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West Corp's Leaders Eligible For $84.5M In Payouts Thanks To Apollo Global Management Deal
West Corp's top executives and directors could earn as much as a combined $84.5 million in stock, option and severance payouts if the proposed acquisition by Apollo Global Management goes through.
The Omaha, Neb.-based company, No. 24 on the 2017 CRN Solution Provider 500, detailed payouts for its ten executive officers and nine non-employee members of its board of directors in a preliminary proxy statement filed late Thursday with the U.S. Securities and Exchange Commission (SEC).
Tom Barker – West Corp's CEO and chairman of the board since March 2008 – could receive a payout of as much as $28.4 million, while Nancy Berger – West Corp's president and chief operating officer since January 2004 – could receive a payout of up to up to $15.8 million.
If Barker and Berger remain with West Corp. for more than two years after the close of the Apollo acquisition, they will receive payouts of just $9.3 million and $8.7 million, respectively.
Apollo in May announced plans to purchase publicly-traded West Corp. for an enterprise value of roughly $5.1 billion, a calculation that includes West Corp's net debt of more than $3 billion. The deal is expected to close in the second half of 2017.
Four other West Corp. executives are slated for payouts of between $6 million and $8 million. They are: Scott Etzler, president of Unified Communications Services since 2003; Jan Madsen, CFO and treasurer since 2014; David Mussman, executive vice president, general counsel and secretary since 2001; and David Treinen, executive vice president of corporate development and planning since 2007.
If any of the four executives stays with West Corp. for more than two years after the deal closes, their payout would drop to somewhere between $1.4 million and $3.5 million.
The final four West Corp. executives are eligible for payouts of between $1.1 and $4.5 million. They are: Ron Beaumont, president of safety services and telecom services since 2016; Skip Hanson, president of interactive services since 2014; Rod Kempkes, chief administrative officer since 2012; and Niki Theophilus, chief human resources officer since 2016.
If any of those four executives stays with West Corp. for more than two years after the deal closes, their payout would drop to somewhere between $9,000 and $2.2 million.
If all ten leaders stay with West Corp. for more than two years under Apollo, the company would end up spending $31.5 million on stock, option and deferred compensation payout for these executives.
Six of the nine members of West Corp's board of directors are eligible for payouts on their restricted stock awards of between $95,000 and $107,000 each when the deal closes.
They are: Lee Adrean, former CFO of Equifax; Donald Casey Jr., CEO of Cardinal Health's medical segment; Paul Garcia, former CEO of Global Payments; Jeanette Horan, former CIO for IBM; Diane Offereins, president of payment services for Discover; and Gregory Sloma, a business, financial and tax advisor.
The remaining three West Corp. board members will not receive any payout when Apollo takes over. They are: Anthony DiNovi, Thomas H. Lee Partners co-president; Laura Grattan, Thomas H. Lee Partners principal; and Michael Huber, Quadrangle Group LLC managing principal.
Thomas H. Lee and Quadrangle were the majority owners of West Corp. from 2006 to 2013, and retained stakes of 21.5 percent and 4.5 percent, respectively, in the company as of April 2017, according to SEC filings. Both Thomas H. Lee and Quadrangle have committed to voting in favor of Apollo's acquisition, according to West Corp.
West Corp. has seen disparate results in its various businesses, which was reflected in the company's most recent results. More than 60 percent of the company's business came from its unified communications and telecom practices, which saw sales drop 3.2 percent to $351.1 million amid fierce price competition from its peers.
But West Corp's remaining practices – safety services, interactive services, and specialized agent services – enjoyed mid-single digit to high-single digit sales growth in the company's most recent quarter. Those three divisions combined to deliver revenue of $225.5 million last quarter.