Altice's stated goal of trimming $900 million in annual costs from its new cable acquisition, Cablevision (NYSE: CVC), will start with the departure of the MSO's top 10 executives, Altice CEO Dexter Goei said.
These likely departures, he said, will include founder Charles Dolan and his family, who collectively took $46 million in compensation from Cablevision in 2014. CEO James Dolan took home $23.7 million in cash and stock compensation last year.
"Somewhere in the range of $80 million to $90 million per year can go away in just not having that executive team," Mike McCormack, an analyst at Jefferies LLC, said of Cablevision, told Bloomerg
Also speaking to the news service, Goei said Altice will integrate a stock-compensation-based philosophy on Cablevision, emphasizing executive performance.
"If you have a lot of, granted, very talented people, but getting paid a lot of cash compensation with not really being incentivized to create value for shareholders, that kind of shows an example relative to the other 11,000 to 15,000 employees as to how they should behave," Goei said. "We don't like that. We don't operate that way."
Speaking to investors earlier this month, just after Altice announced its $17.7 billion agreement to buy Cablevision, Altice Chairman Patrick Drahi pledged to bring the company's European-style austerity to the American MSO. "I don't like to pay big salaries," Drahi said.
Drahi's austerity plans for Cablevision have been met with skepticism by MoffettNathanson analyst Craig Moffett. He wonders how salary reductions will go down in Cablevision's competitive labor market.
"It's hard to imagine in a labor market like New York that you're going to go to top executives and say, 'By the way, I'm going to pay you 75 percent less than I used to -- enjoy,' " he said.
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