AOL's deal to sell itself to Verizon for $4.4 billion will enrich CEO Tim Armstrong even more than previously thought.
Armstrong is set to receive a "Founders' Incentive Reward" when the merger closes, the company said in an SEC filing today, a package that includes restricted stock worth 1.5% of AOL's market capitalization. At today's stock price, the award would be worth about $59 million.
In addition, the filing said, Armstrong will be able to use the Verizon corporate jet for business travel.
Armstrong stands to get half of the bonus package three years after the merger is completed, followed by the other half a year later. Starting in 2016, he will be eligible for awards of up to $3 million worth of Verizon stock.
That's on top of the windfall Armstrong is getting through his personal ownership of AOL stock and options. At the time of the deal, Armstrong owned or controlled 6.7% of AOL's shares, with a market value of $280 million.
Much of that was in the form of options and other awards he was given for his service as CEO. His direct ownership of stock, worth about $60 million at the price of the deal, came from his investing over $20 million of his own money to buy shares over the years.
The filing also shed light on the path leading up to the acquisition deal.
Before deciding to sell itself to Verizon, AOL considered striking a joint venture with the telecom giant. Those talks, starting late last year, continued until April, when Verizon CEO Lowell McAdam suggested that Verizon instead buy AOL outright.
AOL also considered spinning off certain of its "brand assets," a portfolio that includes TechCrunch, Engadget, and The Huffington Post, but ultimately decided against that idea.
Verizon wasn't the only suitor to approach AOL about a possible deal. AOL also fielded interest from two other companies and a private equity firm, according to the filing, which did not identify the rival suitors.
The seeds of the Verizon-AOL deal were sown at the annual conference in Sun Valley, Idaho, hosted by the investment bank Allen & Company. At the conference, which draws power players from media and technology, Armstrong and McAdam "met and discussed ongoing and emerging trends in their respective industries," the filing says.
At the Sun Valley confab, reporters staked out a meeting between Armstrong and Yahoo CEO Marissa Mayer, who is also a former Google colleague of the AOL chief. Some speculated that the two could be planting the seeds of a merger between their companies, one that has been rumored or called for at least eight times since 2008.