Sunday, March 26, 2006
Comcast execs make hay, fight choice
I have no idea who Robert D. Morse is, but I really like the guy.Morse, of Moorestown, N.J., wants to limit the total compensation of executives at Comcast Corporation - the nation's largest cable TV and broadband Internet company - to just $500,000 a year.
And because Morse holds 1,105 shares of stock, the Philadelphia-based company was forced to put his proposal up for a May 18 vote by its shareholders at the Wachovia Center.
His suggestion comes after Brian L. Roberts, Comcast's chairman and CEO, received a 36 percent increase in salary, bonus and other compensation in 2005 even as the company's shares fell 22 percent and Comcast imposed a 6 percent hike on cable TV subscribers.
Roberts took home $12.8 million last year - including a salary of $2.37 million, a bonus of $7.7 million and $2.7 million in other compensation. In 2004, he received $9.4 million total.
He wasn't the only Comcast executive to make more while shareholders earned less and cable customers paid more. The company's annual prospectus also lists five other officers who also received higher compensation.
Morse's reasoning for setting a ceiling for executive compensation is simple.
"It is possible for a person to enjoy a profitable and enjoyable life with the proposed amount, and even to underwrite their own retirement plan," he wrote.
"Assets are being constantly diverted for management's gain," he added. "Most asset gains are the result of a good product or service, produced by the workers, successful advertising, and acceptance by the public market. Just being in a management position does not materially affect these results...."
Ford Motor Co. and Coca Cola have already made similar changes in the way they pay their executives, Morse wrote.
Comcast's board of directors, as you might have guessed, is asking shareholders to reject the proposal, dredging out the age-old argument that it "would severely limit our ability to attract, motivate and retain senior executives."
Instead, the directors want to give their top officers even more money and have proposed a bonus package that could triple Roberts' $2.5 million base salary this year and more than double the salaries of other officers. Meanwhile, Comcast employees may get bonuses of as little as 2.5 percent.
Why should you root for Morse to win if, like me, you don't own a single share of Comcast stock?
Call it subscribers' revenge.
If you live anywhere near Philadelphia you are forced to be a Comcast customer and deal with its lousy service because it has a regional cable TV monopoly.
Comcast gets its monopoly in each Pennsylvania municipality in part by enlisting local governments as patsies. The municipalities get to levy a cable TV tax called a franchise fee based on a percentage of subscriber revenues - ostensibly to afford equipment for their own public access channels.
So whenever the cable company wants to raise its rates, the local government can't object without risking the loss of tax revenues. Comcast also has the nasty habit of hiring relatives of government officials, according to the Washington Post.
Meanwhile, my TV bill jumped nearly $3 a month this year for what Comcast calls "standard cable" - having ESPN, CNN and the like, not HBO or other premium and digital channels - from $47.45 to $50.40. The package include three ultra-right wing/fundamentalist Christian religious channels and two Spanish-langage channels, which I don't want but have no choice but to pay for.
As a liberal Jewish American, I resent being forced to subsidize religious channels I won't watch and foreign language channels that don't even offer English subtitles.
But that's just the way Comcast executives and others in the industry want it. They claim letting consumers choose their own channels won't lower rates and may force some stations out of business.
Think of the administrative headaches they would have if they had to create custom cable TV packages for each of their 21 million customers, then get all the monthly bills right, they've argued.
A recent national poll, however, found most cable subscribers want to pick their channels a la carte. The Federal Comunications Commission favors it as well.
So far this year, Comcast executives and Political Action Committees (PACs) have donated $680,000 to federal election campaigns and parties - more than double what the National Cable & Telecommunications Association has contributed.Comcast also spent $490,000 lobbying last year, down from $3.24 million in 2004.
How much the company is spending in Pennsylvania politics is anybody's guess. Although the state requires political contributors to list their employers, its Internet database of donations does not let users sort the files that way. There is no database for lobbyist expenses.
By the way, Comcast shareholders defeated an ill-worded question last year that would have required the company to spell out in newspaper ads how much it spent in lobbying and campaign contributions at both the federal and state levels.
The directors argued against the measure, noting PAC and political contributions were made by executives as private individual donors not as corporate officers, which would be illegal under federal law. However, the directors did not address the corporation's direct lobbying costs in the proxy statement.
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The Daily Rant by Dave Ralis is licensed under a Creative Commons Attribution 3.0 United States License.
The Daily Rant by Dave Ralis is licensed under a Creative Commons Attribution 3.0 United States License.
