An open letter to the Frontier Communications Board and Executives:
Based upon the historical evidence Frontier paid too high a price for the CTF assets. The executive actions taken to date have been in the correct direction, but have not been sufficient.
Two additional actions are required now to improve cash burn and signal that Frontier is serious about correcting current impairments:
1) Cut the common dividend to zero. Cut the preferred dividend to zero and let the cumulative amount become a liability;
2) Defer all executive compensation for all amounts above $200k a year. Executive will become creditors for these amounts. Allow executive loans for hardships if necessary.
You also need to encourage the rank and file to keep the faith, and truly become an organization that customers want to belong too.
Pursue all means to ensure Verizon and any other parties adequately compensate Frontier for any misrepresentations in the transaction.
Mr. McBride's tag line is that no cost is a fixed cost. I agree, let start with the cash flow impact of executive salaries. If you do your job then all of this money will be paid.
Brett Layton, Preferred Shareholder
Disclosure: I am/we are long FRONTIER PREFERRED.