A Comcast critique

Union investors seek management overhaul

Comcast CEO Brian Roberts is likely to get an earful about his company’s corporate governance standards at its annual meeting May 26.

An investor group of union-run pensions heavily invested in Comcast stock, led by the activist AFL-CIO, has stepped up its campaign to force a more democratic regime upon the cabler’s board and curb what member unions see as Roberts’ absolute voting power despite his limited capital investment in the cable company.

Borrowing a page from the Roy Disney-Stan Gold school of investor activism, the AFL-CIO, Communications Workers of America and the Intl. Brotherhood of Electrical Workers have set up a Web site, ComcastVoteNo.com, to urge investors to withhold votes for Roberts and director Decker Anstrom.

AFL-CIO secretary-treasurer Richard Trumka last week said that he believes Comcast’s charter “unfairly entrenches management and grants CEO Brian Roberts effective control over the board.”

The AFL-CIO has taken a particularly aggressive stance lately on U.S. corporate governance. It first vocalized its discontent with Comcast’s board earlier this year during the thick of the company’s initial play to buy Disney (Daily Variety, Feb. 26). Now it’s demanding reforms that include curbing the Roberts family’s super-voting rights.

Brass target

Unions said their goal is “to increase the level of independence on the Comcast board of directors and its key committees, decrease the control that CEO Brian Roberts exercises over the board and unlock shareholder value by treating all common shareholders equally.” The union group notes that Roberts has served as chairman of the nominating committee, which did not nominate any additional independent directors for the board at the last annual meeting.

Reformers want shareholders to vote for a One Share, One Vote proposal that would rectify Comcast’s “unusual dual-class capital structure” whereby Roberts holds a disproportionate percentage of the shareholder votes relative to the family’s actual investment.

Roberts controls 33% of voting rights through a special class of “B common stock” despite owning barely 1% of Comcast’s total equity capital.

“We believe this capital structure reduces accountability to shareholders by allowing corporate control to be exercised by insiders,” the unions said in a statement on their Web site.

Org further notes that less than two-thirds of Comcast’s board is independent using the company’s own definition of director independence. “Michael Armstrong, Julian Brodsky, Brian Roberts and Ralph Roberts are current or former executives of Comcast or its predecessors and all continue to have compensation agreements with Comcast,” the union group noted.

“Sheldon Bonovitz, the cousin-in-law of Brian Roberts, is the managing partner of Duane Morris LLP, a law firm that provides legal services to Comcast, while Decker Anstrom is an executive of Landmark Communications, Inc., a company that provides programming to Comcast through its subsidiary, the Weather Channel.”