PARIS — Top managers at satellite-broadband provider Hughes Communications won approval to add change-of-control provisions in their employment contracts that added a combined $26.9 million to their pay packages just hours before their company’s purchase by EchoStar.
In a Feb. 15 filing with the U.S. Securities and Exchange Commission (SEC), Germantown, Md.-based Hughes says the payouts, agreed to on Feb. 13, will occur in two steps. One will be made as soon as the EchoStar purchase, also agreed to Feb. 13, is approved by U.S. regulators, which is expected in the coming months.
Once that occurs, five managers at Hughes will receive a total of $13.45 million, with $5.35 million going to Hughes Chief Executive Pradman P. Kaul, $2.4 million to Executive Vice President T. Paul Gaske and $1.9 million each to Chief Financial Officer Grant A. Barber and executive vice presidents Adrian Morris and Bahram Pourmand, according to the SEC filing.
A second, identical payment will occur six months later, the company said, adding that the compensation is to repay these executives for their efforts in finding a buyer for Hughes.
Executive employment contracts that trigger cash or stock payouts in the event of a change of control are not uncommon, although most are not tied so closely in time to a specific acquisition.