Time Warner's Jeff Bewkes could have a hefty payday

Time Warner (TWX) CEO Jeffrey Bewkes, who has earned more than $68 million in compensation over the past five years, stands to reap tens of millions more if he can shepherd the media and entertainment giant through its $85 billion sale to AT&T (T), according to an executive pay consultant.

The 64-year-old Bewkes, who has headed the New York-based media conglomerate since 2008, would be able to receive about $32 million in salary and bonus continuation if his employment is “terminated without cause” for reasons including a company sale, according to executive compensation consultant Brian Foley.

Unlike many Fortune 500 executives, Bewkes and other senior Time Warner managers don’t have specific “change-in-control” provisions in their employment agreements that would be triggered in the event of a sale of the company. But like other shareholders, Bewkes would benefit from a surge in the company’s stock price.

And he now has more than 4.4 million shares in exercisable options, most of which are “in the money,” meaning he can sell them at a profit. Bewkes also has more than 1 million additional options in the money but that can’t be excercised yet. Foley estimates the value of Bewkes’ options at as much as $375 million, depending on the performance of Time Warner’s stock prior to the deal’s close.

“He’s picking up extra value on all the options that he’s got,” said Foley. “The numbers are big because he’s held them for so long. Nonetheless, Bewkes could pick up more than $100 million in additional gains because of the increased Time Warner stock price resulting from the deal.”

The agreement calls for the combined company to be run by AT&T CEO Randall Stephenson. Bewkes has indicated that he’ll depart after a yet-to-be-defined transition period. A spokesman for Time Warner couldn’t immediately be reached for comment.

Under Bewkes’ leadership, Time Warner has shed many legacy businesses viewed as having limited growth potential, including AOL, which was spun off in 2009 and acquired last year by Verizon (VZ) for $4.4 billion. He also unloaded Time Warner Cable, which was acquired earlier this year by Charter Communications for $55 billion, and magazine publisher Time Inc. 

In 2014, Bewkes turned back a $76 billion offer from Rupert Murdoch’s 21st Century Fox (FOXA) because Bewkes said it undervalued Time Warner. 

According to Rich Greenfield, an analyst with BTIG, Bewkes realizes that the growth potential for media companies will continue to be limited for  the foreseeable future.

“Bewkes will end up being remembered as the smartest CEO in the sector -- knowing when to sell and not overstaying his welcome to maximize value for shareholders,” he told CBSN, the online affiliate for CBS News and a sister organization to MoneyWatch, both owned by CBS (CBS).

Getting the deal approved, however, isn’t going to be easy because politicians from across the political spectrum -- ranging from Republican presidential candidate Donald Trump to Sen. Al Franken, D-Minnesota -- have called on regulators to block it. Time Warner rival Walt Disney (DIS) has expressed concerns about the merger as have nonprofits worried about growing consolidation in the media sector.

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