AT&T CEO Randall Stephenson will get a $2 million pay cut for the failed T-Mobile deal.

(Credit: Stephen Shankland/CNET)

AT&T CEO Randall Stephenson will take home $18.7 million in compensation for 2011. But he could've earned a cool $20 million or more had the deal for T-Mobile gone through.

Following the T-Mobile debacle, AT&T's board elected to cut Stephenson's pay for last year by $2.08 million from the $20.2 million he earned in 2010, according to a regulatory filing yesterday.

"For the most recent short- and long- term payouts, the Committee considered the T-Mobile transaction costs in determining compensation payouts for Mr. Stephenson and the other Named Executive Officers..." AT&T said in its filing. "As a result, despite strong operational performance, Mr. Stephenson's compensation was reduced by more than $2 million, including a 25 percent cut in his short-term award, a significant reduction in his payout percentage relative to other managers."

The 25 percent refers specifically to a cash bonus, while an additional 6 percent in stock options was also slashed, according to the Associated Press.

After announcing the $39 billion T-Mobile proposal last March, AT&T admitted defeat last December in the wake of strong opposition by federal regulators.

But the decision to squash the merger will be a costly one. As compensation for the failed bid, AT&T will have to hand over $4.2 billion to T-Mobile in the form of cash and spectrum rights, a huge amount compared with breakup fees typically seen in such deals.

Following the thwarted bid, Stephenson blasted the FCC for blocking the merger, arguing that the government's process for regulating and approving such deals is fluid and inconsistent.