Talk about robbing the grave!
The heirs of deceased Cablevision vice chairman Marc Lustgarten are being forced to repay $4.9 million as part of a $34 million settlement the cable operator agreed to yesterday in order to resolve a lawsuit over the timing and pricing of its stock options grants.
Moreover, Cablevision’s compensation consultant, Harvey L. Beneson, is being forced to pledge the mortgage on his tony Bridgehampton, LI, home in order to cover a $2 million loan he is on the hook for as part of his role in the company’s “backdating” scandal.
Beneson, of New York firm Lyons Beneson & Co., also agreed to forfeit $1.5 million in compensation.
In total, 16 current or former Cablevision executives and board members – none of whom admitted any liability or wrongdoing as part of the settlement – have to repay the gains booked on improperly timed stock option grants, a practice known as backdating.
In order to facilitate a resolution of the lawsuit, which was brought on behalf of the Teachers Retirement System of Louisiana and led by law firm Grant & Eisenhofer, Cablevision founder Charles Dolan agreed to repay $1 million.
Cablevision CEO James Dolan, whose band JD & The Straight Shot will mark the release of its sophomore album with a benefit concert on June 24, will fork over $1.37 million as part of the deal.
Cablevision General Counsel Robert Lemle was assessed the biggest penalty of any one person by far, having to give back more than $7 million.
Cablevision, which was investigated by the SEC and forced to restate financial results because of the scandal, agreed to adopt certain corporate governance reforms as part of the agreement.
“The special litigation committee has expressed confidence that these reforms will ensure the company’s compliance with respect to the granting of stock options,” said spokesman Charlie Schueler in a statement.
“We note that this matter was discovered and disclosed after a voluntary review by the company and we look forward to moving ahead without the potential prospect of costly and protracted litigation.”
Cablevision has recently been making news for other deals.
The company spent more than $1 billion to acquire the Sundance cable network and Long Island’s Newsday.
Cablevision closed at $27.25, up 3 cents.