In May, shareholders protested Comcast pay

With the Comcast Corp. stock price hitting a decade low in the first quarter of 2009, the Philadelphia company's shareholders withheld support for four independent directors who determine Comcast's executive pay and threw more yes votes behind a resolution meant to reduce some of the outsize power of the founding Roberts family.

The shareholder resolution to do away with the supersize value of shares owned by chief executive officer Brian Roberts and family trusts received support from 39 percent of the shares voted, up from 30 percent in a similar vote in 2008.

The vote took place at the annual shareholders meeting in May at the Convention Center. Results were released earlier this month in a regulatory filing.

D'Arcy Rudnay, senior vice president of communications, said that the vote had not altered the company's thinking on its ownership structure and that the board has felt comfortable with executive compensation.

"While we listen to our shareholders on all sorts of things, people know coming into Comcast that this is a dual-stock company," she said.

Comcast's dual-stock structure is disclosed in public filings and was voted on and twice approved in the 1980s and once earlier this decade, Rudnay said.

The resolution in May was nonbinding, and the four directors on the compensation committee - S. Decker Anstrom, Joseph J. Collins, Michael I. Sovern, and Judith Rodin - were reelected by comfortable margins by shareholders who remained supportive.

Rudnay said the withheld votes for the directors on the compensation committee were a reaction to an unfavorable recommendation by a proxy-advisory service, RiskMetrics Group Inc.

Comcast adjusted some compensation provisions to win a favorable recommendation, but it could not address all the concerns, Rudnay said.

One, she said, involved federal tax "gross-ups" for Ralph Roberts, a company founder and father of Brian Roberts - which means the company pays for his federal tax. Eliminating those provisions would be prohibitively expensive because they were negotiated many years ago, Rudnay said.

Carol Bowie, the head of the Governance Institute at RiskMetrics Group, said shareholders communicated concerns over governance issues by withholding votes.

"In the absence of a say on pay, there is only one avenue for shareholders to express their dissatisfaction on compensation - and that is to withhold votes for compensation board members," she said.

RiskMetrics' report on Comcast's compensation notes several areas of concern: use of corporate aircraft, the interest rates on deferred compensation pay accounts, and executive-performance metrics.

With the proposal to alter Comcast's ownership structure, Bowie said, a yes vote of greater than 20 percent typically shows deep support with common shareholders.

That's because Brian Roberts most likely voted his superpowerful stock against the measure that would dilute his power. Comcast's proxy states that there were 2.1 billion shares of Class A stock, with each one having a value of 0.14 of a vote at the May meeting.

Brian Roberts had 9.4 million Class B shares to wield, with a power of 15 votes each. Comcast would not comment on how Roberts voted his shares.

Ford Motor Co. has faced resolutions to alter its ownership structure to dilute Ford family control of the Detroit automaker. Shareholder support for the proposal fell to 19.5 percent this year after reaching 27.5 percent in 2007, Bowie said. She said the 2009 figure was preliminary.

As for independent Comcast directors, nine faced reelection this year. Besides Anstrom, Collins, Rodin, and Sovern, they were Kenneth J. Bacon, Edward D. Breen, J. Michael Cook, Gerald L. Hassell, and Jeffrey A. Honickman.

Displaying the sentiments of some shareholders, the number of withheld share votes for the four directors on the compensation committee was five to 10 times larger than the withheld votes for the other five independent directors, according to vote tallies.

Compensation has been a sore point for some.

Brian Roberts was the highest-paid executive in the Philadelphia region in 2008, earning $24.7 million in total pay. Comcast's pay has come under fire as its stock has stumbled.

Comcast's stock price closed Friday up 16 cents at $15.71. The company's share price reached a low for this decade at $11.22 on March 9, a time of almost-panic on Wall Street as the economy plummeted because of frozen credit markets, overextended financial institutions, and the recession. The high for the decade was $30.17 on March 7, 2001.

Ahead of Comcast Corp.'s annual shareholder meeting in May 2008, Anstrom, Collins, Sovern, and Rodin met privately with hedge fund operator Glenn Greenberg, of Chieftain Capital Management, to discuss, among other things, compensation at Comcast.

While Brian Roberts' pay was the highest in the Philadelphia region, his compensation was roughly in line with other CEOs' in the major entertainment and media companies in California and New York, according to documents detailing pay at News Corp., Time Warner Inc., CBS Corp., Viacom Inc., and the Walt Disney Co.

"Our board feels very strongly," Rudnay said, "that you have to recruit from these industries."