When Mickey Luckoff resigned at KGO-AM/KSFO GM and President, he slammed Farid Suleman, the CEO and chairman of station owner Citadel Broadcasting. Luckoff told Ben Fong-Torres:
- Everything that the CBS people warned us about came true: total control, can’t spend a dime, and you’d have to go through layers … And then you found out that the layers were one person. He’s something else. He has no regard for people whatsoever. He’s apparently pretty damned skilled financially. To be able to overpay for the ABC Radio group, take the company into bankruptcy, come out of it, pay every one of his hand picked (board) directors $1 million each and get himself a $43 million package (in grants of stock) is unbelievable.
Luckoff isn’t alone in thinking executive compensation at Citadel was out of line. The New York Times blog DealBook reports:
- In a highly unusual move, the board and management of Citadel Broadcasting have agreed to rescind $110 million in stock compensation after R2 Investments, a hedge fund based in Dallas, attacked the radio company for its executive compensation practices, according to a court filing late Tuesday in Federal Bankruptcy Court in Manhattan.
- R2 Investments accused Citadel’s management and directors of “a shocking display of corporate greed and dishonesty” for rewarding themselves with stock grants worth $110 million — more than $55 million to its chief executive.
- The Citadel board also awarded more than $1.35 million of stock to each of its members — “a disturbing game of quid pro quo,” the filing by R2 contended.
- A spokesman for R2 declined to comment.
- R2 asked the judge to revoke the stock award “to prevent one of the most egregious frauds by a company emerging from bankruptcy under Chapter 11.”
In Tuesday’s filing, Citadel’s lawyers said the company’s board would issue stock options instead of common shares.