Look Who Hit Pay Dirt in the Nextel Deal (Carlyle Group founder)

[UpInArms]

http://www.nytimes.com/2004/12/19/business/yourmoney/19agenda.html?oref=login

(free registration or try www.bugmenot.com)

THROUGH the 1990's, a corporate director's pay was widely seen as money for nothing. Investors imagined the chief executive's buddies praising his golf game over cocktails and signing off on all of his ideas - and his pay package. That pretty much summed up the reality, too.

But in the last few years, what with all the burdens of complying with new governance rules and the prospect of being sued, independent directors have been complaining that they are underpaid. William E. Conway Jr., the chairman of Nextel Communications, is unlikely to make that claim.

Mr. Conway, a founder of the Carlyle Group, a powerful private investment firm, has been Nextel's chairman since early 2001. In the last two years, Nextel has paid him no cash for that service. Instead, he has received options, lots of them: 250,000 a year.

In essence, Mr. Conway bet on the performance of Nextel's stock and, with the announcement last week of Nextel's merger with the Sprint Corporation, he has come up a big winner. The options he has received in the last four years would be worth more than $8.5 million at Nextel's closing stock price on Friday.

That would translate to annual pay of more than $2 million, which would make him one of the highest-paid independent directors in the nation. According to Nextel's latest proxy statement, Mr. Conway had a claim on 1.23 million shares of Nextel, a stake worth more than $35 million and bigger than that of Morgan E. O'Brien, a founder and the vice chairman of Nextel.

...more...

[asjr]

1. Pretty soon we will be known as the United States of Carlyle.

[htuttle]

2. Nextel had quite a scam going in the late 90's

They gobbled up a HUGE swath of the industrial two-way radio band at firesale prices during one of the FCC's extremely ill-advised 'auctions' of the public radio bands.

Numerous small service businesses lost their radio frequencies when Nextel bought them. Then they'd come around with these combo-cellphone-walkie-talkie devices that charged you by the radio transaction (the more you talk, the more you pay). Since you'd lost your frequency, you had few choices.

Even more unfortunately, their use of formerly industrial radio bands for cell traffic started to interfere with public safety radio frequencies, since they had a habit of trying to locate transmission towers just about anywhere -- even right next to a police or fire station. I think they finally made a deal to trade the former industrial band back, to be used for public safety dispatching (DHS, probably?), and got themselves another big swath of the wireless frequencies. In the end, it was small businesses that lost, as always.

Nice 'stewardship' of the public airways our government does. It's been getting worse and worse at it since Reagan.

[The Judged]

3. Just the 90's? Did they just receive a favorable federal court decision?