End of year
In connection with last Friday's flurry of merger activity, I asked why end-of-year 2006 was so important.
It has been suggested to me that the SEC is going to require much more detailed disclosures about executive compensation beginning in 2007. (Description here.) Companies will have to be very plain about what they're paying their top employees and why.
The forms filed by AT&T and BellSouth back in June 2006 in contemplation of the merger suggest that there were rich rewards to executives triggered by the merger.
In considering the recommendation of BellSouth’s board of directors with respect to the approval of the merger agreement, BellSouth’s shareholders should be aware that BellSouth’s executive officers and directors have interests in the merger that are different from, or in addition to, those of the BellSouth shareholders generally.
The merger (see p. 58) triggers the vesting of stock options, the earning of “performance shares” (for Duane Ackerman, the estimated value of these performance shares was $27 million), and severance payments for those executives who are terminated — with the cash severance pay based on the merger closing by the end of 2006. For Ackerman, severance pay will be $9.2 million.
I'm sure none of this is unusual. But the new disclosure obligations plus the planned payments may have had something to do with the push.