For Mr. Rutledge, in advance of the expiration of his current employment agreement on May 17, 2021, the
Company entered into an amended employment agreement with him effective October 27, 2020 and extending his term through December 31, 2024. The agreement provides for a transition negotiation period between August 15, 2022 and
February 15, 2023, wherein Mr. Rutledge and the Company may mutually agree upon him transitioning to a new role or remaining in his current position as CEO through the end of the term. The agreement increases Mr. Rutledges base
salary to $2.5 million as of the effective date, retains his current annual incentive opportunity of 300% of base salary, and provides for a grant of stock options on November 3, 2020 with a grant date fair value of $30 million and
additional annual grants of stock options over 2021 through 2024, each also with a grant date fair value of $30 million and generally subject to his continued service as CEO through each date of grant. All stock option grants made under the
agreement vest in full on the third anniversary of the date of grant and have a 10-year term to exercise, and the number of stock options granted is based on the Black-Scholes value of the stock options at
grant.
For Mr. Bickham, in advance of the expiration of his current employment agreement on May 18, 2021, the Company entered into an amended employment
agreement with him effective December 23, 2020. The amended agreement extends his term through December 31, 2022, during which he will continue to serve as President and Chief Operating Officer until assuming the role of Vice Chairman at a
time between July 1, 2021 and December 31, 2021, with the specific date determined at the request of the CEO. For the period from January 1, 2022 through December 31, 2022 (the Transition Period) Mr. Bickham will
devote fifty percent of his business time and efforts to the business and affairs of the Company. The agreement provides Mr. Bickham with a base salary of $1,875,000 for the period from January 1, 2021 through December 31, 2021 and a
base salary of $937,500 during the Transition Period, retains his current annual incentive opportunity of 200% of base salary through December 31, 2022, and provides for a grant of stock options on December 23, 2020 with a grant date fair
value of $31.5 million. The stock options vest in full on December 31, 2022 and have a 10-year term to exercise, and the number of stock options granted is based on the Black-Scholes value of the
stock options at grant. See the Employment Agreements section below for additional information on the employment agreements for Messrs. Rutledge and Bickham.
For Messrs. Ellen and Winfrey, no changes were made to their base salary, annual incentive or long-term incentive opportunities. As participants in the 2016
Performance-based Program described above, Messrs. Ellen and Winfrey did not receive awards under the 2020 annual equity program in which most other senior executives, including Mr. DiGeronimo, participated. However, at the time the 2020 annual
equity program was approved, the Committee also approved equity awards of $7.5 million and $9 million for Messrs. Ellen and Winfrey, respectively. These awards were granted at the same time annual grants occurred on January 15, 2020
and were otherwise structured the same as for other senior executives who participated in the annual equity program, with awards delivered in a mix of 90% stock options and 10% RSUs (with the number of awards granted being based on the Black-Scholes
value of stock options at grant and the grant price of RSUs) and vesting in full on the third anniversary of the date of grant with a 10-year term to exercise stock options.
The Committee determined to make these 2020 equity awards for Messrs. Ellen and Winfrey based on several factors. First, the Committee considered the strong performance
achievement to-date under the 2016 Performance-based Program in which Messrs. Ellen and Winfrey participated over the period from May 18, 2016 through December 31, 2019, Charters stock
price increased 113% yielding incremental market capitalization of $43.9 billion. Second, the Committee assessed the outstanding, unvested equity value that Messrs. Ellen and Winfrey were projected to realize under the 2016 Performance-based
Program and the anticipated timing of when such value would vest. If Messrs. Ellen and Winfrey did not receive grants in 2020 with the 3-year cliff vesting schedule used in the annual equity program, they
would not have any long-term equity awards eligible for vesting upon the 2022 expiration of the grants made under the 2016 Performance-based Program. In particular, at the time 2020 equity awards were approved for Messrs. Ellen and Winfrey, four of
the five price hurdles under the 2016 Performance-based Program ($289.76, $364.97, $455.66, and $496.58) had already been achieved, and in September 2020 the fifth price hurdle ($564.04) was achieved. Based on Charters December 31, 2020
closing stock price of $661.55, which remains above the fifth price hurdle, there is the possibility that the remaining unvested awards under the program will be fully vested by mid-2021. The 2020 grants,
along with subsequent awards under the annual equity program anticipated to occur in 2021 and 2022, therefore ensure that Messrs. Ellen and Winfrey have an appropriate amount of unvested equity value to motivate performance and provide continued
alignment with shareholders as well as retention following the conclusion of the 2016 Performance-based Program.
For Mr. DiGeronimo, no changes were made to
his base salary, annual incentive or long-term incentive opportunity, which have been in effect since the Company entered into an amended and restated employment agreement with him effective July 1, 2019 in connection with his promotion to
Chief Product & Technology Officer. Since Mr. DiGeronimo participates in the Companys annual equity program, the Committee approved an equity award of $4 million for him, which was granted on January 15, 2020 at the
time annual equity awards were granted to all eligible employees. This award was delivered in a mix of
Charter
Communications | 30 | 2021 Proxy Statement