Comcast's Roberts under microscope


A Comcast Corp. institutional investor that owns a 2% stake in the largest U.S. cable operator suggests that chairman and CEO Brian Roberts be fired in an effort to boost the company's lagging stock price.

The proposal by New York's Chieftain Capital Management comes well ahead of Comcast's annual shareholder meeting season in the spring, which often brings with it shareholder suggestions for changes. It argues that Comcast shares "currently change hands for the same $17 they traded for in late 1998," suggesting Roberts be replaced with a CEO who is focused on lowering capital expenditures and management compensation, making only a few, disciplined acquisitions and abolishing Comcast's super-voting stock.

The super-voting shares give the Roberts family 33% voting power while it owns only about a 1% economic stake in Comcast. This super-voting structure has been the target of shareholder proposals for change in recent years.

But while many on the Street agree with Chieftain that Comcast shares would ideally be much higher, no one reached Thursday wants to lose Roberts.

"Axing Brian is a ludicrous notion," said Miller Tabak + Co. analyst David Joyce.

Pali Research analyst Richard Greenfield said, "I think it isn't even a debatable issue."

One media investor even argued that with such proposals, Chieftain would only undermine its push for better shareholder returns.

Earlier in the week, Institutional Investor Magazine, based on an annual poll, named Roberts -- as it did last year -- the best CEO in the cable and satellite industry.

Comcast expressed little interest in making changes at the top. "Comcast continues to perform well, consistently delivering superior revenue and cash flow growth and significant free cash flow despite a challenging economy and an increasingly competitive environment," the company said. "Our management team is intensely focused on executing our strategic plan, investing for profitable growth and creating long-term shareholder value."

A spokeswoman also said the cable giant welcomes input from shareholders. "While we have expressed our disagreement with Chieftain's perspective in the past, we will review Chieftain's most recent correspondence and will respond in due course," the spokeswoman said.

But Greenfield said Chieftain's idea that Comcast should cut capital expenditures, lever up and buy back stock would hurt efforts to boost the stock. "Like it or not, Comcast is in a war, with competition escalating on existing fronts (such as satellite TV and telecom firms) and all-new fronts (such as Apple and wireless services)."