T-Mobile hikes CFO compensation amid antitrust scrutiny

Dive Brief:

Wireless carrier T-Mobile US increased CFO Peter Osvaldik’s base salary, short-term cash incentive and long-term incentive opportunity in a new compensation deal that provides for Osvaldik’s employment through July 2, 2026, according to a recent securities filing.
Osvaldik, an eight-year veteran of the Bellevue, Washington-based T-Mobile, will receive an annual base salary of “no less than $975,000,” as part of the new agreement, as well as annual short-term cash incentive of no less than 200% of his base salary, payable based on “attainment of pre-established performance goals,” the company said. Osvaldik will also be eligible for long-term incentive awards with a target value of no less than 250% of his annual base salary and his target short-term incentive compensation, according to the filing.
The new compensation agreement could signal T-Mobile’s goal of retaining its CFO, as it continues a push of aggressive growth marked by large-scale acquisitions — some of which have sparked antitrust concerns among lawmakers as a trend of consolidation continues in the telecom industry.

Dive Insight:

Osvaldik received total compensation of approximately $9.5 million in 2023, comprised 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 latest proxy filed in April. He also received a long-term compensation award with a target value of about $6.7 million, according to the proxy.

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

The CFO’s raise comes as T-Mobile fields increased scrutiny from lawmakers regarding ongoing acquisition plans.

In May, the company announced its intent to acquire most of fellow telecom provider U.S. Cellular in a deal valued at $4.4 billion, according to an AP News report at the time. The deal — which followed previous acquisitions including Mint Mobile and its parent company, as well as plans by T-Mobile to buy two fiber-optic cable networks this year — sparked pushback from regulators concerned about a broader trend of consolidation inside the telecom space.

In a July letter to U.S. Assistant Attorney General Jonathan Kanter and Federal Communications Commission Chair Jessica Rosenworcel, U.S. Senators urged the two departments to “closely scrutinize” the proposed merger between T-Mobile and U.S. Cellular, noting the Department of Justice should step in as an antitrust enforcer to challenge the deal “if it substantially reduces competition.”

“Since T-Mobile acquired Sprint in 2020, three carriers have controlled essentially the entire national mobile wireless service market,” according to the letter, signed by senators including Elizabeth Warren (D-Mass.), Cory Booker (D-NJ), Bernie Sanders (D-VT) and Amy Klobuchar (D-Minn.), among others. “If approved, T-Mobile’s proposed $4.4 billion acquisition of US Cellular would further deplete competition in the industry, 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 would also gain control of U.S. Cellular’s wireless operations, and approximately 30% of its spectrum assets across a variety of spectrum brands, AP said.

T-Mobile is also facing a class-action lawsuit stemming from its $26 billion acquisition of Sprint in 2020. Filed by customers of competitors Verizon and AT&T — which are not directly involved in the litigation — the suit alleges the T-Mobile-Sprint merger resulted in higher prices, according to a May report by wireless and broadband-focused publication Fierce Network. T-Mobile lost a bid to dismiss the suit that month, Fierce Network reported.

T-Mobile did not immediately respond to requests for comment.