By Ryan Dezember And Kimberly S. Johnson
Michael J. Cavanagh, who stunned Wall Street last year when he
left J.P. Morgan Chase & Co. for a private-equity firm, is
joining Comcast Corp. as chief financial officer after less than a
year at Carlyle Group LP.
Mr. Cavanagh, a James Dimon protégé who was considered a
possible successor to the J.P. Morgan chief executive, comes to
Comcast as the cable giant looks to regroup after the collapse of
its $45.2 billion bid to acquire Time Warner Cable Inc.
In a statement Monday, Mr. Cavanagh said the opportunity at
Comcast, the nation's largest cable-TV and broadband provider and
owner of the NBCUniversal family of TV networks, was "something I
could not pass up." He is expected to start in his new role by July
6, and his employment agreement is effective through 2019,
according to a regulatory filing. Mr. Cavanagh is succeeding
Michael J. Angelakis, who will lead a $4.1 billion investment
company with Comcast and become a senior adviser to the
company.
Mr. Cavanagh, 49 years old, joined Carlyle last summer as
co-president and co-chief operating officer alongside longtime
Carlyle deal-maker Glenn Youngkin. The two men jointly ran the
Washington, D.C., firm's day-to-day operations. He was one of
several executives expected to lead the private-equity firm when
its three founders--all in their 60s--step down.
His move is yet another example of high-profile Wall Street
executives leaving for jobs outside of the finance industry.
In March, Google Inc. said Morgan Stanley CFO Ruth Porat would
become its next finance chief. And last week, Spanish-language
broadcaster Univision Communications Inc. tapped a Goldman Sachs
Group Inc. managing director to be its new finance chief.
Mr. Cavanagh's appointment comes after Comcast's deal to buy
Time Warner Cable fell apart last month under pressure from
regulators. Some analysts have speculated that Comcast could
attempt another major tie-up as it seeks new sources of growth--for
example, by making a push into the wireless business or looking
overseas for targets such as cable operators or TV-channel
owners.
The appointment of a senior Wall Street executive to Comcast's
top ranks is unlikely to damp such speculation. After he held the
job of CFO at J.P. Morgan during the financial crisis, Mr. Cavanagh
served as co-chief executive of the bank's sprawling corporate and
investment bank, which, among other things, advises on and helps
fund mergers and acquisitions. J.P. Morgan advised Comcast on the
aborted Time Warner Cable deal.
Carlyle executives were surprised when Mr. Cavanagh told them on
Friday he was leaving to take the Comcast job, according to people
familiar with the matter. Carlyle, which went public in 2012, has
been transparent about its succession planning and made it clear
that Mr. Cavanagh was on a short list of the firm's next generation
of leaders.
Likewise, Mr. Cavanagh's decision to leave J.P. Morgan last year
shocked many at the bank. "This was hands-down the hardest decision
I've ever had to make," he said in an internal memo at the time.
Mr. Dimon called it "a regrettable loss for our company."
Mr. Cavanagh is facing a number of challenges as Comcast's
finance chief. The cable company and its rivals are grappling with
a rapidly shifting industry landscape, with more consumers dropping
their pay-TV connections. That, and the need to keep costs down
amid such pressure, is likely to be another focus for Mr. Cavanagh
in his new role.
Mr. Cavanagh's total compensation for 2015 could top $39.5
million in cash, bonuses, restricted stock and deferred
compensation at Comcast.
His 2015 base salary will be $1.8 million and he is eligible for
a cash bonus valued at three times that salary. He'll also receive
a $10 million signing bonus made up of performance-based stock that
vests in 13 months, as well as $2.5 million in restricted shares
that vest over three years. Mr. Cavanagh is also due another $10
million in deferred compensation that is subject to clawback should
he leave within a year, and Comcast said it would also pay him $9.8
million for compensation he left behind at Carlyle.
Carlyle rolled out a lucrative pay package for Mr. Cavanagh,
whose 2014 compensation at the firm was valued at $31.2 million.
But in leaving Carlyle after less than a year, he is forfeiting
much of it, including about two-thirds of $32 million in payments
intended to compensate him for J.P. Morgan stock that he left on
the table when he quit the bank, according to people familiar with
the matter.
In all, he received about $14 million in cash and stock from
Carlyle, according to securities filings and people familiar with
the matter.
Mr. Cavanagh's departure follows that of another senior
executive. Adena Friedman last year returned to Nasdaq OMX Group
Inc. as co-president after a three-year stint as Carlyle's finance
chief.
"Mike is going from one great company to another," a Carlyle
spokesman said on Monday. "We have a deep bench of talent."
Write to Ryan Dezember at ryan.dezember@wsj.com and Kimberly
Johnson at kimberly.johnson@wsj.com
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