Fagreed Takes a Haircut

Citadel CEO Farid "Fagreed" Suleman's income for last year was announced yesterday and it appears he's taking a big hit on compensation.

The $11 million man in 2007 -- and $17 million dollar man from 2006 made only $1,262,248 to the penny last year.

He voluntarily gave up stock options -- you know, with Teddy Forstmann holding a gun to his head. (Okay, I kid Fagreed).

Actually, he did take a pass on compensation. This is what the proxy revealed:

"Stock award compensation of $4,819,642 is comprised of $3,440,000 related to 2,000,000 shares of restricted stock with solely time-based vesting conditions and $1,379,642 related to 2,000,000 shares of restricted stock with both performance-based and time-based vesting conditions. Effective April 1, 2009, Mr. Suleman voluntarily cancelled both (i) the 2,000,000 shares of restricted stock with time-based vesting conditions and (ii) the 2,000,000 shares of restricted stock with performance-based and time-based vesting conditions. Therefore, the equity compensation of $4,819,642 reflected above under “stock award” will not be received by Mr. Suleman. Thus, excluding these equity grants, the actual compensation received by Mr. Suleman for 2008 was $1,262,248".

Wow, never before has such fine print brought so much happiness to the current and fired employees of the beleaguered Citadel Broadcasting.

And look, Fagreed was playing it straight last year -- his benefits only amounted to $9,908 of personal private jet time.

Come on! You can't be that hard hearted. I mean the man took an almost $10 million pay cut. Would you deny him a measly $10,000 in private plane time?

You're mean.

Okay, how about $2,250 for matching contributions to Citadel Broadcasting Company 401(k) Retirement Savings Plan?

I know you're probably hoping he'll retire even though he is too young to assume the tax benefits.

Or, the $90 premium for term life insurance. Don't you just love proxy statements? They have to report everything even those $90 life insurance premiums.

The era of excessive radio CEO compensation has finally come to an end with the haircut Fagreed Suleman took last year. Actually, the $1 million plus in compensation is about right for a radio CEO in my opinion based on current conditions.

But, the haircut shareholders took with stock that's worth just four cents after it was delisted from The New York Stock Exchange is an outrage.

As is the premeditated firing of Citadel/ABC employees and the alleged bullying of some by Fagreed's radio "wife" Judy Ellis. Ellis conjures up a tough image to some and others say that she's all about the money.

Ya think?

The ABC people brought into a corporate conjugal merger with Citadel are biting their nails once the protection of their Disney-negotiated sale contract expires in June. It isn't going to be pretty. That's why I used the term "conjugal merger" because the ABC side is about to get screwed in a few months.

And those recent across the board pay cuts initiated by Citadel are apparently not all they were cracked up to be. Yes, employees are giving back five percent but not all of them are getting a free week of paid vacation to compensate. Hey, it's tough out there, right?

This is a company that has had it wrong from the very beginning.

They squandered money on a CEO who has obviously proven he wasn't worth $17 million or for that matter $11 million.

The question now that his wings have been clipped is -- is Fagreed worth the $1 million he was paid in the most recent year and whatever he earns in 2009?

You've got to wonder.

Take Citadel's New York "Headquarters".

Some speculate that his fewer than ten person corporate staff occupies Manhattan offices that cost close to $1 million. If true, I can show you a nice suite in my hometown of Hoboken across the Hudson for a lot less with a better view.

You can begin to understand how wrong this bean counter has been in steering the ship. Now Citadel is forced to cutback on personnel and reduce its local radio presence. In the year ahead I wouldn't be surprised if Fagreed doesn't decimate the outstanding ABC stations he overpaid for a few years ago.

You can expect more budget cutbacks.

More staff reductions.

More economies of scale -- maybe even further pay cuts.

Less local -- more Imus-like content that radio has too much of right now.

Citadel may not even survive the year. I'm working on a piece about which consolidators are more likely to seek bankruptcy protection first and which ones have a better chance of surviving. Standby for that.

Yet the question is -- how does this underachiever keep his job when the company is dismissing so many of its qualified people?

As one financial analyst who knows the radio industry said, "Suleman was a special limited partner with the private equity firm Forstmann Little from 2002-2007, and appears to still have strong ties to that outfit...his e-mail address is allegedly a @Forstmann Little domain. Forstmann Little beneficially owns 28% of Citadel shares. The dots connect pretty easily here".

So Fagreed's CEO salary now matches his performance.

He's making the same money as most of the other failures who have lost their shareholders money -- and fired staff -- all the time blaming the recession.

But since he is no longer ransacking Citadel coffers for compensation, is Farid still Fagreed?

Given the chance once again, you betcha.

But for now, he's a Farid-in-Need.

I know we poke fun at the insanity of radio consolidation and Farid Suleman deserves his share of ridicule -- after all, his former salary made him bigger than life.

But we laugh so we don't cry.

Let's not forget that Farid Suleman is not going to lose his house. His kids are not going to have to postpone or interrupt their college educations. Any medical needs -- God forbid -- won't have to be decided on whether he's got health insurance and amazingly enough -- he still has a job.

That's more than a lot of people under his "leadership" can say now that he's thrown them to the street in the worst economy since the Great Depression.

Let's not forget the thousands of fine radio people who have become unemployed or underemployed because of this abortion called radio consolidation.

They are not numbers -- they are people -- with families and they deserve better.

That's why the downsizing of Farid's compensation brings little satisfaction to those his management has harmed.

Because there is one thing Farid could have done to make it a little easier.

Admit he failed and offer a sincere apology.

That, costs nothing.

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