Global Crossing’s Annunziata Gets $160 Million for 13 Months on Job
When Global Crossing Chief Executive Robert Annunziata abruptly left the telecommunications firm a few weeks ago, sources said he was departing with a “generous” severance package.
They weren’t kidding.
Annunziata received more than $160 million in total compensation for 1999, including his salary, bonuses, severance and gains on millions of options for company stock, according to a financial filing made public Friday.
In all Annunziata, 52, worked for Global Crossing only 13 months before resigning from the management team unexpectedly in early March.
Upon joining Global Crossing in early 1999, Annunziata was granted a $10-million signing bonus, plus options for 4.5 million shares of Global Crossing stock. His salary for 1999 totaled $464,679, and he received a $1-million annual bonus.
He later received options for 3 million more shares. And, as part of his severance package, Annunziata was granted payments of about $3 million, plus the automatic vesting of all outstanding stock options.
Global Crossing owns a worldwide voice and data communications network. The company named Leo Hindery Jr., chief executive of its GlobalCenter Inc. Web-site unit, as Annunziata’s replacement.
Annunziata’s massive compensation stems primarily from the 7.5 million options for Global Crossing shares, which were awarded to him for helping the Bermuda-based company grow from just $420 million in revenue to $1.7 billion in sales a year later.
Annunziata also presided over completion of the company’s purchases of U.S. long-distance carrier Frontier Corp. and the acquisitions of the Britain’s Racal Telecom and Global Marine Systems.
During the year, Annunziata exercised options for 81,576 shares and realized a gain of $2.24 million. His remaining options--all of which are now vested--were valued at more than $148 million as of Dec. 31.
Taken together, Annunziata’s 7.5 million shares would be worth more than $394 million, based on Friday’s closing price of $52.63 per share for Global Crossing shares. After accounting for prices Annunziata paid for the shares, the executive’s net gain on the stock would be about $168 million.
“Those are big numbers,” said Rick Beal, practice leader for strategic rewards at compensation expert Watson Wyatt Worldwide.
In its filing, Global Crossing also said it will pay Hindery, its new CEO, an annual salary of $995,000.
In addition, Hindery was promised a big stake in the company’s GlobalCenter unit when it issues shares to the public, and he was awarded options for 500,000 shares of Global Crossing stock at an exercise price of $45 per share. He was later granted 2 million options with an exercise price of $54.37 per share.
