Starz LLC (STRZA)  Chief Executive Officer Christopher P. Albrecht could receive $75.6 million if the pay-TV channel undergoes a change in control.

The payment would include $71.8 million of option awards that would immediately vest and a $3.75 million cash severance, according to an April regulatory filing and data compiled by Bloomberg as of yesterday’s close. If an investor acquires 20 percent or more of the Englewood, Colorado-based company’s voting power, it would trigger the payout, the filing shows.

Theano Apostolou, a Starz spokeswoman, referred questions to Courtnee Ulrich, an investor relations representative who works for Liberty Media Corp. (LMCA) Ulrich didn’t respond to phone calls and e-mails seeking comment. Eric Becker, another Starz spokesman, also didn’t respond to calls for comment.

Starz is considering alternatives to a sale after reaching out to potential bidders who passed on making an offer, according to people familiar with the matter, who asked not to be identified because they weren’t authorized to speak publicly. The network is controlled by billionaire John Malone, who wants to maintain control of the company, another person said.

The company is now considering investments and partnerships with U.S.-based or European-based media companies in lieu of selling itself, although nothing will be determined this year, one of the people said.

Lions Gate

Albrecht was paid $30.5 million last year, according to the company’s proxy statement. That included a salary of $1.25 million, a $1.33 million bonus and 3,363,123 million stock options that were worth $27.9 million when they were granted.

In a change of control, “the compensation committee of our board of directors may determine not to accelerate the existing equity awards if equivalent awards will be substituted for the existing awards,” Starz said in its April filing.

By comparison, Jeffrey Katzenberg, the CEO of DreamWorks Animation SKG, wouldn’t receive anything if control of the movie studio that made “Shrek” and “Kung Fu Panda” changed hands. If he were fired in a transition, he’d receive a package that includes a $32.4 million cash severance, accelerated vesting of equity awards, and continued medical benefits and perks, according to the company’s April proxy statement.

Jon Feltheimer, the CEO of Lions Gate Entertainment Corp., would also need to be terminated for his change-in-control agreement to pay out, according to the company’s July proxy statement.

In the event of a “change in control, the actual amounts may be different due to various factors,” Starz said in the filing. “In addition, we may enter into new arrangements or modify these arrangements from time to time.”

Starz, which owns the Starz and Encore premium channels, has about 56 million subscribers. Encore customers have declined for five consecutive quarters, to 33.7 million as of Sept. 30 from 35.1 million.

 

Source: Bloomberg – Starz CEO Poised to Get $76 Million in Change of Control

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