Comcast Corp. CEO Brian Roberts and director Decker Anstrom are under heavy union fire.
The AFL-CIO, Communications Workers of America and the International Brotherhood of Electrical Workers urged the MSO’s shareholders Wednesday to withhold support from Roberts and Anstrom at Comcast's annual meeting May 26.
The unions are concerned about employees’ retirement savings.
“The retirement savings of America's working families depends on companies like Comcast having responsible corporate governance," AFL-CIO secretary treasurer Richard Trumka said in a prepared statement. "We believe Comcast's charter unfairly entrenches management and grants CEO Brian Roberts effective control over the board.”
The MSO countered the claims, with a spokesman issuing the following statement: “Comcast corporate governance, as reflected in our proxy, indicates a philosophy that the interests of management should be aligned with those of shareholders. We believe that our governance structure accomplishes just that.”
The unions’ beef with Anstrom? His company, Landmark Communications Inc., collected “tens of millions of dollars in programming fees from Comcast during his service as chair of the MSO’s compensation committee," Trumka added.
In its proxy, Comcast said that under applicable NASDAQ rules and the MSO’s corporate-governance guidelines, Anstrom “qualifies as independent since the amount of programming fees we pay for such services falls within NASDAQ-prescribed limits. In each of 2000, 2001, 2002 and 2003, the amounts paid to Landmark did not exceed 5% of the greater of Landmark's consolidated gross revenues for that year or $200,000.”
Comcast added that its board also determined that the Landmark business relationship is “on customary arms-length terms.”
Under Comcast's current corporate-governance structure, Roberts controls one-third of its voting power despite holding approximately 1% of outstanding shares. In addition, the unions said, he served as chair of the nominating committee, which failed to nominate any additional independent directors for election at the upcoming meeting.
In its proxy, the company said it is moving toward an amendment of its articles of incorporation that was adopted by shareholders during its integration of AT&T Broadband and “our transition from a majority-controlled corporation to a corporation with a larger, more diverse shareholder base.”
Comcast’s proxy indicated that if the proposed amendment were approved by shareholders, “the governance and directors nominating committee will at all times be composed solely of independent directors, as required by NASDAQ rules, who are designated by the board.”
Comcast shareholders are voting on a pair of shareholder proposals -- one that urges the board of directors to adopt a policy of remaining two-thirds independent, and one requesting that the board restructure the company’s stock to provide for one vote per share.
As for the former, Comcast wrote in its proxy that the two-thirds-minimum independent-board-requirement proposal differs from the standards determined appropriate by NASDAQ and the New York Stock Exchange and approved by the Securities and Exchange Commission.
“The standards for board independence adopted and approved by these regulatory bodies provide that a majority of the board must be independent,” the company wrote. “In adopting our corporate-governance guidelines, our board also determined that a majority requirement for independent directors is the appropriate standard and is in the best interest of the company and our shareholders.”
Comcast continued, “The board sees no reason for the company to adopt a different standard from that promulgated by its regulators and …believes the heightened minimum standard for board independence is not in the best interest of the company and our shareholders.”
Relative to the one-vote-per-share issue, Comcast’s proxy indicated that the company has held a dual-voting class structure since it went public in 1972.
Prior to the AT&T Broadband acquisition, Roberts owned company stock that represented 87% of the combined voting of all Comcast stock. In connection with that transaction, Roberts reduced his voting interest to one-third -- a move that facilitated the deal -- and “92% of AT&T shareholders voting on the governance proposal” approved.
The proxy also cited the role of the Roberts family and “the stable leadership” it has provided as one of the reasons why the stock’s performance has been well above a number of indices, stating that their presence has “been, and will continue to be, crucial to the long-term success of our business and our position of financial strength.”
CWA has been at odds with Comcast recently over other issues, too.
In April, director of research George Kohl said, "We believe Comcast is out to crush unions," and officials accused the MSO of encouraging employees to decertify local unions already in existence and trying to prevent other employees from organizing.
And in March, a 173-page report prepared by Kramer.Firm Inc. and commissioned by CWA accused the MSO of committing more than 40,000 electrical and electrical-safety-code violations throughout the Detroit area. The Detroit Cable Communications Commission set a Friday deadline for the operator to explain how it will remedy those violations.