NEW YORK — Comcast CEO Brian Roberts added “chairman” to his title at the leading cable operator Wednesday, after reigning chairman Michael Armstrong formally announced his retirement.
At its annual meeting in Philadelphia, Comcast shareholders voted overwhelmingly to re-elect all board members while rejecting all shareholder proposals to revise some of the company’s corporate governance standards.
Roberts’ ascension to the chairmanship was pre-ordained under Comcast’s articles of incorporation. Despite recent vocal protests from major shareholder groups like union AFL-CIO, the company said the provision was put into place at the time of the AT&T Broadband acquisition as part of a governance structure that would “provide for stability and be in the best interest of shareholders.”
A group of union pension funds, led by the AFL-CIO, tried unsuccessfully to overhaul the company’s corporate governance standards, including a proposal to increase the number of independent board members to two-thirds of total those on the board. The AFL-CIO is also uncomfortable with the fact that the Roberts family controls more than 33% of voting shares, despite having only 1% of the equity capital. The group also had lobbied shareholders to withhold votes from CEO Roberts as well as director Decker Anstrom, whom it insisted has a conflict of interest.
But in a show of unity that’s a lot easier to achieve when you control the vote, Comcast stockholders re-elected the board with 92% of the votes cast. Company proposals were passed with 96% of the vote.
It’s just that kind of hegemony that the investor-agitators were trying to change. The Roberts’ family’s class B stock awards them 15 votes per share. By contrast, common stockholders are entitled to only 0.2 votes per share.
Earlier this month, Roberts offered a small concession to his corporate governance detractors when he announced he would cede his role as head of the board’s nominating committee. That committee has been criticized for not naming any additional independent directors for election at recent annual meetings.
Outgoing chairman Armstrong orchestrated the sale of AT&T Broadband to Comcast and became chair of the cabler after the deal closed in late 2002. He will remain a non-exec board member and a consultant to the company.
In a statement, Roberts said Comcast “is well positioned for the future with an unparalleled distribution platform, a strong balance sheet and bright growth opportunities.”
“Today’s shareholder vote is a gratifying confirmation of our strategy for future growth. I have never been more excited about Comcast’s business and prospects,” he said.
Comcast also confirmed plans to ramp up a voice-over-IP phone service, starting with a test run in Philadelphia, Indianapolis and Springfield, Mass. Company intends to roll out the service to half of its 21 million homes next year, and to its entire footprint by 2006.
The country’s largest cabler is a late-bloomer on the telephony front, while rivals Cablevision and Time Warner Cable have been aggressively pushing the high-margin service.
Roberts also told assembled investors the company would continue to push hard to ramp up its high-speed data and video-on-demand offerings, which give cable operators a competitive advantage over satellite. Company said it will offer a full complement of digital options to all its systems by the end of 2004, at which time the company will also be generating substantial free cash flows after its hefty capital investments.
But investors are still keeping a close eye on possible acquisitions, especially after Roberts’ abortive bid for Disney.
“We’ve moved on,” Roberts said of the Disney bid. “We think our company’s in great shape.”