AMC Networks first-quarter 2019 earnings will come later this week, but we now know what President and CEO Josh Sapan earned last year.
The overseer of AMC, Sundance TV, IFC, BBC America, WE TV and all the rest made $20.5 million in 2018, down 31% from the prior year’s $29.6 million haul. Sapan’s salary remained the same as previous years’ at $2 million, so what gives?
The large decline in the top executive’s executive compensation falls under the Non-Equity Incentive Plan Compensation category, where Sapan’s annual haul decreased from $13.2 million to $4.6 million. There’s the majority of your year-to-year difference, as Sapan’s stock awards dipped from $14.3 million to $13.9 million.
Per AMC, the decline in the pay of executives like Sapan is a result of the company moving away from processes that caused a “bunching” effect in executive pay.
“In 2016, the company changed its long-term incentive compensation from a long term cash performance award (‘CPA’), which the company awarded prior to 2016, to a long-term equity-based award in the form of [Performance Stock Units],” AMC accountants wrote in Monday’s DEFA14A SEC filing. “SEC reporting rules require that the company report CPAs when paid at the end of their three-year performance cycle. At the same time, SEC rules require that PSU awards, which also vest after a three-year performance cycle, be reported in the year granted. This results in a ‘bunching’ effect for the calendar years ended December 31, 2016 and December 31, 2017 because 2016 includes both the value of the CPAs that were granted in 2014 and the value of the PSUs granted in 2016, and 2017 includes both the value of the CPAs that were granted in 2015 and the value of the PSUs granted in 2017.”
“Because no CPAs were outstanding after December 31, 2017, there is no ‘bunching’ effect for the NEOs’ 2018 compensation,” it continued.
Got all that?