T-Mobile raises CFO pay amid antitrust scrutiny

Brief description of the dive:

• According to a recent securities filing, wireless carrier T-Mobile US has raised CFO Peter Osvaldik’s base salary, short-term cash bonus and long-term bonus opportunity under a new compensation agreement that keeps Osvaldik employed through July 2, 2026.
• Osvaldik, an eight-year graduate of T-Mobile based in Bellevue, Washington, will receive an annual base salary of “not less than $975,000” under the new contract, as well as an annual short-term cash bonus of not less than 200% of his base salary, payable based on “achievement of previously established performance goals,” the company said. Osvaldik will also be eligible for long-term incentive awards with a target value of not less than 250% of his annual base salary and a target short-term incentive compensation, according to the filing.
• The new pay deal could be a sign that T-Mobile is committed to keeping its CFO as the company continues its aggressive growth, marked by major acquisitions, some of which have raised antitrust concerns among lawmakers as the telecom industry continues to trend toward consolidation.

Diving Insight:

Osvaldik received total compensation of approximately $9.5 million in 2023, consisting of an annual base salary of $950,000 and a short-term incentive award with a total target cash value of $2.7 million — representing 185% of his base salary, according to the company’s most recent proxy filed in April. He also received a long-term cash award with a target value of approximately $6.7 million, according to the proxy.

Osvaldik has served as T-Mobile’s chief financial officer since July 2020, and previously served as the company’s chief accounting officer and vice president of external reporting and technical accounting. Prior to joining T-Mobile, he served as corporate controller and chief operating officer of Redbox and Coinstar operator Outerwall prior to its acquisition in 2016 by private equity firm Apollo Management, according to his LinkedIn profile.

The raise for the chief financial officer comes as T-Mobile faces increased scrutiny from lawmakers over its ongoing acquisition plans.

In May, the company announced its intention to acquire most of fellow telecommunications provider US Cellular in a deal valued at $4.4 billion, according to an AP News report at the time. The deal — which follows previous acquisitions including Mint Mobile and its parent company, as well as T-Mobile’s plans to buy two fiber-optic networks this year — drew pushback from regulators concerned about a broader consolidation trend in the telecommunications sector.

In a letter sent in July to U.S. Deputy Attorney General Jonathan Kanter and Federal Communications Commission Chairwoman Jessica Rosenworcel, the U.S. senators urged both departments to “carefully examine” the proposed merger between T-Mobile and U.S. Cellular, noting that the Justice Department should act as an antitrust enforcer and challenge the deal “if it significantly lessens competition.”

“Since T-Mobile acquired Sprint in 2020, the three carriers have controlled substantially the entire national mobile wireless market,” according to the letter signed by senators including Elizabeth Warren (D-Mass.), Cory Booker (D-N.J.), Bernie Sanders (D-Vt.) and Amy Klobuchar (D-Minn.), among others. “If approved, T-Mobile’s proposed $4.4 billion acquisition of U.S. Cellular would further impoverish competition in the industry by combining the third- and fourth-largest wireless carriers … and giving T-Mobile access to four million new customers.”

As part of the acquisition, T-Mobile will also gain control of US Cellular’s wireless operations and about 30% of the company’s spectrum assets across various spectrum brands, the AP reported.

T-Mobile is also facing a class-action lawsuit stemming from its $26 billion acquisition of Sprint in 2020. The lawsuit, filed by customers of competitors Verizon and AT&T — who are not directly involved in the dispute — claims the T-Mobile-Sprint merger led to higher prices, according to a May report by wireless and broadband publication Fierce Network. T-Mobile lost an attempt to dismiss the lawsuit this month, Fierce Network reported.

T-Mobile did not immediately respond to a request for comment.