Executive decision: Just say 'no bonus'

Hail a new era of corporate responsibility in telecom! AT&T CEO Randall Stephenson has decided not to take a bonus for 2008, and he will keep managers, including himself, from getting raises this year. Perhaps it was the least that could be done as the telco is in the midst of cutting about 12,000 jobs, but these moves still could go down as landmark decisions. Why? Not many CEOs ever skip bonuses, even after the worst of years-and AT&T actually had a pretty good one in 2008, all things considered. Managerial salary freezes usually come after a major swoon has begun, not in anticipation of one.

Stephenson reportedly told employees that these moves did not constitute "an easy decision." Not easy because Stephenson did not want to set a standard for other CEOs to have to live up to? It will be interesting to see how other telecom companies respond. From now through March, we will start to see more information being reported about who were the highest paid CEOs in telecom during 2008 and who was paid the largest bonuses. If there was ever a time for those bonuses and the SEC filings detailing them to be put under the microscope, it is now.

As I write this, CNBC is telling me in the background that Wall Street executives were paid $18.4 billion in bonuses for 2008. As President Obama and the New York attorney general continue to scold the gold-cufflinked Street walkers, telecom CEOs may see the writing on the wall. But, with telecom still fairly stable and everyone paying attention to Wall Street's woes, telecom executives probably could take a free pass this year if they wanted to, simply because the industry's performance in 2008 may compare so favorably to that of other industries.

That makes the AT&T move even more interesting. Is AT&T fearing the worst lies ahead? It did not really sound like it during the company's fourth-quarter earnings call last week, though its caution about 2009 came through loud and clear. Still, a historically bad set of macro-economic metrics is staring the industry in the face, so maybe a decision that was not easy for Stephenson and AT&T was actually the obvious one to make. Will it be as obvious to other telecom leaders?

-Dan

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