I last wrote about Comcast on January 23. It's time for an update on that situation.
Last week Comcast, the cable operator, announced a revision in its compensation package for the company founder, Ralph Roberts. He was paid $1.85 million in 2007. His salary for 2008 will be a little bit less. $1,849,999 dollars less.
The company will also eliminate a benefit that was to have continued payments to Mr. Roberts' estate for five years after his death.
These moves are widely attributed to the influence of Chieftain Capital Management, which owns about 2% of the company's equity.
Executive compensation issues are, generally, eyewash. In a more substantive move, though, Comcast said that it will buy back $6.9 billion of its stock over two years and pay its first dividend in almost a decade, sending the shares up the most since 2002.
A Bloomberg reporter, Todd Shields, interviewed Glenn Greenberg (Chieftain's managing director) last week. Greenberg told Shields: "They certainly hit on all the important points, which we and others had been discussing with them. Now it's up to them to create value, which they have not done in the past 10 years."
Another issue that has arisen in the Comcast context recently is that of "core" versus "non-core" acquisitions as growth strategy. I'll have a few words to say on that theme tomorrow. Until then, enjoy President's Day.
Showing posts with label Chieftain Capital. Show all posts
Showing posts with label Chieftain Capital. Show all posts
Monday, February 18, 2008
Wednesday, January 23, 2008
Chieftain/Comcast
Glenn Greenberg, the chief of Chieftain Capital, is ticked off with Comcast, and with its CEO Brian Roberts, for an obvious reason: Comcast stock is down 40% over the past year.
Roberts' defenders, including the folks at the Motley Fool website, will tell you that the situation isn't of Roberts' making, that there are industry-wide difficulties with cable. The high cost of providing it, to start with. The increasing appeal of satellite TV.
Still, there are obvious answers to that. Is Comcast stock losing value because the company is staying in a dying industry. That's hardly a reason for confidence in its management! Couldn't Roberts' team diversify the company's assets and products?
Perhaps they don't have any very pressing incentive? The company has a dual-share structure, so that Brian Roberts and the rest of the Roberts family (Brian's father is the company founder) have 33% of its voting power, while owning only 1% of the shares.
The story in yesterday's WSJ suggested there's not a lot that Greenberg can do about the situation (except, of course, to sell his stock). He'd need allies to do more, and they haven't shown themselves yet.
Also: didn't he know about the dual share structure when he bought in? If not, why not?
For the rest of us, the question is whether such a structure, with its management-entrenching superstock, is a good or bad policy idea. Is it something the SEC ought to worry about? or just the natural result of freedom of contract? does it have a causal impact on performance?
I've been piling up a lot of questions, and offering no answers. Let's make a few simple declarative sentences to end upon.
Early this morning (before I wrote this) someone from Malaysia reached this site by running a search for the name "Glenn Greenberg." I'm always delighted at the thought of an international audience, and I hope that particular visitor found my biographical observation on Mr. Greenberg, yesterday's entry, of some value.
That's going to have to suffice as an ending!
Roberts' defenders, including the folks at the Motley Fool website, will tell you that the situation isn't of Roberts' making, that there are industry-wide difficulties with cable. The high cost of providing it, to start with. The increasing appeal of satellite TV.
Still, there are obvious answers to that. Is Comcast stock losing value because the company is staying in a dying industry. That's hardly a reason for confidence in its management! Couldn't Roberts' team diversify the company's assets and products?
Perhaps they don't have any very pressing incentive? The company has a dual-share structure, so that Brian Roberts and the rest of the Roberts family (Brian's father is the company founder) have 33% of its voting power, while owning only 1% of the shares.
The story in yesterday's WSJ suggested there's not a lot that Greenberg can do about the situation (except, of course, to sell his stock). He'd need allies to do more, and they haven't shown themselves yet.
Also: didn't he know about the dual share structure when he bought in? If not, why not?
For the rest of us, the question is whether such a structure, with its management-entrenching superstock, is a good or bad policy idea. Is it something the SEC ought to worry about? or just the natural result of freedom of contract? does it have a causal impact on performance?
I've been piling up a lot of questions, and offering no answers. Let's make a few simple declarative sentences to end upon.
Early this morning (before I wrote this) someone from Malaysia reached this site by running a search for the name "Glenn Greenberg." I'm always delighted at the thought of an international audience, and I hope that particular visitor found my biographical observation on Mr. Greenberg, yesterday's entry, of some value.
That's going to have to suffice as an ending!
Tuesday, January 22, 2008
Hank Greenberg's kid
Any baseball fan with any sense of history knows who Hank Greenberg was. Not Maurice Greenberg, nicknamed Hank, of AIG, whom I've written about here before. I mean the Detroit Tigers slugger Hank Greenberg.
That Greenberg helped make the Tigers the American League champs in both 1934 and 1935 -- his second and third years in the big leagues.
He lost some playing time due to injuries and, like many of his generation, lost years more playing time to the war, serving with distinction in the Air Corps. He was released in the middle of 1945, in time to help the Tigers in the home stretch of the season -- they won the World Series that year, with two WS homes from him.
And so forth. Why do I bring this up in "Proxy Partisans"? Because a story in the WSJ today informs me that Glenn Greenberg, the founder of Chieftain Capital Management Inc., is THAT Greenberg's son. And Chieftain is involved in a proxy fight with Comcast, of which I'll write tomorrow.
Glenn Greenberg's mother is Caral Gimbel, the heiress of an old department store fortune. I'm reminded of the old Christmas movie, "Miracle on 34th Street." A Macy's Santa Claus (who also happens to be the real thing) tells a Mother and son that the toy they want they would be better off buying at Gimbel's than there. "Mr. Macy" is of course initially furious to hear his Santa has done such a thing, but the word-of-mouth on the act of scrupulous honesty rebounds to his store's credit.
Ah ... memories.
That Greenberg helped make the Tigers the American League champs in both 1934 and 1935 -- his second and third years in the big leagues.
He lost some playing time due to injuries and, like many of his generation, lost years more playing time to the war, serving with distinction in the Air Corps. He was released in the middle of 1945, in time to help the Tigers in the home stretch of the season -- they won the World Series that year, with two WS homes from him.
And so forth. Why do I bring this up in "Proxy Partisans"? Because a story in the WSJ today informs me that Glenn Greenberg, the founder of Chieftain Capital Management Inc., is THAT Greenberg's son. And Chieftain is involved in a proxy fight with Comcast, of which I'll write tomorrow.
Glenn Greenberg's mother is Caral Gimbel, the heiress of an old department store fortune. I'm reminded of the old Christmas movie, "Miracle on 34th Street." A Macy's Santa Claus (who also happens to be the real thing) tells a Mother and son that the toy they want they would be better off buying at Gimbel's than there. "Mr. Macy" is of course initially furious to hear his Santa has done such a thing, but the word-of-mouth on the act of scrupulous honesty rebounds to his store's credit.
Ah ... memories.
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