alexander will be entitled to a deferred cash bonus that depends on the “periodic” appreciation in the PBL share price that must be at least 7% from the date of his appointment as CEO last June.
“Periodic” is not defined in the statement, so it could be 7% a year, or over the five years, if the board wanted to, in the absence of more information.
PBL’s share prices have risen sharply since then, meaning Alexander could be facing a substantial deferred cash bonus, but they will not become available until June 2007, according to the PBL statement.
The terms and hurdles are complicated. The bonus is based on one million shares, but he cannot get this deferred bonus for three years when the bonus will be based on the price rise of 300,000 shares. The fourth year it will be on 200,000 shares and then on the fifth anniversary, 500,000 shares, making a million in all.
This bonus cannot be withdrawn; once it vests, it is Alexander’s.
Putting a value on it will be difficult, which is possibly the reason for the structure. The actual amount will not be known until “Mr Alexander elects to crystallise his deferred bonus which maybe no later than the 5th anniversary” from the date of his appointment.
So that bonus could be worth anything by the end of five years.
With the PBL share price around $16.55 in afternoon trading today (down around $1 on its recent high) a seven per cent gain each year would give Alexander another million dollars a year.
But over the five years of his contract he will get up to $25 million as a minimum.
By the time he has turned 59, Alexander could be worth well over $30 million, including the $10 million or so in salary and bonus already received since he joined PBL back in 1999 at the ACP magazines group.