Jones Intercable Inc.'s top executives, whose careers
at the company will probably end when Comcast Corp. takes control early next year, will at
least be well-compensated as they head out the door.
According to the company's proxy statement, which
outlined actions to be voted on at the MSO's annual shareholders' meeting next
month, the top three executives under chairman and CEO Glenn Jones will get payments of
between $2.5 million and $4 million.
Other officers and employees are also in line for payments,
but they were not spelled out in the proxy.
Glenn Jones -- who agreed in August to sell his controlling
shares of the company to Comcast for $200 million -- will also be paid under a negotiated
termination of the eight-year employment contract that he signed in December 1994.
Under that contract, he was paid $2.5 million during the
first year, with cost-of-living increases after that. He made about $3 million in salary
and other compensation last year. If the Comcast deal closes Feb. 28, Jones would be paid
$8.3 million, according to the proxy.
Jones agreed to sell his controlling share to Comcast after
Comcast cut a side deal to buy Jones Intercable stock from BCI Telecom Holdings Inc.
(BTH). BTH had an option to buy those controlling shares sometime after December 2001.
Comcast has agreed to pay a total of about $700 million for
37 percent equity and 47 percent voting control of Jones Intercable.
Jones Intercable president James O'Brien -- a 16-year
employee at the company, who earned about $472,000 in salary, bonuses and other
compensation last year -- would be paid an amount that won't exceed $4 million on or
before the end of the year.
Kevin Coyle, group vice president, finance, would get up to
$3.25 million. And Ruth Warren, group vice president, operations, would get up to $2.5
million.
The payments are "in recognition of the contributions
... over a number of years of past service, and in connection with services rendered and
to be rendered during the transition period" to Comcast's acquisition of
control.
Glenn Jones was the only employee with a contract,
according to the proxy.
In sections discussing executive compensation, the proxy
took note of restructuring efforts at the company over the last several years. Jones built
and bought cable systems through limited partnerships, which were later bought out by the
company.
In the latest such transaction, limited partners have been
asked to approve Jones' $138.2 million buyout of the Palmdale, Calif., system, with
28,000 subscribers.
As of March, Jones owned about 74 percent of its subscriber
base (including pending deals), compared with 23 percent in June 1995.
Jones also had strong operating results, enjoying internal
subscriber growth of 3.1 percent, compared with the industry average of 2 percent, and
cash-flow growth of 12 percent, versus the average of 8 percent.
The company's dealings with assorted Jones affiliate
companies were also detailed in the proxy. In 1997, for example, Jones Intercable paid
Jones Financial Group Ltd., owned by Glenn Jones, about $3.5 million to advise on system
acquisitions and sales.
The proxy also recorded the losses that Jones Intercable
and Jones Cyber Solutions Ltd., a Jones International Inc. unit, incurred in an abortive
effort to develop a comprehensive billing system in-house. Jones Intercable recorded a
$14.2 million write-off in the fourth quarter of 1997 for the development work, which was
scrapped in late 1997.
On Aug. 31, Jones Intercable sold its share of the
billing-development venture to Jones Cyber Solutions for $3.1 million.
