It’s all right out there with nary a blush for all to see in the Citadel 2010 Equity Incentive Plan which rewards company managers.
Suleman gets 1,901,042 restricted shares, half of which vest on June 3, 2011 and the other half on June 3, 2012. If you’ve got your calculator out – and he does – multiply $22.875 per share which was the price of Citadel stock when the grant plan was filed recently.
Suleman’s radio “wife” Judy Ellis gets $2.288 million on the same two-year vesting plan and CFO Randy Taylor and VP/General Counsel Jacquelyn Orr (both get 80,000 shares) and Sr. Finance VP Patricia Stratford gets 56,250 shares.
Fagreed also saw to it that his new board was well taken care of with Jonathan Mandel, Paul Saleh, Gregory Mrva and Doreen Wright receiving about $1 million each on the same basis.
One thing is true about Farid Suleman.
He takes care of his own self.
Maybe two things.
He is shameless.
Citadel has been laying people off for years along with other consolidators. They have all been crying about the economy. Then, this pretender to the throne gets the people who put him into his job basically kicked out (Teddy Forstmann). And he files for bankruptcy in a pre-arranged filing that was rubber stamped by a court.
That wipes out the debt from a company he clearly could not run and puts it in the hands of the creditors who apparently don't care – and get this – are so happy to have him running their company they give him a sweet deal to continue with great salary, benefits and complete with golden parachutes at the ready.
A few years ago I nicknamed Suleman "Fagreed" because he has proven again and again that he is taking care of good old number one first. This one-time second banana to Mel Karmazin may not be able to run a radio group, but he sure can earn a salary for doing it.
Over the years I’ve criticized the likes of Suleman, Lew Dickey (Cumulus), Clear Channel (Mays, Hogan et al.) and the other fat cats for not really caring about radio.
There is an underlying group of pretenders such as Radio One And Done who can’t run a company either but these folks aren’t as shrewd as the big dogs apparently. Radio One is frantically looking to refinance the debt it couldn’t afford and other consolidators who have not already gone bankrupt have no choice but to throw themselves on the mercy of, well -- the bankers without whose permission this could not have happened.
This is not going down well with the rank and file.
One said, “the inmates are running the asylum”.
I’m hearing Suleman is moving the company headquarters to Miami to save taxes. Never underestimate the power of a bean counter.
In today’s radio, these stories never seem to stop.
Dickey has more schemes than Carter has liver pills to turn his media empire into a personal monopoly game. His mean spirited management does not sit well with many of his own employees. Cumulus has a class action lawsuit against it and requires questionable non-competes from employees who have no choice but to sign in a bad economy not to mention a few personnel issues.
What is odious is what happened to a great business that was fortunate to have fine people working in it.
The mentality that thinks of only the guy at the top and not the employees who make the company work is sheer greed – like in Fagreed (but not limited to him).
In today’s radio industry, repeater radio, voice tracking and demoralized sales staffs are top priorities.
The radio industry as run by investment banks has less to do with how profitable they are than the value of their real estate. It’s like a Monopoly game where Park Place might allow you to build five radio stations on it because one day some sucker is going to come along and land on it with money to make the owner yet another profit.
But there is a big difference between the board game and today’s “game” of radio.
In radio, the assets have to be worth something – presumably more than the buyers paid. When they let key people get away and pawn off unremarkable national programming instead of live and local radio, their franchise value goes down (or as we say in Monopoly, the price you pay for their hotels and houses are worth less like, say, Baltic).
No mobile or Internet strategy.
Isn’t that amazing?
It’s as if this investment bank game of radio operates in a void skipping the Internet, social networking and generational media.
Some Citadel managers have been forced to fire others, cut their salaries, take away health benefits, uproot families, heap stress on marriages in an impossible attempt to help their bosses avoid bankruptcy.
You see, we had it all wrong in the first place.
Citadel was not bankrupt.
Its leader was morally bankrupt.
The handful of greedies that have hijacked the radio industry should be viewed with shame, not as conquering heroes.
Thank goodness there are small and medium market radio owners who still care about the industry and their people. But when major owners act out of greed in a time of economic uncertainty, it’s a long road back thanks to the black eye they have heaped on terrestrial radio.
In the meantime, we'll have to wait another month for Michael Douglas to reprise his role as Gordon Gekko in Wall Street 2 to help us understand the close relationship between fantasy and reality.
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