Consumer Advocate Calls Fairpoint Bonuses Excessive

By Elaine Grant on Tuesday, June 16, 2009.

A Fairpoint board member has been named the company’s new CEO.

As NHPR’s Elaine Grant reports, New Hampshire’s Consumer Advocate is raising some concerns about that choice.

Incoming CEO David Hauser has been on Fairpoint’s board since 2005 and is chairman of the compensation committee.

That committee decided earlier this year to award bonuses and stock totaling $2.4 million to seven Fairpoint executives for their work in 2008.

The company lost $68 million dollars on revenues of one point three billion dollars last year.

And according to public filings, Fairpoint may not be able to pay its next debt payment of $45 million dollars, due June 30.

Meredith Hatfield is New Hampshire’s Consumer Advocate.

“It’s not a signal of good judgment when a company in a public document is saying two different things, number one, we’re in such financial dire straits that we may not make a major debt payment as required by our lenders, but we are rewarding our top management who were responsible for the problems we are having in cutover with bonuses.”

Hatfield says her office has asked Fairpoint to have its executives return the bonuses.

Hauser, who becomes CEO July first, says he is unaware of that request.

For NHPR News, I’m Elaine Grant.