Senior level executives with Savvis could pocket millions of dollars in compensation and benefits if they resign or are let go by CenturyLink within one year of the merger, according to a regulatory filing.
Savvis Chairman and CEO James Ousley would receive compensation and benefits worth an estimated $28.86 million if Savvis terminates him “without cause" or he “voluntarily resigns for good reason," according a proxy statement filed on June 10 with the Securities and Exchange Commission.
Fresh off its acquisition of Qwest Communications, CenturyLink announced plans in April to acquire Savvis in a cash and stock merger valued at $2.5 billion. CenturyLink also will assume about $700 million in net debt.
CenturyLink has proposed entering into employment agreements with certain Savvis executives. Although no agreements have been entered into, CenturyLink anticipates finalizing the arrangements before the merger closes, according to the proxy statement.
The regulatory filing set forth a table of compensation and benefits that the executives would receive “in the event a named executive officer’s employment is terminated by Savvis without cause or the named executive officer voluntarily resigns for good reason, in each case within 12 months following a change in control of Savvis …."
Besides Ousley, other executives covered under the “Golden Parachute Compensation" clause include: Gregory Freiberg, senior vice president and chief financial officer (estimated comp/benefits: $7.21 million); William Fathers, president ($9.33 million); Jeffrey Von Deylen, senior vice president, global operations and client services ($3.85 million); and James Mori, senior vice president, America sales ($4.47 million).
The proxy statement emphasized that the compensation and benefits “are estimates based on multiple assumptions that may or may not actually occur …."
CenturyLink anticipates closing the acquisition of Savvis in the second half of 2011 following regulatory approvals and other closing conditions.
Earlier this month, CenturyLink announced an agreement to sell $2 billion in debt securities, the proceeds of which would be used in connection with the Savvis acquisition.
Savvis, a provider of cloud infrastructure and hosted IT solutions for enterprises, serves about 2,500 customers, including 32 of the top 100 companies in the Fortune 500, according to its website.