Channel Surfing Blog 

Kelly M. Teal

Oh, to be a discharged executive. No matter what they do, they manage to snag the chi-chi severance packages.

To wit, if you were Level 3’s Kevin O’Hara, you’d receive $585,000 – the equivalent of a year’s pay – plus exercisable stock options as of this Friday.

I’ve been patiently awaiting the 8-K on the deal O’Hara – Level 3’s former president, COO and co-founder – would sign with the company since his March 10 resignation was announced. These filings contain all the good stuff and let me tell you, this one does not disappoint (that’s probably a relative perception).

Besides paying the lump sum, Level 3 will lift the restrictions on the 684,057 stock units O’Hara owns. Those restrictions will end April 1. But what we care about is the dollar total. Level 3’s filing says O’Hara’s stock is worth $1,272,346.02.

It gets better. For O’Hara, anyway.

You see, Level 3 has hired O’Hara as a consultant for a year. Per the 8-K, he will provide the following: operations analysis and support, capital raising support, regulatory and government affairs support, market positioning and strategy, customer targeting, sales, mergers and acquisitions support, and any other activities related to his prior responsibilities with Level 3, requested by a group vice president or higher level executive, and approved by CEO James Crowe.

How much will he make for these services?

Get ready.

O’Hara will earn an eye-popping $100,000 per month as a Level 3 consultant, plus get reimbursed for out-of-pocket expenses.

Does Level 3 not get it? Analysts told me O’Hara was a key reason why the company has had such a terrible time integrating its six acquisitions and, frankly, ended up alienating some channel partners. People thought that shedding the O’Hara albatross would pave the way for change at the wholesaler. It doesn’t look that way now. O’Hara might not be an executive anymore, but once you’re ingrained up-top in a company’s culture, you know how to play the game to your best advantage. Guess we’ll be seeing whether anything really does change for the better in Broomfield.