☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
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☐ | Soliciting Material |
Not Applicable
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Dear Stockholder:
You are invited to attend the annual meeting of stockholders of Charter Communications, Inc. (the “Company” or “Charter”), which will be held by means of a virtual meetingat 6350 S. Fiddler’s Green Circle, 2nd Floor (Conference Room C), Greenwood Village, CO 80111 on Tuesday, April 27, 202125, 2023 at 10:8:30 a.m. (Eastern(Mountain Daylight Time).
Details of the business to be conducted at the annual meeting are provided in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.
Whether or not you attend the annual meeting, it is important that your shares be represented and voted at the meeting. Therefore, Iwe urge you to sign, date, and promptly return the enclosed proxy in the postage-paid envelope that is provided, or you may vote via the Internet pursuant to the instructions on the proxy card. If you decide to attend the annual meeting, you will have the opportunity to vote in person.
On behalf of management and the boardBoard of directors, IDirectors, we would like to express our appreciation for your continued interest in Charter.
Sincerely,
| ||
Thomas M. Rutledge | Christopher L. Winfrey | |
Executive Chairman | President and Chief Executive Officer |
March 18, 202116, 2023
Charter Communications, Inc. 400 Stamford, CT |
Notice of Annual Meeting of Stockholders
of Charter Communications, Inc.
Date: | Time: | Place: | ||||||||||
April | 6350 S. Fiddler’s Green Circle 2nd Floor (Conference Room C) Greenwood Village, CO 80111 |
How to Vote:
By Mail
By Phone
By Internet
At
| Matters to be voted on:
1. The election of thirteen directors, named in this proxy statement;
2. To hold an advisory vote on executive compensation; 3. To hold an advisory vote on the frequency of holding an advisory vote on executive compensation; 4. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31,
The proxy statement more fully describes these proposals.
All stockholders of record at the close of business on February
By order of the Board of Directors,
Richard R. Dykhouse Corporate Secretary
March |
Questions and Answers about Voting and the Annual Meeting | 1 | |||
Proposal No. 1: Election of Directors | ||||
15 | ||||
Governance | 15 | |||
Board Leadership Structure, Company Strategy and Risk Oversight | 16 | |||
17 | ||||
| 17 | |||
19 | ||||
Compensation Committee Interlocks and Insider Participation | ||||
Report of the Compensation and Benefits Committee | ||||
Compensation Discussion and Analysis | ||||
31 | ||||
Limitation of Directors’ Liability and Indemnification Matters |
Charter Communications, Inc.
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to Be Held on April 27, 2021.25, 2023. The 20212023 notice and proxy statement and the 20202022 annual report to stockholders are available at www.proxyvote.com.
This proxy statement and the Notice of Internet Availability of Proxy Materials were first mailed to stockholders on or about March 18, 2021.16, 2023.
Questions and Answers about Voting and the Annual Meeting
What matters will be voted on at the annual meeting?
As a holder of Class A common stock, you are being asked to vote on the following:
Proposal 1: To elect thirteen directors, nominated by our board of directors and named in this proxy statement;
• | Proposal 1: To elect thirteen directors, nominated by our Board of Directors and named in this proxy statement; |
Proposal 2: To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2021;
• | Proposal 2: To hold an advisory vote on executive compensation; |
Proposal 3: To vote on a stockholder proposal regarding lobbying activities;
• | Proposal 3: To hold an advisory vote on the frequency of holding an advisory vote on executive compensation; |
Proposal 4: To vote on a stockholder proposal regarding Chairman of the Board and CEO roles;
• | Proposal 4: To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2023; |
Proposal 5: To vote on a stockholder proposal regarding diversity and inclusion efforts;
• | Proposal 5: To vote on a stockholder proposal regarding lobbying activities; and |
• | Proposal 6: To vote on any other matters properly brought before the stockholders at the meeting. |
Proposal 6: To vote on a stockholder proposal regarding disclosure of greenhouse gas emissions;
Proposal 7: To vote on a stockholder proposal regarding EEO-1 reports;
Proposal 8: To vote on any other matters properly brought before the stockholders at the meeting.
How does the boardBoard of directorsDirectors recommend that I vote?
The boardBoard of directorsDirectors recommends that you vote:
FOR the election of the thirteen directors, nominated by our board of directors and named in this proxy statement;
• | FOR the election of the thirteen directors, nominated by our Board of Directors and named in this proxy statement; |
FOR the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2021; and
• | FOR the approval, on an advisory basis, of the compensation of our named executive officers; |
• | FOR the approval, on an advisory basis, of a triennial advisory vote on executive compensation; |
AGAINST each of the stockholder proposals.
• | FOR the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2023; and |
• | AGAINST the stockholder proposal. |
What if other matters come up at the annual meeting?
The items listed on the Notice of Annual Meeting of Stockholders are the only matters that we know will be voted on at the annual meeting. Your proxy gives discretionary authority to the persons named on the proxy card to vote on other matters. On such other business as may properly come before the meeting, your shares will be voted in the discretion and judgment of the proxy holder.
Who has been nominated for election as directors at the annual meeting?
The boardBoard of directorsDirectors has nominated thirteen directors for election, all of whom are currently serving on our boardBoard of directors.Directors. The thirteen directors who have been nominated by the boardBoard of directorsDirectors and agreed to serve as directors are Ms. Goodman and Messrs. Conn, Jacobson, Maffei, Markley, Merritt, Meyer, Miron, Newhouse, Nair, Ramos, Rutledge and Zinterhofer.
How can I participate in the annual meeting?
Due to public health and travel concerns caused by the COVID-19 pandemic, this year’s annual meeting will be accessible in a virtual-only meeting format to support the health and safety of our stockholders and employees. We have worked to offer the
Charter Communications | 1 | 20212023 Proxy Statement
same participation opportunities as if you attended the annual meeting in person. To be admitted to the annual meeting at www.virtualshareholdermeeting.com/CHTR2021, you must enter the control number found on your proxy card, voting instruction form or notice you previously received. If you were a beneficial stockholder of Charter Class A common stock as of the Record Date (i.e., you hold your shares through a broker or other intermediary), you may submit your voting instructions only through your broker or other intermediary. Contact your broker or other intermediary if you no longer have your control number to access the meeting, which will also allow you to vote your shares at the meeting or change a prior vote. Although we encourage you to complete and return the proxy card to ensure that your vote is counted, you may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. There will not be guest access to the meeting. Accordingly, if you do not have your control number, you will not be able to attend the meeting. Online check-in will begin at 10:00 a.m. Eastern Daylight Time on April 27, 2021. The annual meeting will begin promptly at 10:30 a.m. Eastern Daylight Time on April 27, 2021. If you encounter difficulties accessing the virtual meeting, please call the technical support number that will be posted on the meeting website noted above for the annual meeting.
Stockholders will have an opportunity to submit written questions to management during the meeting. Rules of Conduct for the meeting as well as any specific requirements for questions will be posted on the website noted above for the annual meeting. Submitted questions should follow the Rules of Conduct in order to be addressed during or after the annual meeting. During the annual meeting, a list of stockholders entitled to vote at the annual meeting will also be available for inspection by stockholders for any legally valid purpose relating to the meeting.
Who can vote at the annual meeting?
As of the close of business on February 26, 202124, 2023 (the “Record Date”), a total of 215,273,098169,115,655 shares of Class A common stock, including Charter Communications Holdings, LLC (“Charter Holdings”) common and preferred units on an as-if-converted or exchangedas-if-exchanged basis, are entitled to be voted by our stockholders at the annual meeting. Each holder of Class A common stock is entitled to one vote per share.share, representing 151,146,796 votes. Advance/Newhouse Partnership (“A/N”) holds one share of our Class B common stock, which is entitled to a number of votes equal to the number of shares of Class A common stock into which the Charter Holdings common and preferredunits held by A/N may be convertedexchanged, or exchanged.17,968,859 votes. The enclosed proxy card indicates the number of Class A shares that our records show you are entitled to vote. There are no other classes of common stock outstanding.
What is the difference between being a stockholder of record and a beneficial owner?
You are a stockholder of record if at the close of business on the Record Date your shares were registered in your name with Computershare Shareowner Services, our transfer agent and registrar.
You are a beneficial owner if at the close of business on the Record Date, your shares were held by a brokerage firm or other nominee and not directly in your name, but are held in “street name.” As the beneficial owner of your shares, you have the right to direct your broker or other nominee how to vote your shares, i.e., for or against the proposals to be considered at the annual meeting. If you do not provide your broker or nominee with instructions on how to vote your shares, your broker or nominee will be able to vote your shares with respect to some of the proposals, but not all. See, “What if I do not provide instructions on how to vote my shares?” below.
What do I do if my shares are held in “street name”?
If your shares are held in the name of your broker or other nominee, you should return your proxy in the envelope provided by your broker or nominee or instruct the person responsible for holding your shares to execute a proxy on your behalf. In either case, your shares will be voted according to your instructions.
What if I do not provide instructions on how to vote my shares?
If you are a stockholder of record and you submit a proxy, but do not provide voting instructions, your shares will be voted for“FOR” the election of each of the Company’s director nominees on proposal 1, “FOR” the Company’sproposals 2 and 4, for “3 Years” on proposal as described above3 and “AGAINST” each of the stockholder proposals.proposal.
If you are a beneficial owner and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or nominee has discretionary authority to vote for certain proposals, but not others pursuant to the rules of NASDAQ and the Securities and Exchange Commission (“SEC”). Brokers and other nominees have the discretion to vote on routine matters such as Proposal 2,proposal 4, but not on non-routine matters such as Proposalsproposals 1, or2, 3 through 7.and 5. Therefore, if
Charter Communications | 2 | 2021 Proxy Statement
you do not provide voting instructions to the broker or nominee that holds your shares, the broker or nominee may only vote for Proposal 2proposal 4 and any other routine matters properly presented for a vote at the annual meeting.
What is the quorum required for the meeting?
We will hold the annual meeting if holders of shares having a majority of the voting power of Charter’s capital stock as of the Record Date either sign and return their proxy cards, vote via the Internet or attend the meeting. If you sign and return your proxy card or vote via the Internet, your shares will be counted to determine whether we have a quorum, even if you fail to indicate your vote.
Abstentions and broker “non-votes” will be counted as present for purposes of determining whether a quorum exists at the annual meeting.
How are broker non-votes and abstentions treated?
If an executed proxy is returned by a broker holding shares in street name that indicates that the broker does not have discretionary authority as to certain shares to vote on one or more matters (a broker non-vote), such shares will be considered present at the meeting for purposes of determining a quorum on all matters, but will not be considered to be votes cast with respect to such matters.
Charter Communications | 2 | 2023 Proxy Statement
A stockholder may vote to “abstain” on any of the proposals. If you vote to “abstain,”“abstain” on any matter, your shares will be counted as present at the meeting for purposes of determining a quorum on all matters, but will not be considered to be votes cast with respect to such matters.matter. Only “FOR” and “AGAINST” votes are counted for purposes of determining the votes cast in connection with each proposal.proposal other than proposal 3, and only “3 Years,” “2 Years” and “1 Year” votes are counted for purposes of determining the votes cast in connection with proposal 3.
With respect to each of the proposals, broker non-votes and abstentions will have no effect on determining whether the affirmative vote constitutes a majority of the shares present or represented by proxy and voting at the annual meeting. In addition, because they do not count as votes cast, assuming a quorum is present, abstentions from voting, broker non-votes or a stockholder’s other failure to vote will have no effect on the applicable proposal.
In order to minimize the number of broker non-votes, the Company encourages you to vote or to provide voting instructions to the organization that holds your shares by carefully following the instructions provided in the Notice of Internet Availability of Proxy Materials.
What is the vote required for the proposals on the agenda?
The affirmative vote of the holders of a majority of the votes cast is required for approval of the matters in Proposalsproposals 1 through 7.5. With respect to proposal 3, the Board expects to be guided by the voting option that receives the greatest number of votes, even if that alternative does not receive a majority. Abstentions and broker non-votes are not considered votes cast. Accordingly, assuming a quorum is present, abstentions, broker non-votes and a stockholder’s other failure to vote will have no effect on the outcome of the applicable proposal.
What are my choices in the proposalsfor each proposal on the agenda?
On Proposalproposal 1, for each of the director nominees you can vote your shares “FOR” a nominee or “AGAINST” a nominee, or you can abstain from voting. On Proposalsproposals 2, through 74 and 5 you can vote “FOR” a proposal voteor “AGAINST” a proposal, or you can abstain from voting. On proposal 3, you can vote for “3 Years,” “2 Years” or “1 Year,” or you can abstain from voting.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card. Sign and date the proxy card and mail it back to us in the enclosed envelope. If you receive more than one proxy card it may mean that you hold shares in more than one account. Sign and return all proxy cards to ensure that all of your shares are voted. The proxy holder named on the proxy card will vote your shares as you instruct. If you sign and return the proxy card but do not indicate your vote, the proxy holder will vote on your behalf “FOR” each of the director nominees on proposal 1, “FOR” proposals 2 and the Company4, for “3 Years” on proposal as noted above3 and “AGAINST” each of the stockholder proposalsproposal and will also have discretionary authority to vote your shares on any other matter that is properly brought before the annual meeting. Stockholders may also vote their proxy by using the toll free number listed on the proxy card and following the instructions.
Charter Communications | 3 | 2021 Proxy Statement
Can I vote via the Internet?
Stockholders with shares registered in their names with Computershare Shareowner Services, our transfer agent, may authorize a proxy via the Internet at the following address: www.proxyvote.com. A number of brokerage firms and banks participate in a program that permits Internet voting. If your shares are held in an account at a brokerage firm or bank that participates in such a program, you may direct the vote of those shares by following the instructions on the voting form enclosed with the proxy from the brokerage firm or bank.
Proxies submitted via the Internet must be received by 11:59 p.m. (EDT) on April 26, 2021.24, 2023. Please refer to your voting instruction form and/or your proxy card for specific voting instructions. If you vote this year’s proxy via the Internet, you may also elect to receive future proxy and other materials electronically by following the instructions when you vote. Making this election will save the Company the cost of producing and mailing these documents.
Can I change my vote after I return my proxy card?
Yes. At any time before the vote at the annual meeting, you can change your vote either by giving our Corporate Secretary a written notice revoking your proxy card, or by signing, dating and submitting a new later-dated proxy card via the Internet, by
Charter Communications | 3 | 2023 Proxy Statement
telephone or by mail. We will honor the latest dated proxy card which has been received prior to the closing of the voting. You may also attend the meeting and vote by following the instructions available on the meeting website during the meeting.in person. If you wish to attend the annual meeting and vote your shares in person and you are the beneficial owner of your shares, you must obtain the documents required to vote your shares in person at the annual meeting from your broker or nominee. See, “How can I participate in the annual meeting?”.
Is my vote confidential?
We will maintain the confidentiality of proxy cards and other votes that identify individual stockholders unless disclosure is required by law.
Who will count the votes?
Broadridge Financial Solutions, Inc. has been appointed to receive and tabulate stockholder votes and to act as the inspector of election and certify to the election results.
Who is soliciting my vote?
The boardBoard of directorsDirectors is soliciting your vote. In addition, we retained Innisfree M&A Incorporated, a proxy solicitation firm, to solicit proxies in connection with our 20212023 annual meeting of stockholders at a total cost of approximately $20,000 plus expenses. Charter expects to solicit proxies primarily by mail, but directors, officers and other employees of Charter may also solicit in person or by internet, telephone or mail. Contact information for the proxy solicitor appears below.
Proxy Solicitor
Charter stockholders who need assistance in voting their shares or need a copy of this proxy statement should contact:
Innisfree M&A Incorporated
501 Madison Avenue, 20th20th Floor
New York City, New York 10022
Stockholders may call toll free: (888) 750-5834
Banks and brokers may call collect: (212) 750-5833
Who pays for this proxy solicitation?
The Company pays for the proxy solicitation. We will ask banks, brokers and other nominees and fiduciaries to forward the proxy material to the beneficial owners of the Class A common stock and to obtain the authority of executed proxies. We will reimburse them for their reasonable expenses.
Charter Communications | 4 | 2021 Proxy Statement
Where can I find the voting results of the annual meeting?
We will report the voting results on a Current Report on Form 8-K that we will file with the Securities and Exchange CommissionSEC within four business days after the date of the meeting and that we will post on our website promptly after it is filed.
Charter Communications | 54 | 20212023 Proxy Statement
Proposal No. 1: Election of Directors
(Item 1 on Proxy Card)
The size of our boardBoard of directorsDirectors is thirteen, and we currently have thirteen members standing as nominees for election. Proxies cannot be voted for a greater number of persons than the number of nominees named. As set forth in more detail below, the Nominating and Corporate Governance Committee of the boardBoard of directors hasDirectors and the Board of Directors have determined that a majoritytwelve of theour thirteen current directors are independent.independent pursuant to NASDAQ rules.
Each of our directors is elected on an annual basis. The boardBoard of directorsDirectors is soliciting your vote for the directors to be elected at the annual meeting of stockholders. Once elected, each of the directors will hold office until his or her successor is elected, or he or she resigns or is otherwise removed.
In connection with Mr. Rutledge’s transition to the role of Executive Chairman of the Company and the Board of Directors (“Executive Chairman”) and Mr. Winfrey’s appointment as President and Chief Executive Officer effective December 1, 2022, Mr. Rutledge agreed to serve as Executive Chairman through November 30, 2023, at which time he will step down from his position as the Executive Chairman of the Company and the Board, and Mr. Winfrey will be appointed to the Board of Directors on or before December 31, 2023.
Under the Second Amended and Restated Stockholders Agreement, dated May 23, 2015, among Charter, Liberty Broadband Corporation (“Liberty Broadband”), A/N and the former Charter Communications, Inc. (the “Stockholders Agreement”), and Charter’s amended and restated certificate of incorporation, the number of Charter’s directors is fixed at thirteen. Pursuant to the Stockholders Agreement, Mr. Rutledge was also offered and accepted the role of Chairman and Chief Executive Officer (“CEO”) of the Company. Under the Stockholders Agreement, Liberty Broadband currently has the right to designate three directors as nominees for Charter’s boardBoard of directorsDirectors and A/N currently has the right to designate two directors as nominees for Charter’s boardBoard of directors.Directors. Of our current directors, Messrs. Maffei, Meyer and Nair were designated by Liberty Broadband and Messrs. Miron and Newhouse were designated by A/N.
THE BOARD OF DIRECTORS RECOMMENDS VOTING “FOR” THE DIRECTOR NOMINEES.
Information about the Director Nominees
The following information concerns the thirteen individuals who have been nominated by the boardBoard of directorsDirectors for election by the stockholders. Each of the following individuals currently serves as a director.
Directors | Position(s) | |
Thomas M. Rutledge | ||
Eric L. Zinterhofer | Lead Independent Director | |
W. Lance Conn | Director | |
Kim C. Goodman | Director | |
Craig A. Jacobson | Director | |
Gregory B. Maffei | Director | |
John D. Markley, Jr. | Director | |
David C. Merritt | Director | |
James E. Meyer | Director | |
Steven A. Miron | Director | |
Balan Nair | Director | |
Michael A. Newhouse | Director | |
Mauricio Ramos | Director |
Charter Communications | 65 | 20212023 Proxy Statement
Thomas M. Rutledge Executive Chairman Committees: None
|
Biographical Information:
Mr. Rutledge has been the Executive Chairman of the |
Skills and Qualifications:
Mr. Rutledge’s qualifications to sit on Charter’s
|
Eric L. Zinterhofer Lead Independent Director Age: Committees: Compensation and Benefits, Nominating and Corporate Governance,
|
Biographical Information:
Mr. Zinterhofer has been the Lead Independent Director of Charter’s |
Skills and Qualifications:
Mr. Zinterhofer’s qualifications to sit on Charter’s
|
Charter Communications | 76 | 20212023 Proxy Statement
W. Lance Conn Independent Director Age: Committees: Compensation and Benefits (Chair),
|
Biographical Information:
|
Skills and Qualifications:
Mr. Conn’s qualifications to sit on Charter’s
|
Kim C. Goodman Independent Director Age: Committees: Audit
|
Biographical Information:
Ms. Goodman |
Skills and Qualifications:
Ms. Goodman’s qualifications to sit on Charter’s
|
Charter Communications | 87 | 20212023 Proxy Statement
Craig A. Jacobson Independent Director Age: Committees: Nominating and Corporate Governance
|
Biographical Information:
Mr. Jacobson is a founding partner at the law firm of Hansen, Jacobson, Teller, Hoberman, Newman, Warren, Richman, Rush, Kaller, Gellman, Meigs & |
Skills and Qualifications:
Mr. Jacobson’s qualifications to sit on Charter’s
|
Gregory B. Maffei Independent Director Age: Committees: Compensation and Benefits, Finance
|
Biographical Information:
Mr. Maffei has served as the President and Chief Executive Officer and a director of Liberty Media Corporation (including its predecessor, Liberty Media) since May 2007, Liberty Broadband Corporation (Liberty Broadband) since June 2014 and Liberty Media Acquisition Corporation since November 2020. He has served as Chairman of the Board of Liberty TripAdvisor Holdings, Inc. since June 2015 and as a director and the President and Chief Executive Officer since July 2013. He has served as the Chairman of the Board of Qurate Retail, Inc. (formerly named Liberty |
Skills and Qualifications:
Mr. Maffei’s qualifications to sit on Charter’s
|
Charter Communications | 98 | 20212023 Proxy Statement
John D. Markley, Jr. Independent Director Age: Committees: Nominating and Governance (Chair), Audit
|
Biographical Information:
Mr. Markley is Managing Director of Bear Creek Capital, an investment firm focused on public and private companies in the communications, media and technology industries. Mr. Markley also is a partner at New Amsterdam Growth Capital. From 1996 to 2009, Mr. Markley was a partner at Columbia Capital, a venture capital firm, where he served on the board of numerous private companies. Mr. Markley is a director of Interdigital, Inc. where he serves as the Chair of its governance committee and member of its |
Skills and Qualifications:
Mr. Markley’s qualifications to sit on Charter’s
|
David C. Merritt Independent Director Age: Committees: Audit (Chair), Finance
|
Biographical Information:
Mr. Merritt is a private investor and consultant. From March 2009 to December 2013, he served as the president of BC Partners, Inc., a financial advisory firm. From October 2007 to March 2009, Mr. Merritt served as Senior Vice President and Chief Financial Officer of iCRETE, LLC. From 1985 to 1999, Mr. Merritt was an audit and consulting partner of KPMG serving in a variety of capacities during his years with the firm, including national partner in charge of the media and entertainment practice. Mr. Merritt sits on the board of directors and Audit Committee of Taylor Morrison Home Corporation. Mr. Merritt previously served as a director and as the Chairman of the Audit Committee of Calpine Corporation until March 2018. He was also a director of Buffet Restaurants Holdings, Inc. until August 2015 and he served as a director of Outdoor Holdings, Inc. until May 2013. Mr. Merritt holds a B.S. degree in Business and Accounting from California State University — Northridge. |
Skills and Qualifications:
Mr. Merritt’s qualifications to sit on Charter’s
|
Charter Communications | 109 | 20212023 Proxy Statement
James E. Meyer Independent Director Age: Committees: Nominating and Corporate Governance
|
Biographical Information:
Mr. Meyer served as Chief Executive Officer of Sirius XM Holdings Inc. (“Sirius XM”), an audio entertainment provider, from December 2012 until his retirement on December 31, 2020. Mr. Meyer has been a director of Sirius XM since 2013 and is currently serving as Vice Chairman of the Sirius XM board. Previously, Mr. Meyer was the President, Operations and Sales, of Sirius XM. Prior to joining Sirius XM in May 2004, Mr. Meyer was the President of Aegis Ventures, a general management consulting company. Before Aegis, he held a number of senior management positions in consumer electronics over a 25 year period, including as the Senior Executive Vice President of Digital Media Solutions of Thomson, a worldwide leader in consumer electronics. Prior to joining Thomson, Mr. Meyer held senior management positions at General Electric and RCA. Mr. Meyer served as Chairman of the Board of Directors and a director of TiVo Corporation (and Rovi Corporation prior to its merger with TiVo Corporation) until 2020 and served as a director of Pandora Media, Inc. until 2019. Mr. Meyer holds an M.B.A. and an undergraduate degree in economics, both from St. Bonaventure University. |
Skills and Qualifications:
Mr. Meyer’s qualifications to sit on Charter’s
|
Steven A. Miron Independent Director Age: Committees: Compensation and Benefits
|
Biographical Information:
Mr. Miron is the Chief Executive Officer of Advance/Newhouse Partnership, a |
Skills and Qualifications:
Mr. Miron’s qualifications to sit on Charter’s
|
Charter Communications | 1110 | 20212023 Proxy Statement
Balan Nair Independent Director Age: Committees: None
|
Biographical Information:
Mr. Nair is President and Chief Executive Officer and a director of Liberty Latin America, Ltd., an integrated telecommunications company focused on the Caribbean Islands and Latin America. Mr. Nair is an experienced and proven business executive with more than 20 years in the telecommunications industry. He has been a part of the Liberty family of companies since 2007, when he joined Liberty Global as its Senior Vice President and Chief Technology Officer. He most recently served as Executive Vice President and Chief Technology and Innovation Officer. In this role, he was responsible for overseeing Liberty Global’s worldwide network, as well as Technology and Innovation operations, including Product Development, IT, Network Operations, Mobile Operations and Global Supply Chain functions. He was also responsible for Corporate Strategy and Venture investments. Mr. Nair was an executive officer of Liberty Global and sat on Liberty Global’s Executive Leadership Team and the Investment Committee. Prior to joining Liberty Global, from December 2006 to June 2007, Mr. Nair served as Chief Technology Officer and Executive Vice President for AOL LLC, a global web services company. Prior to his role at AOL, he spent more than 12 years at Qwest Communications International Inc., most recently as Chief Information Officer and Chief Technology Officer. Mr. Nair sits on the board of directors and compensation committee of Adtran Corporation. Mr. Nair previously served as a director of Telenet Group Holding, N.V., which trades on EN Brussels. He holds a patent in systems development and is a Licensed Professional Engineer in Colorado. Mr. Nair holds an M.B.A. and a B.S. in electrical engineering, both from Iowa State University. |
Skills and Qualifications:
Mr. Nair’s qualifications to sit on Charter’s
|
Michael A. Newhouse Independent Director Age: Committees: Nominating and Corporate Governance, Finance
|
Biographical Information:
Mr. Newhouse is a co-president at Advance, a private, family-held business that owns and invests in companies across media, entertainment, technology, communications, education and other promising growth sectors. Advance’s portfolio includes Condé Nast, which produces high quality content in a variety of media formats, including print, digital and video, for global audiences; Advance Local, |
Skills and Qualifications:
Mr. Newhouse’s qualifications to sit on Charter’s
|
Charter Communications | 1211 | 20212023 Proxy Statement
Mauricio Ramos Independent Director Age: Committees: Compensation and Benefits
|
Mr. Ramos has been the Chief Executive Officer of Millicom International Cellular S.A. (“Millicom”), a Luxembourg public liability company traded on the Stockholm and U.S. NASDAQ stock exchange since April 2015 and was elected as an Executive Director in June 2020. Millicom is a leading telecommunications and media company dedicated to emerging markets in Latin America and Africa. Before joining Millicom, he was President of Liberty Global’s Latin American division, a position he held from 2006 until February 2015. During his career at Liberty Global, Mr. Ramos held several leadership roles, including positions as Chairman and CEO of VTR in Chile and President of Liberty Puerto Rico. Throughout this period he has successfully developed both mobile and broadband businesses in Latin America, delivering solid operational improvement and outstanding financial results. In 2021 Mr. Ramos |
Skills and Qualifications:
Mr. Ramos’ qualifications to sit on Charter’s
|
Board of Directors and Committees of the Board of Directors
Our boardBoard of directorsDirectors meets regularly throughout the year on an established schedule. The boardBoard also holds special meetings and executive sessions and acts by written consent from time to time as necessary. The Company held an annual stockholders’ meeting in 2020,2022, which all of the directors attended. Members of the boardBoard of directorsDirectors are encouraged to attend the annual meeting each year. In 2020,2022, the full boardBoard of directorsDirectors held thirteensixteen meetings and acted twothree times by unanimous written consent. All directors attended 75% or more of the aggregate meetings of the boardBoard and of the boardBoard committees on which they served during 2020.2022.
The boardBoard of directorsDirectors delegates authority to act with respect to certain matters to boardBoard committees whose members are appointed by the boardBoard of directors.Directors. The current standing committees of the boardBoard of directorsDirectors are the following: Audit Committee, Compensation and Benefits Committee, Nominating and Corporate Governance Committee, Section 162(m) Committee and Finance Committee. The Audit, Compensation and Benefits, Nominating and Governance and Finance Committees each have a charter that is available on the “Investor Relations” section of our website at ir.charter.com.ir.charter.com.
Charter’s Audit Committee is responsible for overseeing the Company’s accounting and financial reporting processes and the audits of the Company’s financial statements, reviewing the work of the independent registered public accounting firm (including resolution of disagreements between management and the public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services and reviewing our risk management program. During 2020,2022, the Audit Committee members consisted of Messrs. Merritt and Markley and Ms. Goodman. Mr. Merritt is Chairman of the Audit Committee. Charter’s boardBoard of directorsDirectors has determined that, in its judgment, Mr. Merritt is an audit committee financial expert within the meaning of the applicable federal regulations. All members of the Audit Committee were determined by the boardBoard of directorsDirectors in 20202022 to be independent in accordance with the listing standards of NASDAQ and Rule 10A-3 of the Securities Exchange Act of 1934, as amended.amended (the “Exchange Act”). The Audit Committee met four times in 2020.2022.
The Compensation and Benefits Committee reviews and approves the compensation of the senior management of the Company. During 2020,2022, Messrs. Conn, Maffei, Miron, Ramos and Zinterhofer served on the Compensation and Benefits Committee. Mr. Conn served as the Chairman of the Compensation and Benefits Committee during 2020.2022. All members of the Compensation and Benefits Committee were determined by the boardBoard of directorsDirectors in 20202022 to be independent in accordance with the listing standards of NASDAQ and Rule 10C of the Securities Exchange Act of 1934, as amended.Act. The Compensation and Benefits Committee met sevensix times and acted two times by unanimous written consent during 2020.2022.
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The Nominating and Corporate Governance Committee oversees corporate governance, including recommending boardBoard and committee nominations, overseeing the Corporate Governance Guidelines, reviewing and reporting to the boardBoard as to director
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independence and overseeing environmental, social and governance matters. The Nominating and Corporate Governance Committee considers director candidates proposed by stockholders if adequate information is submitted in a timely manner (see “Nomination and Qualifications of Directors” below). During 2020,2022, Messrs. Markley, Jacobson, Meyer, Jacobson, Newhouse and Zinterhofer served on the Nominating and Corporate Governance Committee. Mr. Markley is the Chairman of the Nominating and Corporate Governance Committee. All members of the Nominating and Corporate Governance Committee were determined by the boardBoard in 20202022 to be independent in accordance with the listing standards of NASDAQ. The Nominating and Corporate Governance Committee considers candidates proposed by stockholders if adequate information is submitted in a timely manner (see “Nomination and Qualifications of Directors” below). The Nominating and Corporate Governance Committee met four times in 2020.
The Section 162(m) Committee reviews the Company’s compensation for purposes of qualifying as performance-related compensation and thus meeting the provisions under Internal Revenue Code Section 162(m) for deductibility. In 2020, the Section 162(m) Committee was comprised of Messrs. Conn and Zinterhofer. In 2020, this committee acted four times by unanimous written consent.2022.
The Finance Committee reviews the Company’s financing activities and approves the terms and conditions of certain financing transactions, in consultation with the Company’s legal and financial advisors. During 2020,2022, Messrs. Conn, Maffei, Merritt, Newhouse and Zinterhofer served on the Finance Committee. The Finance Committee met once and acted eight times by unanimous written consent during 2020.
In addition to the standing committees described above, from time to time, the boardBoard of directorsDirectors may create “ad hoc” committees for specific projects or transactions. Ad hoc committees acted by written consent during 2022 related to the Company’s stock buyback arrangements with each of A/N and Liberty Broadband.
The Company’s Nominating and Corporate Governance Committee of the board of directors and the boardBoard of directorsDirectors have determined that a majority of the thirteen current directors are independent. The Nominating and Corporate Governance Committee and the boardBoard of directorsDirectors have specifically determined that Ms. Goodman and Messrs. Conn, Jacobson, Markley, Merritt, Ramos and Zinterhofer are independent directors under NASDAQ rules. The Nominating and Corporate Governance Committee and the boardBoard of directorsDirectors also determined that Messrs. Maffei, Meyer and Nair are independent under the NASDAQ rules; however, due to their statusdesignation as nominees by, or relationship with, Liberty Broadband, a stockholder of the Company, they wouldmay not be considered independent under SEC rules for Audit Committee membership purposes. Similarly, the Nominating and Corporate Governance Committee and the boardBoard of directorsDirectors determined that Messrs. Miron and Newhouse are independent under the NASDAQ rules; however, due to their statusdesignation as nominees by, or relationship with, A/N, a stockholder of the Company, they wouldmay not be considered independent under SEC rules for Audit Committee membership purposes. The Nominating and Corporate Governance Committee and the boardBoard of directorsDirectors further determined that Messrs. Maffei, Meyer, Miron, Nair and Newhouse’s statusdesignation as nominees by, or relationship with, a stockholder of the Company does not prohibit a finding of independence under SEC rules and NASDAQ Rule 5605(d)(2) for Compensation and Benefits Committee membership purposes. Mr. Rutledge is the Executive Chairman and CEO of the Company and is thus not independent.independent for NASDAQ Rule purposes as an executive officer of the Company.
Nomination and Qualifications of Directors
Candidates for director are nominated by the boardBoard of directors,Directors, based on the recommendation of the Nominating and Corporate Governance Committee and subject to certain requirements under the Stockholders Agreement. Charter’s Corporate Governance Guidelines provide that, among other things, candidates for new boardBoard membership to be considered by Charter’s boardBoard of directorsDirectors should be individuals from diverse business and professional backgrounds with unquestioned high ethical standards and professional achievement, knowledge and experience. The Corporate Governance Guidelines provide that a candidate’s contribution of diversity to the boardBoard of directorsDirectors (based on common factors associated with diversity such as gender, race/ethnicity and other background characteristics that enhance the diversity of the board)Board) will be one of the many elements to be considered in evaluating candidates. Further, the boardBoard of directorsDirectors and the Nominating and Corporate Governance Committee believe that it is important that boardBoard members represent diverse viewpoints. In considering candidates for the boardBoard of directors,Directors, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards. In addition, director candidates must be individuals with the time and commitment necessary to perform the duties of a boardBoard member and other special skills that complement or supplement the skill sets of current directors.
We believe that the boardBoard of directorsDirectors is comprised of an effective mix of experience, backgrounds, knowledge, and skills, including the following:
• | Nine directors have experience and demonstrated expertise in managing large, complex organizations, such as serving as CEOs or next-level executives of a significant company or organization; |
Nine directors have experience and demonstrated expertise in managing large, complex organizations, such as serving as CEOs or next-level executives of a significant company or organization;
• | Four directors have significant financial, accounting or other risk management expertise; |
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Four directors have significant financial, accounting or other risk management expertise;
• | Two directors have significant technology and product development experience; and |
Two directors have significant technology and product development experience; and
Eleven directors have experience on one or more boards of other significant public or nonprofit organizations.
• | Eleven directors have experience on one or more boards of other significant public or nonprofit organizations. |
In addition, we believe that all of our directors have the following attributes that positively contribute to our boardBoard of directors:Directors:
Experience with video, internet, telephone, wireless or media businesses;
• | Experience with video, internet, telephone, wireless or media businesses; |
Experience with significant transactions, including financings, investments and acquisitions;
• | Experience with significant transactions, including financings, investments and acquisitions; |
Judgment, skill, integrity and reputation; and
• | Judgment, skill, integrity and reputation; and |
• | Diversity of life experiences and backgrounds, as well as gender and ethnic diversity. |
Diversity of life experiences and backgrounds, as well as gender and ethnic diversity.
In January 2016, Charter entered into a memorandum of understanding (the “MOU”) with leaders of several leading national civic organizations that took effect upon the closing of the Transactions (as defined below). The MOU identifies specific diversity initiatives and establishes a plan of action to guide the collaborative efforts of the Company and a wide array of diverse civic and leadership organizations. As part of the MOU, Charter committed to a number of concrete actions, including appointing at least oneAt this time, our Board includes an African American onewoman, an Asian American/Pacific Islander and onea Latino AmericanAmerican. In 2022, the Nominating and Corporate Governance Committee continued to develop its newly formedpipe-line of potential diverse director candidates in the event an opening occurs on the Board of Directors, with the expectation and plan that the next opening would be filled by a woman candidate with the exception of a Liberty Broadband or A/N nominee or the Company’s Chief Executive Officer.
In recent years, some investors have expressed concerns about the number of outside public company boards that certain highly sought-after directors serve on. The Nominating and Corporate Governance Committee considers all aspects of each director’s contributions, skills and dedication to ensure that each remains an effective director for the Company. The Board realizes that Mr. Maffei, a director on the board and President and Chief Executive Officer of directors within two yearsLiberty Broadband, also sits on the boards of several other companies in which Liberty Broadband has an investment or a management relationship, as well as the closeboards of other companies, as more fully discussed in his biographical information above. The Nominating and Corporate Governance Committee has thoroughly evaluated Mr. Maffei’s role in and contributions to the Transactions. Charter has met this commitment.Board, including the significant time and attention he dedicates to the Company, his outside board commitments (which primarily relate to his role with Liberty Broadband and affiliated companies), the overlaps between his service on outside boards and our Board, and Mr. Maffei’s considerable knowledge and experience in the industry. The Nominating and Corporate Governance Committee concluded that Mr. Maffei’s service on outside boards improves, rather than detracts from, his service on the Company’s Board and firmly believes that he will continue to provide the Company with the necessary time and attention to make him an effective director.
Stockholders may nominate persons to be directors by following the procedures set forth in our Bylaws. These procedures require the stockholder to deliver timely notice to the Corporate Secretary at our principal executive offices. That notice must contain the information required by the Bylaws about the stockholder proposing the nominee and about the nominee. No stockholder nominees have been proposed for this year’s meeting.
Stockholders also are free to suggest persons directly to the boardBoard of directorsDirectors for the Board to consider as nominees. The boardBoard of directorsDirectors will consider those individuals if adequate information is submitted in a timely manner (see “Stockholder Proposals for 20222024 Annual Meeting” below for deadline requirements) in writing to the boardBoard of directorsDirectors at the Company’s principal executive offices, in care of the General Counsel.
In July 2018, Dr. John C. Malone retired from the boardBoard of directors,Directors, but continues to serve as a director emeritus. As a director emeritus, Dr. Malone continues to attend board of directorBoard meetings, but does not have a vote on matters presented. Dr. Malone previously served on the boardBoard of directorsDirectors as a designee of Liberty Broadband under the terms of the Stockholders Agreement.
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Board Diversity Matrix
The table below provides certain information with respect to the composition of Charter’s Board of Directors. Each of the categories listed in the table has the meaning ascribed to it in NASDAQ Listing Rule 5605(f).
Board Diversity Matrix (as of January 24, 2023) |
| |||||||||||||||
Total Number of Directors: | 13 | |||||||||||||||
Female | Male | Non-Binary | | Did Not Disclose Gender | | |||||||||||
Part I: Gender Identity |
| |||||||||||||||
Directors | 1 | 12 | ||||||||||||||
Part II: Demographic Background |
| |||||||||||||||
African American or Black | 1 | |||||||||||||||
Alaskan Native or Native American | ||||||||||||||||
Asian | 1 | |||||||||||||||
Hispanic or Latinx | 1 | |||||||||||||||
Native Hawaiian or Pacific Islander | ||||||||||||||||
White | 10 | |||||||||||||||
Two or More Races or Ethnicities | ||||||||||||||||
LGBTQ | 0 | |||||||||||||||
Did Not Disclose Demographic Background | 0 |
Governance Impacts of TWC and Bright House TransactionsUnder the Stockholders Agreement
On May 23, 2015, the Company entered into an Agreement and Plan of Mergers (the “Merger Agreement”) with the company formerly known as Charter Communications, Inc. (“Legacy Charter”), Time Warner Cable Inc. (“Legacy TWC”), and certain other subsidiary entities, pursuant to which the parties engaged in a series of transactions that resulted in Legacy Charter and Legacy TWC becoming wholly owned subsidiaries of Charter (the “TWC Transaction”), on the terms and subject to the conditions set forth in the Merger Agreement. After giving effect to the TWC Transaction, Charter became the new public company parent that holds the operations of the combined companies.
On March 31, 2015, the Company entered into a definitive Contribution Agreement (the “Contribution Agreement”), which was amended on May 23, 2015 in connection with the execution of the Merger Agreement, with A/N, A/NPC Holdings LLC, Legacy Charter and Charter Communications Holdings, LLC (“Charter Holdings”), pursuant to which the Company became the owner of the membership interests in Bright House Networks, LLC (“Bright House”) and any other assets (other than certain excluded assets and liabilities and non-operating cash) primarily related to Bright House (the “Bright House Transaction,” and together with the TWC Transaction, the “Transactions”).
In connection with the Transactions, on May 23, 2015, Charter entered into the Amended and Restated Stockholders Agreement with Liberty Broadband Corporation (“Liberty Broadband”), A/N and Legacy Charter and the Charter Holdings Limited Liability Operating Agreement (“LLC Agreement”) with Liberty Broadband and A/N.on May 23, 2015. Under the Stockholders Agreement, Liberty Broadband has designated Messrs. Maffei, Meyer and Nair as director nominees and A/N has designated Messrs. Miron and Newhouse as director nominees.
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Under the terms of the Stockholders Agreement and Charter’s amended and restated certificate of incorporation, the number of Charter’s directors is fixed at thirteen. Pursuant to the Stockholders Agreement, Mr. Rutledge was also offered and accepted the role of Chairman and CEO of the Company. Two designees selected by A/N are members of the boardBoard of directorsDirectors of Charter and three designees selected by Liberty Broadband are members of the boardBoard of directorsDirectors of Charter. The remaining eight directors are not affiliated withdesignated by either A/N or Liberty Broadband. Each of A/N and Liberty Broadband is entitled to designate at least one director to each of the committees of Charter’s boardBoard of directors,Directors, subject to applicable stock exchange listing rules and certain specified voting or equity ownership thresholds for each of A/N and Liberty Broadband, and provided that the Nominating and Corporate Governance Committee and the Compensation and BenefitBenefits Committee each have at least a majority of directors independent from A/N, Liberty Broadband and the Company (referred to as the “unaffiliated directors”).Company. Each of the Nominating and Corporate Governance Committee and the Compensation and Benefits Committee is currently comprised of three unaffiliated directors not
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designated by either A/N or Liberty Broadband and one designee of each of A/N and Liberty Broadband. Neither A/N nor Liberty Broadband has designated a director to serve on the Audit Committee, that meets applicable stock exchange listing rules, but each has designated a director to serve in an observer role on the Audit Committee. A/N and Liberty Broadband also have certain other committee designation and other governance rights. Upon the closing of the Transactions, Mr. Rutledge, the Company’s CEO, became the Chairman of the board of Charter.
Under the Stockholders Agreement, Liberty Broadband and A/N are required to vote (subject to the applicable voting cap) their respective shares of Charter Class A common stock and Charter Class B common stock for the director nominees nominated by the nominatingNominating and corporate governance committeeCorporate Governance Committee of the boardBoard of directors,Directors, including the respective designees of Liberty Broadband and A/N, and against any other nominees, except that, with respect to the unaffiliated directors not designated by either A/N or Liberty Broadband, Liberty Broadband and A/N must instead vote in the same proportion as the voting securities are voted by stockholders other than A/N and Liberty Broadband or any group which includes any of them are voted, if doing so would cause a different outcome with respect to the unaffiliatedany such directors.
Board Leadership Structure, Company Strategy and Risk Oversight
Mr. Rutledge is the Executive Chairman of the board of directors and Mr. Zinterhofer is the Lead Independent Director. AlthoughMr. Winfrey, the Company previously separated the roles of CEO and Chairman of the board, in connection with the negotiation of the Transactions, the Company determined that it was in the best interest of the combined company to combine the roles. The ChairmanPresident and CEO, is responsible for setting the strategic direction for the Company in consultation and with the necessary approvals of the Board of Directors, and is responsible for the day to day leadership and performance of the Company, while theCompany.
The Lead Independent Director consults with the Executive Chairman, and CEO and presides over meetings of the boardBoard of directorsDirectors when the Executive Chairman and CEO is not present as well as providingand executive sessions of independent directors, and provides leadership for the non- A/non-A/N and non- Libertynon-Liberty Broadband directors. The Lead Independent Director serves as a liaison between the independent directors and the Executive Chairman and the President and CEO and has authority to call meetings of the independent directors. The Lead Independent Director leads the Board’s annual evaluation of the Executive Chairman and the President and CEO’s performance. If requested, the Lead Independent Director is available for consultation and direct communication with major stockholders and regulators under appropriate circumstances. The Lead Independent Director also monitors and coordinates with management on corporate governance issues and developments.
Every year, the Nominating and Corporate Governance Committee reviews and makes a recommendation on the appropriate governance framework for boardBoard leadership. The Committee takes into consideration governance best practices and the facts and circumstances of our board.Board. In connection with this process, the Company determined that boardBoard leadership is best provided through the combination of a unifiedan Executive Chairman, and CEO, a clearly defined and significant lead independent directorLead Independent Director role, active and strong committee chairs, and independent-minded, skilled, engaged, diverse and committed directors. The boardBoard believes that its current structure and governance allows it to provide effective challenge and oversight of management.
The Board regularly discusses with management the Company’s competitive positioning, strategic dynamics and business priorities. We are a leading broadband connectivity company and cable operator serving more than 3132 million customers in 41 states through our Spectrum brand. Over an advanced high-capacity, two-way telecommunicationscommunications network, we offer a full range of state-of-the-art residential and business services including Spectrum Internet®, TV, Mobile and Voice. For small and medium-sized companies, Spectrum Business® delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise™ provides highly customized, fiber-based solutions. Spectrum Reach® delivers tailored advertising and production for the modern media landscape. We also distribute award-winning news coverage sports and high-quality originalsports programming to our customers through Spectrum Networks and Spectrum Originals.Networks.
The Board discusses and advises management with respect to the Company’s strategies to effectively operate within each of our service areas. These discussions support our core strategy, which is to usefocuses on the evolution of our network, to deliverexpansion of our footprint, and the execution of high quality productsoperations, including customer service. It allows us to maintain a state-of-the-art network delivering the most compelling converged connectivity services in a capital and time-efficient manner, and in turn, offer advanced services to consumers at competitivehighly attractive prices, combinedtogether with outstanding customer service. This strategy, combined with simple, easy to understand pricing and packaging, is central to our goal of growing our customer base while selling more of our core connectivity services, which include both fixed and mobile Internet, video and voice services, to each individual customer. We execute this strategy
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by managing our operations in a consumer-friendly, efficient and cost-effective manner. Our operating strategy includes insourcing nearly all of our customer care and field operations workforces, which results in higher quality service delivery. While an insourced operating model can increase the field operations and customer care costs associated with individual service transactions, the higher quality nature of insourced labor service transactions significantly reduces the volume of service transactions per customer, more than offsetting the higher investment made in each insourced service transaction. As we reduce the number of service transactions and recurring costs per customer relationship, we continue to provide our customers with products and prices that we believe provide more value than what our competitors offer. The combination of offeringOffering high quality, competitively priced products and outstanding service allows us to increase both increase the number of customers we serve over our fully deployed network and to increase the number of products we sell to each customer. This combination also reduces the number of service transactions we perform per relationship, yielding higher customer satisfaction and lower customer churn, resultingwhich results in lower costs to acquire and serve customers and greater profitability.
In addition to discussions with management, our non-management directors meet regularly in executive sessions that are chaired by our Lead Independent Director with no membermembers of management present. Non-management directors use these
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executive sessions to discuss matters of concern, as well as evaluations of the CEO and senior management, management and boardBoard successions, matters to be included on boardBoard agendas, and additional information the boardBoard would like management to provide to them.
The chairs and all members of the boardBoard committees are independent directors. These chairs shape the agenda and information presented to their committees. Oversight of critical issues within these committees is owned by the independent directors. All directors have full access to all members of management and all employees on a confidential basis.
The full boardBoard of directorsDirectors oversees the various risks to the Company, delegating to the various committees specific responsibilities. The Audit Committee reviews our Enterprise Risk Management (“ERM”) Program on a regular basis, and the boardBoard of directorsDirectors regularly reviews reports from management and the Audit Committee regarding the ERM Program. The Audit Committee meets regularly with members of management in executive session, as well as separately with each of the General Counsel, the Senior Vice President of Internal Audit Services and representatives of our independent registered public accounting firm. The Compensation and Benefits Committee oversees our succession planning and compensation policies and practices, including reviewing our incentive and equity-based compensation plans and benefits plans. The Nominating and Corporate Governance Committee oversees corporate governance, including recommending boardBoard and committee nominations and the Corporate Governance Guidelines and determining director independence. The full Board of Directors oversees the Company’s lobbying activities, which are managed by our Government Affairs team reporting directly to the Executive Chairman. The Board has delegated authority and responsibility for state and local campaign contributions to the Executive Chairman in consultation with the Chief Executive Officer, subject to the provisions of the Company’s Code of Conduct and any other applicable Company policies. The Board annually receives a report on lobbying activities from the head of Government Affairs during one of its quarterly, in-person meetings, as well as quarterly updates on legislative and regulatory activities.
An independent consultant was engaged to perform a risk assessment of the Company’s compensation programs and did not identify any material risks that might adversely impact the financial health or performance of the Company. After review of the work and conclusion of the independent consultant, the Compensation and Benefits Committee agreed with the conclusion reached by the independent consultant.
Proactive Stockholder Engagement
Charter values and carefully considers the feedback we receive from our stockholders. In 2022, we engaged in constructive dialogue with our leading institutional stockholders. We reached out to and offered to have discussions with our 15 largest stockholders holding approximately 73% of the shares of our outstanding stock. We also engaged with stockholders who contacted us requesting engagement and have engaged with the stockholder who has submitted a proposal for consideration at the 2023 annual stockholders’ meeting. We engaged with each stockholder who accepted our offer, making our Executive Vice President, General Counsel and Corporate Secretary, our Senior Vice President, Investor Relations and our Senior Vice President, Deputy General Counsel and Assistant Corporate Secretary available. We also engaged with proxy advisory firms. Stockholder feedback, including through direct discussions and prior stockholder votes, is reported to our Nominating and Corporate Governance Committee regularly throughout the year. We also review our practices against guidelines published by stockholders and proxy advisory firms, among others.
The engagements covered a variety of topics. The topics most often raised and the Company’s response to these discussions are summarized below.
Board Diversity. Our Corporate Governance Guidelines reflect our commitment to diversity and provide that a candidate’s contribution of diversity to the Board of Directors (based on common factors associated with diversity such as gender, race/ethnicity and other background characteristics that enhance the diversity of the board) will be one of the many elements to be considered in evaluating candidates. At this time, our Board includes an African American woman, an Asian American/Pacific Islander and a Latino American. In 2022, the Nominating and Corporate Governance Committee continued to develop its pipe-line of potential diverse director candidates in the event an opening occurs on the Board of Directors, with the expectation and plan that the next opening would be filled by a woman candidate with the exception of a Liberty Broadband or A/N nominee or the Company’s Chief Executive Officer.
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ESG Reporting / GHG Reduction Target. In response to discussions with stockholders regarding the importance of environmental, social and governance (“ESG”) oversight and reporting to stockholders, the Company issued its first ESG Report in April 2021 describing the Company’s policies, performance and improvement targets related to ESG including the Company’s target to be carbon neutral by 2035. The Company issued its 2021 ESG Report in March 2022. We will continue to engage internal and external stakeholders in ESG discussions, reviewing the initiatives of other companies, reviewing ESG ratings and disclosure guidelines, and reviewing the means and opportunities for further carbon emission reductions in the future.
Lobbying Activities. Our Company makes significant disclosures regarding lobbying and political contributions, and our Board believes that these current disclosures are appropriate and consistent with the objectives of transparency and accountability reflected in the proposal. During our engagement discussions, some stockholders indicated they would appreciate increased disclosure describing the Company’s management and oversight of lobbying activities. In this regard, our Government Affairs team manages the Company’s lobbying activities and reports directly to the Executive Chairman, with oversight from the full Board of Directors. The Board has delegated authority and responsibility for state and local campaign contributions to the Executive Chairman in consultation with the Chief Executive Officer, subject to the provisions of the Company’s Code of Conduct and any other applicable Company policies. The Board annually receives a report on lobbying activities from the head of Government Affairs during one of its quarterly, in-person meetings, as well as quarterly updates on legislative and regulatory activities. The Company maintains a public policy website that sets out the Company’s views as to regulatory and other policy issues around our business. Those are the public policy issues we focus upon through our government affairs efforts.
We have received a stockholder proposal regarding lobbying activities in each of the last two years, similar to the stockholder proposal regarding lobbying activities contained in this proxy statement. The proposal requests that the Company prepare an annual report disclosing the Company’s policies and procedures governing lobbying, payments by the Company for lobbying, membership in organizations that prepare model legislation and a description of management’s decision-making process regarding, and the board’s oversight of, lobbying activities. Our position on the lobbying activities proposal is set forth in greater detail under the description of the proposal in this proxy statement.
Director Overboarding. In recent years, some investors have expressed concerns about the number of outside public company boards that certain highly sought-after directors serve on. In addition, some investors and proxy advisors have instituted “bright-line” proxy voting policies on the number of outside public company boards that a director may serve on. The Board acknowledges the worry that such directors could lack the resources to perform all of their obligations to each board. Accordingly the Nominating and Corporate Governance Committee considers all aspects of each director’s contributions, skills and dedication to ensure that each remains an effective director for the Company. The Board realizes that Mr. Maffei, a director on the board and President and Chief Executive Officer of Liberty Broadband, also sits on the boards of several other companies in which Liberty Broadband has an investment or a management relationship, as well as the boards of other companies, as more fully discussed in his Biographical Information above. The Nominating and Corporate Governance Committee has thoroughly evaluated Mr. Maffei’s role in and contributions to the Board, including the significant time and attention he dedicates to the Company, his outside board commitments (which primarily relate to his role with Liberty Broadband and affiliated companies), the overlaps between his service on outside boards and our Board, and Mr. Maffei’s considerable knowledge and experience in the industry. The Nominating and Corporate Governance Committee concluded that Mr. Maffei’s service on outside boards improves, rather than detracts from, his service on the Company’s Board and firmly believes that he will continue to provide the Company with the necessary time and attention to make him an effective director.
Other topics frequently raised during our stockholder engagements regarded executive compensation and advisory say-on-pay votes, and EEO-1 disclosure and diversity, equity and inclusion reporting. This year, stockholders will be asked to consider two advisory votes relative to executive compensation at the annual meeting. One will address the executive compensation as described in the Compensation Discussion and Analysis and the other will address the frequency of advisory votes on the Company’s executive compensation. The EEO-1 disclosure and diversity, equity and inclusion reporting topics were raised by two stockholder proposals originally submitted for consideration at the 2023 annual stockholders’ meeting. We engaged with the stockholders who submitted those proposals and reached agreement that, subject to regulatory developments, Charter would begin to release, during 2024 or before, its consolidated EEO-1 form, along with the rates of at least two inclusion indicators (hiring, retention or promotion) for its employees, sharing this data by the gender, race and ethnicity categories established by the Equal Employment Opportunity Commission. In exchange, each stockholder proposal proponent agreed to withdraw its proposal. We take seriously the views of our stockholders and took into consideration all the various input we received, and intend to continue our stockholder engagement efforts in 2023.
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Stockholder Contact with Directors
Individuals may communicate directly with members of the boardBoard of directorsDirectors or members of the board’sBoard’s standing committees by writing to the following address:
Charter Communications, Inc.
400 Atlantic StreetWashington Blvd.
Stamford, CT 0690106902
Attn: Corporate Secretary
The Corporate Secretary will summarize all correspondence received, subject to the standards below, and periodically forward summaries to the boardBoard of directors.Directors. Members of the boardBoard may at any time request copies of any such correspondence. Communications may be addressed to the attention of the boardBoard of directors,Directors, a standing committee of the boardBoard of directors,Directors, or any individual member of the boardBoard of directors or a committee.Directors. Communication that is primarily commercial in nature, relates to an improper or irrelevant topic, or requires investigation to verify its content may not be forwarded. Communications including substantive accounting matters will be forwarded to the Chair of the Audit Committee.
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20202022 Director Compensation
The non-employee director compensation package for 20202022 included an annual retainer of $120,000 in cash or equity.equity as elected by each director. The non-employee director compensation package also included an annual award of $180,000$200,000 in restricted stock, except with respect to the Lead Independent Director, who received an annual award of $330,000$350,000 in restricted stock. In addition to these annual retainers, under the non-employee director compensation package, the Audit Committee chair receives $30,000 per year, the Compensation and Benefits Committee chair receives $25,000 per year, and the Nominating and Corporate Governance Committee chair receives $20,000 per year. Each Audit Committee member (including the chair) receives $30,000 per year, each Compensation and Benefits Committee member (including the chair) receives $25,000 per year, each Finance Committee member receives $20,000 per year and each Nominating and Corporate Governance Committee member (including the chair) receives $20,000 per year. Mr. Rutledge, Charter’s Executive Chairman, and CEO, was the only current director who was also an employee during 2020.2022.
The following table sets forth information regarding the compensation paid or issued to those non-employee members of the boardBoard of directorsDirectors listed below for services rendered for the fiscal year ended December 31, 2020.2022.
Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | ||||||||||||||||||
W. Lance Conn | 190,000 | 179,613 | 369,613 | 190,000 | 199,865 | 389,865 | ||||||||||||||||||
Kim C. Goodman | 30,000 | 299,186 | 329,186 | 30,000 | 319,586 | 349,586 | ||||||||||||||||||
Craig Jacobson | 20,000 | 299,186 | 319,186 | 20,000 | 319,586 | 339,586 | ||||||||||||||||||
Gregory B. Maffei | 45,000 | 299,186 | 344,186 | 45,000 | 319,586 | 364,586 | ||||||||||||||||||
John D. Markley, Jr. | 190,000 | 179,613 | 369,613 | 190,000 | 199,865 | 389,865 | ||||||||||||||||||
David Merritt | 200,000 | 179,613 | 379,613 | 200,000 | 199,865 | 399,865 | ||||||||||||||||||
James E. Meyer | 140,000 | 179,613 | 319,613 | 140,000 | 199,865 | 339,865 | ||||||||||||||||||
Steven A. Miron | 25,000 | 299,186 | 324,186 | 25,000 | 319,586 | 344,586 | ||||||||||||||||||
Balan Nair | — | 299,186 | 299,186 | — | 319,586 | 319,586 | ||||||||||||||||||
Michael Newhouse | 160,000 | 179,613 | 339,613 | |||||||||||||||||||||
Michael A. Newhouse | 160,000 | 199,865 | 359,865 | |||||||||||||||||||||
Mauricio Ramos | 145,000 | 179,613 | 324,613 | 64,534 | 319,586 | 384,120 | ||||||||||||||||||
Eric Zinterhofer | 65,000 | 449,536 | 514,536 | 65,000 | 469,485 | 534,485 |
(1) | Cash compensation to the directors is paid in advance on a quarterly basis. In addition to the annual retainer, Mr. Conn received payments for his service as the Compensation and Benefits Committee chair, as a member of the Compensation and Benefits Committee and as a member of the Finance Committee. Ms. Goodman elected to receive her annual retainer in equity for |
Charter Communications | 19 | 2023 Proxy Statement
elected to receive his annual retainer in equity for |
Charter Communications | 18 | 2021 Proxy Statement
(2) | Represents the grant date fair value of restricted stock grants for directors, which were granted on April |
Our executive officers for purposes of Section 16 of the Securities and Exchange Act, and our other Executive Vice Presidents as of the date hereof, listed below, are elected by the boardBoard of directorsDirectors annually, and each serves at the pleasure of the boardBoard of directorsDirectors or until his or her successor is elected and qualified or until his or her earlier resignation or removal.
Executive Officers | Position | |
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Thomas M. Rutledge | ||
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Richard R. Dykhouse | Executive Vice President, General Counsel and Corporate Secretary | |
David G. Ellen | Senior Executive Vice President | |
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Kevin D. Howard | Executive Vice President, Chief Accounting Officer and Controller | |
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Charter Communications | 19 | 2021 Proxy Statement
Information regarding our executive officers, and our other senior company leaders, other than Mr. Rutledge who also serves as a director, is set forth below. Information regarding our other senior company leaders is available on the “Investor Relations” section of our website at ir.charter.com.
Charter Communications | 20 | 2023 Proxy Statement
Christopher L. Winfrey President and Chief Executive Officer Age: 47 |
Mr. Winfrey was named President and Chief Executive Officer of the Company in December 2022. He most recently served as Chief Operating Officer since 2021, where he oversaw all cable operations, including marketing, sales, field operations and customer operations, as well as Spectrum Enterprise. Mr. Winfrey joined Charter as Chief Financial Officer in 2010 responsible for Charter’s accounting, financial planning and analysis, procurement, real estate, tax and treasury functions, as well as mergers and acquisitions, capital structure activities and investor relations. Charter added oversight of its fiber-based Spectrum Enterprise business to his CFO responsibilities in 2019, and operational leadership of the residential and SMB Sales and Marketing organization, and Spectrum Community Solutions in February of 2021. Prior to joining Charter, Mr. Winfrey served as Chief Financial Officer of Unitymedia GmbH, Germany’s second-largest cable operator, and as Managing Director for Unitymedia’s cable operations, broadcasting and satellite entities. Earlier in his career, Mr. Winfrey served as Senior Vice President, Corporate Finance and Development at Cablecom, GmbH. He was previously a Director of Financial Planning and Analysis and Director of Operations Services of NTL Incorporated’s continental European operations, and a senior associate in the private equity group at Communications Equity Associates. Mr. Winfrey has spent nearly 25 years in the cable industry, and in 2015 received The Internet & Television Association’s (NCTA) Vanguard Award for Young Leadership. He received a B.S. in accounting and an MBA from the University of Florida.
Richard J. DiGeronimo
President, |
Mr. Bickham joined Charter as Executive Vice President and COO in 2012. He was named President in July 2016. Mr. Bickham joined Charter from Cablevision, where he served as President of Cable and Communications. Earlier in his career, Mr. Bickham was Executive Vice President for Time Warner Cable with corporate responsibility for several large markets. Mr. Bickham was a founding executive of KBLCOM in 1986, a cable company that partnered with American Television and Communications, a predecessor company of Time Warner Cable. Mr. Bickham serves on the Cable Center Board and was honored with the industry’s Vanguard Award for Cable Operations Management in 2007. He received a B.S. in electrical engineering from Texas A&I, now known as Texas A&M-Kingsville.
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Mr. DiGeronimo is Chiefhas been President, Product and Technology Officer at Charter Communications.of the Company since December 2022. Mr. DiGeronimo oversees Charter’s product, engineering, software development and information technology, digital platforms, network operations, advertising sales, business development and programming acquisition organizations. Mr. DiGeronimo joined Charter in 2008 as Vice President of Product Management and has served in several leadership roles, including Senior Vice President of Product and Strategy, Executive Vice President of Product and Strategy, and Executive Vice President, Chief Product Officer. HeOfficer, and he was appointed to his current positionChief Product and Technology Officer in 2019 and leads Charter’s product, engineering, information technology, and business development organizations. In 2021, oversight of Charter’s advertising sales business, Spectrum Reach, was added to his responsibilities.2019. Mr. DiGeronimo joined Charter from Level 3 Communications, where he served as Vice President and General Manager of the Cable Markets Group. He also held leadership roles in product management and corporate finance over his eight years at Level 3. Mr. DiGeronimo started his career at Bear Stearns where he focused on technology investment banking. Mr. DiGeronimo was named Women in Cable Telecommunications (WICT) Rocky Mountain Mentor of the Year in 2015 and serves on the board of Adaptive Spirit, the primarya significant fundraiser for the United States Paralympics Ski and Snowboard Teams. He received a BBA from the Ross School of Business at the University of Michigan where he graduated with High Distinction.
Richard R. Dykhouse Executive Vice President, General Counsel and Corporate Secretary Age:
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Mr. Dykhouse has served as Executive Vice President, General Counsel and Corporate Secretary since 2013 having previously beenand General Counsel since 2011. Mr. Dykhouse joined Charter as Vice President, Associate General Counsel and Assistant Secretary in 2006. Mr. Dykhouse joined Charter from CNH Global, N.V. (now CNH Industrial), where he served as Senior Counsel and Assistant Secretary. Before CNH, he was an attorney for Conseco, Inc. (now CNO Financial Group, Inc.) for nearly 10 years, serving in the corporate law group, with his last position as Senior Vice President, General Counsel since January 2011 and a Vice President of Charter from 2006 to 2011.Legal. Mr. Dykhouse received a bachelor’s degree in finance from Olivet Nazarene University, an M.B.A. from Indiana University and a J.D. degree from Indiana University Robert H. McKinney School of Law.
David G. Ellen Senior Executive Vice President Age:
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Mr. Ellen joined Charter as Senior Executive Vice President in 2016. Mr. Ellen oversees several business and corporate functions including Programming, Spectrum Networks, Human Resources, Communications, Diversity & Inclusion, Spectrum Community Impact programs, Physical Security, regulatory policy support and compliance, and legal support for several of those areas. Mr. Ellen joined Charter from Cablevision, where he served as Executive Vice President and General Counsel. Before Cablevision, Mr. Ellen served as Deputy General Counsel at IAC, the multi-brand media and internet company. Earlier in his career, Mr. Ellen worked at the Federal Communications Commission and before that was a law clerk for now retired Justice Sandra Day O’Connor at the U.S. Supreme Court. He also clerked for Justices Stephen Breyer and Ruth Bader Ginsburg when they were each on the U.S. Court of Appeals. He received a B.A. from Harvard College, a law degree from Harvard Law School, where he was President of the Harvard Law Review, and a master’s degree from Cambridge University, where he was a Marshall Scholar.
Charter Communications | 2021 | 20212023 Proxy Statement
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Mr. Hargis joined Charter as Executive Vice President and Chief Marketing Officer in 2012. Mr. Hargis oversees the company’s sales and marketing strategy and decisions. Mr. Hargis joined Charter from Cablevision, where he most recently served as Executive Vice President, Marketing. Earlier in his career, Mr. Hargis served in various leadership roles at AT&T. Mr. Hargis served on the board of the Cable & Telecommunications Association for Marketing Educational Foundation from April 2008 to March 2012 and chaired the board from September 2011 to March 2012. He received a B.A. from Otterbein College and an MBA from Wright State University.
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Mr. Howard was promoted to his current role as Executive Vice President, Chief Accounting Officer and Controller in July 2019. Prior to that he served as Senior Vice President — Finance, Controller and Chief Accounting Officer since December 2009. From August 1, 2010 through October 31, 2010, Mr. Howard served as Interim Chief Financial Officer. From April 2006 to December 2009, Mr. Howard served as Vice President, Controller and Chief Accounting Officer. Mr. Howard is responsible for Charter’s operational and technical accounting, financial reporting, payables, and enterprise resource planning operations. Prior to that, he served as Vice President of Finance from April 2003 until April 2006 and as Director of Financial Reporting since joining Charter in April 2002. Mr. Howard joined Charter from Arthur Andersen LLP, where he served as an auditor in the audit division for nearly a decade. Mr. Howard received a bachelor’s degree in finance and economics from the University of Missouri — Columbia and is a certified public accountant and certified managerial accountant.
Chief Financial Officer Age: |
Mr. Winfrey joined Charter as Chief Financial Officer in 2010. Mr. Winfrey is responsible for Charter’s accounting, financial planning and analysis, procurement, real estate, tax and treasury functions, as well as mergers and acquisitions, capital structure activities and investor relations. In addition, Charter added oversight of its fiber-based business services (“Spectrum Enterprise”) to his responsibilities in 2019, and operational leadership of the residential and SMB Sales and Marketing organization, and Spectrum Community Solutions in 2021. Mr. Winfrey joined Charter from Unitymedia GmbH, Germany’s second-largest cable operator, where he served as Chief Financial Officer, and as Managing Director for Unitymedia’s cable operations, broadcasting and satellite entities. Earlier in his career, Mr. Winfrey served as Senior Vice President, Corporate Finance and Development at Cablecom, GmbH. He was previously a Director of Financial Planning and Analysis and Director of Operations Services of NTL Incorporated’s continental European operations, and a senior associate in the private equity group at Communications Equity Associates. Mr. Winfrey has spent more than 20 years in the cable industry, and in 2015 received The Internet & Television Association’s (NCTA) Vanguard Award for Young Leadership. He currently serves on the board of directors for the Greenwich Center for Hope and Renewal. He received a B.S. in accounting and an MBA from the University of Florida.
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Mr. Adams joined Charter as Executive Vice President, Field Operations in 2012. Mr. Adams has national oversight of Field Operations for the company. Mr. Adams joined Charter from Time Warner Cable, where he spent 17 years and served as Regional Vice President of Operations for Wisconsin and Regional Vice President of Operations for Eastern Carolina. Earlier in his career, Mr. Adams worked for NewChannels Corporation in various leadership roles including Vice President of New Business. He received an associate degree in applied science, engineering from State University of New York at Delhi, and a B.S. in engineering from Florida International University.
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Mr. Archer joined Charter Communications in October 2019 as Executive Vice President and President of Spectrum Enterprise. Mr. Archer, an industry veteran with more than 35 years of experience in telecommunications most recently served as Managing Director of Business at eir Group, the principle provider of fixed-line and mobile communications services in Ireland. Prior to joining eir in 2012, Mr. Archer spent more than 30 years at AT&T where he held a range of senior leadership positions across AT&T Business including President of Advanced Solutions, Executive Vice President of Strategy and Transformation, President of EMEA (Europe, Middle East, and Africa), Senior Vice President of Product Management, and Chief Marketing Officer. Mr. Archer earned a Bachelor of Science in Business Administration from Providence College.
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Mr. Bair joined Charter as Executive Vice President, Spectrum Networks in 2016. Mr. Bair oversees Spectrum Networks, a series of 24/7 local news, and regional sports networks owned and operated by Charter. Mr. Bair joined Charter from Bleachers Corp., where he served as Chief Executive Officer of the startup streaming media company. Earlier in his career, Mr. Bair served as President of Madison Square Garden’s Media Group where he led the strategic, operational and financial performance of MSG Networks, Fuse Music TV, MSG Interactive, MSG Radio and all sponsorship and ad sales for the parent company. Mr. Bair also previously served as President, Product Management and Marketing for the cable division at Cablevision, where he was responsible for product strategy, programming, marketing and advertising, as well as brand management for the company’s video, voice and internet services. Mr. Bair also oversaw Cablevision/Rainbow’s national and regional sports networks and held executive positions at HBO, Showtime Networks and Ogilvy and Mather Advertising. He received a B.A. in broadcast communications from Penn State University.
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Ms. Bohigian joined Charter as Executive Vice President, Government Affairs in 2013. Ms. Bohigian oversees all aspects of Charter’s federal, state and local government affairs activities including local and state franchising. She is responsible for developing the company’s public policy positions and directing its legislative and regulatory strategies in Washington, D.C. and in the 41 states Charter serves. Ms. Bohigian joined Charter from Cablevision, where she opened its Washington office and served as Senior Vice President, Federal Affairs. Earlier in her career, Ms. Bohigian served as Chief of the Office of Strategic Planning and Senior Advisor to the Chairman at the Federal Communications Commission. Before joining the FCC, she represented telecommunications clients as an attorney at Wiley Rein in Washington. She received a B.A. from Duke University and a Juris Doctor from Harvard Law School.
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Ms. Fischer is Executive Vice President,was named Chief Financial Officer of Charter in October 2021. Ms. Fischer oversees Accounting, Finance, and oversees Tax and Risk Management, Procurement, Investor Relations, Internal Audit, and Corporate Budgeting and Planning. Additionally, she manages Charter’s equity and capital markets strategy and execution, as well as M&A and investing activity. Ms. Fischer was the Seniormost recently served as Executive Vice President, Finance and joined Charter as Corporate Treasurer and oversaw Charter’s Treasury and cash management activities from 2017 to early 2021. Prior toin 2017. Before joining Charter, Ms. Fischershe was a partner in the National Tax Department at EY where she advised clients on the tax structuring and implementation of partnership transactions primarily in the media and telecommunications space, including advising Charter on its transactions with Time Warner Cable and Bright House Networks in 2016. She is a graduate of Washington University in St. Louis, where she earned a B.S. in business administration in accounting and managerial economics, and a master of science in business administration with a concentration in accounting.
Charter Communications | 22 | 2021 Proxy Statement
Executive Vice President,
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Mr. FisherHoward is Executive Vice President, Corporate Finance & DevelopmentChief Accounting Officer and Controller at Charter. He has managed Charter’s debt and equity capital markets strategy and execution, mergers and acquisitions, and corporate development including equity investments and joint ventures since he joined Charter in 2013.2002 as Director of Financial Reporting and was promoted to Chief Accounting Officer and Controller in 2006. He also served as Interim Chief Financial Officer from August 1, 2010, through October 31, 2010. Mr. Fisher’s responsibilities expanded in 2019 to include providing more dedicated corporate development leadershipHoward is responsible for Spectrum EnterpriseCharter’s operational and Spectrum Reach,technical accounting, taxes, financial reporting, payables and were expanded again in 2021 to include oversight of all Treasury activities. From 2019 to 2021,enterprise resource planning operations. Mr. Fisher also had responsibility for managing Charter’s investor relations and procurement functions. Mr. FisherHoward joined Charter in 2013 from Guggenheim Partners,Arthur Andersen LLP, where he was a Senior Managing Director for Telecoms & Media. Prior to joining Guggenheim Securities, he was at Nomura Securities where he headed the Media Investment Banking practice for the Americas. Earlier in his career, Mr. Fisher served as a Managing Director and led Lehman Brothers’ and Nomura’s European Cable Investment Banking business in London, and was a Managing Director for Lehman Brothers in both London and New York. He received a B.A. from Queen’s University in Ontario and an MBA from Columbia Business School.
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Mr. Hagan serves as Charter’s Executive Vice President, Customer Operations. Mr. Hagan joined Charter in 2015 as Vice President, Business Integration and has served in several leadership roles, including Group Vice President of Technical Operations Support, and Senior Vice President of Shared Services for Customer Operations. He was appointed to his current position in 2019 and leads Charter’s Customer Operations, including customer service, billing operations and credit and collections. Prior to joining Charter, Mr. Hagan served as Senior Vice President, Enterprise IT, for Cablevision. He also held multiple leadership positions at GE Aerospace andauditor in the U.S. Navy.audit division for nearly a decade. He is a certified public accountant and a certified managerial accountant. He received a B.S. in engineeringfinance and economics from the United States Naval Academy.
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Mr. Kline serves as Charter’s Executive Vice President, and PresidentUniversity of Spectrum Reach, the advertising sales division of Charter. Mr. Kline joined Charter in 2015 and provides strategic leadership to guide the company in both the traditional and advanced TV advertising space. Spectrum Reach is responsible for selling inventory on all Charter and affiliated cable systems as well as Spectrum news and sports networks. The company offers highly-targeted, integrated advertising solutions across a variety of media platforms including linear television, VOD, IP streaming, curated online display, video and social inventory. Mr. Kline joined Charter from Visible World (now FreeWheel), where he served as President and Chief Operating Officer, directing their household addressable sales and programmatic advertising efforts. Earlier in his career, Mr. Kline served as President and Chief Operating Officer of Cablevision Media Sales (now Altice Media Solutions) for more than 17 years. He oversaw the company’s advertising businesses and spearheaded many firsts for the cable industry including the launches of linear household addressability, successful interactive applications and data-infused media campaigns. Mr. Kline serves on the board of directors for the Video Advertising Bureau, NCC Media, Canoe and 605. He received a B.A. in a personalized study program focusing on marketing, finance, accounting and management from The Ohio State University.
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Mr. Marchand joined Charter as Executive Vice President, Human Resources in 2015. Mr. Marchand is responsible for all human resources strategies, policies and practices for all employees. He oversees all aspects of HR including recruitment, training and development, HR operations including payroll, HR shared services and HR systems, as well as compensation and benefits. Mr. Marchand joined Charter from PepsiCo, most recently serving as Senior Vice President of Human Resources for the North America Beverages division. Earlier in his career he served in human resources roles at Merrill Lynch, JP Morgan and the May Department Stores. He received a B.A. in advertising from Syracuse University and a master’s degree in organizational psychology from Columbia University.Missouri-Columbia.
Charter Communications | 2322 | 20212023 Proxy Statement
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Ms. Mitchko-Beale joined Charter Communications in 2019 as Executive Vice President, Chief Technology Officer. Ms. Mitchko-Beale oversees Charter’s Network, Mobile, Video and Software Engineering teams, as well as Network Architecture, Technology Policy, and Emerging Technology organizations. Ms. Mitchko-Beale joined Charter from Cadent, a provider of data-driven solutions for buying and selling TV advertising, where she served as joint Chief Technology Officer and Chief Operating Officer. Earlier in her career, she was Senior Vice President of Video Infrastructure Software at Cablevision where she was responsible for the software development of new consumer-facing technologies. She received a B.S. in electrical engineering from Polytechnic University in New York. She teaches as a guest lecturer at NYU Stern School of Business and is a member of the NYU Poly Enterprise Learning Board.
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Mr. Montemagno joined Charter as Executive Vice President, Programming Acquisition in 2016. Mr. Montemagno leads Charter’s negotiations with a full range of content providers from major multichannel media companies and sports networks to local broadcasters. Those negotiations extend to all facets of programming offerings, including On Demand and streaming rights on multiple platforms. Mr. Montemagno joined Charter from Cablevision, where he most recently served as Executive Vice President of Programming. During his 27-year tenure at Cablevision, he held various leadership positions in the programming department including Senior Vice President of Programming Acquisition. He received a B.S. in marketing from St. John’s University.
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Mr. Nuzzo serves as Charter’s Executive Vice President, Business Planning at Charter. Mr. Nuzzo joined the company in 2014 to oversee business planning for Cable Operations, working closely with Field Operations, Customer Service, Marketing, Network Operations, Technology and the Product teams. His areas of oversight expanded in 2019 to include Charter’s Corporate Financial Planning & Analysis and Business Planning, Business Intelligence, Revenue Assurance and Corporate Services Functions. Mr. Nuzzo joined Charter from Cablevision where he served as Senior Executive Vice President, Operations and Business Planning. He spent 27 years at Cablevision in several business planning positions at the executive level. Earlier in his career, Mr. Nuzzo was a finance executive at Rainbow Advertising Sales Corporation, the advertising sales division of Rainbow Media, now AMC Networks. He received a BBA with an emphasis on accounting from Hofstra University.
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Mr. Ray serves as Charter’s Executive Vice President, Spectrum Community Solutions. He oversees Charter’s Spectrum Community Solutions business, which provides residential TV, internet and voice services to apartments, condos, and gated single-family community developments. Mr. Ray joined Charter from Comcast in 2005 and has held several leadership positions, most recently serving as Regional Vice President of Field Operations for the Florida Region. Prior to that he served as Group Vice President, Residential Direct Sales, and earlier in his career at Charter he served as Senior Director, Sales Operations in Los Angeles. He received a B.A. from Maryville College, a master’s degree from Austin Peay State University, and an MBA from the University of Tennessee-Knoxville. In addition, he is a graduate of the Cable Executive Management program at Harvard Business School.
Charter Communications | 24 | 2021 Proxy Statement
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Mr. Srinivasan serves as Executive Vice President, Network Operations for Charter. In his current role, Mr. Srinivasan is responsible for network operations across Charter’s 41-state footprint. He joined Charter in 2016, and most recently served as Senior Vice President in Network Operations, first in Core and Backbone Operations and most recently in Video Operations. Prior to that, he served in several senior engineering roles at Time Warner Cable, including as Group Vice President of Commercial Engineering and Operations, Vice President of Commercial Engineering for Time Warner Cable’s West Region, and Director in the Texas Region. Mr. Srinivasan began his career at Sprint in a series of engineering roles with increased responsibility. He received a B.S. from Anna University, a master’s degree and doctorate in materials science from Kansas State University, and a master’s degree in business administration from the Graduate School of Business at the University of Kansas.
Charter Communications | 25 | 2021 Proxy Statement
Compensation Committee Interlocks
and Insider Participation
During 2020,2022, no member of Charter’s Compensation and Benefits Committee was an officer or employee of Charter or any of its subsidiaries. During 2020,2022, Mr. Zinterhofer served as Lead Independent Director and Mr. Rutledge served as Chairman and CEO.CEO through November 30, 2022 and as Executive Chairman from December 1, 2022 through December 31, 2022.
During 2020:2022: (1) none of Charter’s executive officers served on the compensation committee of any other company that has an executive officer currently serving on Charter’s boardBoard of directorsDirectors or Compensation and Benefits Committee; and (2) none of Charter’s executive officers served as a director of another entity in circumstances where an executive officer of that entity served on the Compensation and Benefits Committee of Charter’s boardBoard of directors.Directors.
Report of the Compensation and Benefits Committee
The following report does not constitute soliciting materials and is not considered filed or incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Securities Exchange Act, of 1934, as amended, unless we specifically state otherwise.
The Compensation and Benefits Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth below including the accompanying tables and recommended to the board of directors that it be included in this proxy statement.
W. LANCE CONN, Chairman
GREGORY B. MAFFEI
STEVEN A. MIRON
MAURICIO RAMOS
ERIC L. ZINTERHOFER
Charter Communications | 2623 | 20212023 Proxy Statement
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) describes important elements of our executive compensation program and compensation decisions for our named executive officers (“NEOs”) in fiscal year 2020.2022. The Compensation and Benefits Committee of our Board of Directors (the “Committee”), working with management and with input from its independent compensation consultant, oversees these programs and determines compensation for our NEOs. This CD&A should be read together with the compensation tables and related disclosures set forth elsewhere in this proxy statement.
Fiscal Year 20202022 Named Executive Officers
Thomas M. Rutledge, Chairman and Chief Executive Officer
• | Thomas M. Rutledge, Executive Chairman (previously served as Chairman and Chief Executive Officer until December 1, 2022) |
John Bickham, President and Chief Operating Officer
• | Christopher L. Winfrey, President and Chief Executive Officer (previously served as Chief Operating Officer until December 1, 2022) |
Rich DiGeronimo, Chief Product & Technology Officer
• | Richard J. DiGeronimo, President, Product & Technology (previously served as Chief Product & Technology Officer until December 1, 2022) |
David G. Ellen, Senior Executive Vice President
• | David G. Ellen, Senior Executive Vice President |
• | Jessica M. Fischer, Chief Financial Officer |
Christopher L. Winfrey, Chief Financial Officer
• | Jonathan Hargis, Special Advisor to the COO (previously served as EVP, Chief Marketing Officer until April 1, 2022) |
Fiscal 20202022 Operational and Financial Highlights
Despite the significant challenges posedIn spite of challenging market dynamics with low connect activity driven by the COVID-19 pandemic overhistorically low customer churn, Charter achieved customer relationship growth in 2022 – and its highest growth in mobile lines to-date – and annual increases in both top and bottom-line financial performance. Over the course of 2020,the year, Charter continued to successfully serveexpand and improve services for its customerscustomers: progressing rural build-out initiatives and operatethe beginning of its business asnetwork evolution plans to deliver multi-gig broadband speeds across its entire footprint. Charter also introduced the new Spectrum One bundle in late 2022, which brings together Spectrum Internet®, Advanced Wi-Fi, and Unlimited Spectrum Mobile™, to offer consumers fast, reliable and secure on-line connections on their favorite devices at home and on-the-go in a provider of connectivity services. In response to the pandemic, Charter took a number of significant actions during the year:
Offered customers a Remote Education Offer pursuant to which new customers with students or educators in the household were eligible to receive Charter’s Internet service for free for 60 days;
Offered customers the Keep Americans Connected (“KAC”) pledge which paused collection efforts and related disconnects for residential and small and medium business (“SMB”) customers with COVID-19 related payment challenges;
Opened WiFi access points across Charter’s footprint for public use and offered public access to Spectrum News websites to ensure people have access to high-quality local news and information;
Donated significant airtime to run public service announcements to our entire footprint; and
Prioritized requests from government, healthcare and educational institutions for new fiber connections, bandwidth upgrades and new services.
In addition, Charter took a number of steps to support its employees, providing additional paid sick time for COVID-19-related illnesses, a flex time program to address other COVID-19-related issues, and a $1.50 per hour wage increase for hourly field operations and customer service call center employees. This wage increase was also part of Charter’s commitment to raise its minimum starting wage for hourly employees to $20 an hour over the next two years.
While taking these key actions in response to the pandemic, Charter’s operating and investment strategy enabled robust customer relationship growth and strong financial results. These results were driven in particular by continued investments in systems integrations and automation — including the self-installation program — and in Charter’s network, which provided bandwidth to withstand surging use, particularly among residential customers.high-value package. For the fiscal year ended December 31, 2020:2022, Charter achieved the following key operational and financial objectives:
Total customer relationships grew by 1,895,000, or 6.5%
• | Total customer relationships grew by 126,000, or 0.4% |
Mobile lines grew by 1,293,000, 345,000 more than in the prior year
• | Mobile lines grew by 1,728,000, Internet customers by 344,000 |
Revenue grew by 5.1% to $48.1 billion
• | Revenue grew by 4.5% to $54.0 billion |
Adjusted EBITDA grew by 9.9% to $18.5 billion
• | Adjusted EBITDA grew by 4.8% to $21.6 billion(1) |
Free cash flow grew by $2.5 billion or 53.4%
• | Free cash flow of $6.1 billion(1) |
• | Charter also purchased approximately 23.8 million shares of Charter Class A common stock and Charter Holdings common units for approximately $11.7 billion in 2022 at an average price per share of $491.48. |
Charter Communications | 27 | 2021 Proxy Statement
Charter also purchased approximately 21.1 million shares of Charter Class A common stock and Charter Holdings common units for approximately $12.1 billion in 2020 at an average price per share of $574.00.
(1) | See “Non-GAAP Financial Measures” in Appendix A. |
The graph below tracks Charter’s 5-year total shareholder return (TSR) against the S&P 500 and peer groupPrimary Peer Group companies. SinceNo changes were made to Charter’s peer group was changedPrimary or Secondary Peer Groups in 2020, both current and prior peer group companies are tracked2022 (the Secondary Peer Group is not included on the graph. The changes to peer group companies are discussed further in this Compensation Discussion & Analysis.graph).
Charter Communications | 24 | 2023 Proxy Statement
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Charter Communications, Inc., the S&P 500 Index,
2019and a Peer Group and 2020 Peer Group
Talent Planning & CEO Transition
The transition of the CEO role from Mr. Rutledge to Mr. Winfrey and the promotion of Mr. DiGeronimo to the role of President, Product & Technology reflects the conclusion of a multi-year succession planning process wherein the Committee and the Board along with the support of advisors and Mr. Rutledge, identified Mr. Winfrey as the appropriate successor to Mr. Rutledge as CEO and expanded Mr. DiGeronimo’s responsibilities to include oversight of Charter’s Programming Acquisition function. As part of the CEO succession process, the Committee considered Mr. Winfrey’s nearly 25 years of cable industry experience, his significant strategic contributions to the Company since joining Charter as CFO in 2010, and his achievements since assuming broader operating responsibilities in 2019 and the role of Chief Operating Officer in 2021.
The Committee works closely with the CEO (which was Mr. Rutledge through November 30, 2022 and Mr. Winfrey thereafter), management and the Committee’s consultants in talent planning and executive transitions for the Company’s executive officers. For 2022, such activity included Mr. Winfrey assuming the role of President and CEO (with Mr. Rutledge transitioning to Executive Chairman) and Mr. DiGeronimo assuming the role of President, Product & Technology. The Committee’s work to promote these individuals included establishing the appropriate expansion and transition of responsibilities, conducting talent planning and development processes, and crafting the proper compensation incentives.
Prior to his assuming the role of Executive Chairman, the Committee also worked closely with Mr. Rutledge in connection with talent planning activities for other non-NEO executives, including the promotion of successors for both Mr. Hargis and the Company’s former Executive Vice President, Field Operations. Mr. Hargis and the former Executive Vice President, Field Operations each transitioned to the role of Special Advisor to the COO effective April 1, 2022 and retired from the Company on December 31, 2022. The Committee believes this process has been effective at progressing Charter’s highly experienced management team and maintaining the focus on delivering on Charter’s strategies for growth and value creation.
Compensation Structure & Pay for Performance Alignment
Charter structures its NEO compensation packages to provide a total opportunity that is competitive against the median of Charter’s compensation programs are designed topeer group, create a strong linkage between the actual compensation earned by our NEOs and Company performance, rewardingand reward both growth-oriented annual operating results as well as sustainable long-term shareholder returns.
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The following table summarizes the performance-focused natureelements of Charter’s incentive designs in 20202022 and the key outcomes demonstrating theresulting alignment between compensation realized by our NEOs and results achieved by the Company.
20202022 Performance-Oriented Incentive Design Features
Annual Incentive Plan
Formulaic plan design with financial metrics that are key indicators of Charter’s success and measures of long-term value creation in a subscription business —metrics reward top and bottom-line performance and the achievement of key strategic objectives for the business, weighted as follows: cable revenue (20% weighting), cable Adjusted EBITDA (60% weighting), and Strategic Objectives (20% weighting) with the weighting for our CEO set at 12.5% for revenue, 37.5% for Adjusted EBITDA and 50% for Strategic Objectives.
• | Formulaic plan design with financial metrics that are key indicators of Charter’s success and measures of long-term value creation in a subscription business —metrics reward top and bottom-line performance and the achievement of key strategic objectives for the business. With respect to our NEOs excluding the Executive Chairman, the metrics were total revenue (excluding mobile device related revenue) weighted at 20%, total Adjusted EBITDA (excluding RDOF related expenses and mobile related device sales) weighted at 60%, and Strategic Objectives weighted at 20%. With respect to the Executive Chairman, Mr. Rutledge, the metrics were revenue weighted at 10%, Adjusted EBITDA weighted at 30%, and Strategic Objectives weighted at 60%; the bonus metrics and weightings for Mr. Rutledge were established in consideration of his role as CEO, in which capacity he served until transitioning to Executive Chairman on December 1, 2022. |
Growth-based performance objectives — threshold, target and maximum performance levels all correspond to positive year-over-year growth in cable revenue and cable Adjusted EBITDA.
• | Growth-based performance objectives — threshold, target and maximum performance levels all correspond to positive year-over-year growth in revenue and Adjusted EBITDA. |
• | Maximum bonus payout level set at 150% of target incentives —provides upside potential to incentivize long-term, sustainable performance through Charter’s growth-oriented strategy. |
Maximum bonus payout level set at 150% of target incentives —provides upside potential to incentivize long-term, sustainable performance through Charter’s growth-oriented strategy.
Long-Term Incentive Plan
• | Award mix that emphasizes stock price appreciation — grants delivered in a mix of 90% stock options and 10% RSUs, generally. Mr. Rutledge and Mr. Winfrey received awards 100% in stock options to further emphasize the performance-based nature of those awards and in consideration of their key leadership roles within Charter (Mr. Rutledge serving as Chairman and CEO until his transition to Executive Chairman and Mr. Winfrey serving as Chief Operating Officer until his transition to President and CEO). |
• | Multi-year time-based vesting period — awards 100% vest on the third anniversary of the grant date (3-year cliff vesting). |
• | Long-term incentive program aligns pay for performance — since the completion of the Transactions on May 18, 2016, Charter’s philosophy has been to deliver the largest portion of NEO compensation in the form of long-term incentives tied to stock price appreciation, i.e., stock options. Following the Transactions, Charter achieved significant stock price appreciation with the stock price increasing 261% from $227.41 (the closing price of Charter’s Class A common stock on May 18, 2016) to a high of $821.01 on September 2, 2021. Subsequent to this period of substantial growth in the stock price, and within an uncertain, inflationary macroeconomic environment, Charter’s price decreased 59% to $339.10 (the closing stock price as of December 30, 2022) but still represented overall growth of 49% for the period from May 18, 2016 to December 30, 2022. As noted above, Charter’s long-term incentive program design ties the majority of executive pay to appreciation-based equity awards with multi-year vesting periods, which created strong pay for performance alignment over time. In particular, the exercise prices for Charter’s last three annual equity grants – which occurred in mid-January of each year for NEOs and other participants in the equity program – were $512.0575, $625.55, and $588.825 for 2020, 2021 and 2022, respectively. As of December 31, 2022, all of the stock option awards from such grants were unvested and underwater, demonstrating the significant degree of performance accountability within the compensation program, and Charter’s stock price will need to increase by more than 51% in order for our NEOs to realize value from these outstanding stock option awards. Furthermore, as described in the Pay Versus Performance disclosure on page 40 of this proxy, Charter’s long-term incentive program design resulted in strong alignment between NEO compensation and Charter’s total shareholder return (TSR) performance. |
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2016 Performance-based Program (Messrs. Rutledge, Bickham, Ellen and Winfrey*)
Five-year long-term incentive program (the “2016 Performance-based Program”) — awards to participants were granted in 2016 and designed to provide valueCharter’s compensation structure for the five-year periodNEOs results in an overall mix of pay that is highly performance-based, particularly with respect to the grants.
Award mix that emphasizesproportion of compensation tied to stock price appreciation — grants were delivered in a mix of 90% via stock options and 10% RSUs.
Multi-year time-based vesting period — eligibility for vesting rangeswithout taking into account the performance-based incentives derived from 3previously vested equity awards. The compensation mix delivered to 5 years after grant.
Performance-based vesting criteria tied to significant levels of stock price appreciation —the CEO and other NEOs in addition to time-based criteria,2022, based on the vesting of all awards is further contingent uponvalues disclosed in the attainment of stock price hurdles that represent price appreciation of approximately 30% to 155% from Charter’s stock price at the commencement of the program; vesting of each tranche does not occur until both the applicable time-based and performance-based vesting criteria have been met; vesting may occur up to six years after grant and, if a given price hurdle is not met within that timeframe, the associated tranche of the award is forfeited.
No pay realizable by participants for non-performance — no value would have been received by executives if stock price growth had not exceeded 30% within six years after grant.
Competitive award opportunities — individual grant sizes are calibrated such that, over the program’s duration, a minimum of 70% stock price appreciationSummary Compensation Table, was required for participants to realize value at the median of Charter’s peer group.
2016 Performance-based Program drives shareholder value — Charter adopted the program in 2016 to drive performance in connection with the integration and implementation of Charter’s business strategies following the Transactions.
The day after the completion of the Transactions, Charter’s stock price was $227.41 per share with a total market capitalization of $70.2 billion.
As of December 31, 2020, the closing price of Charter’s Class A common stock was $661.55 with a total market capitalization of $143.1 billion representing a stock price increase of 191% and a total market capitalization increase of 104% or $72.9 billion.
as follows:
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Compensation Actions in 20202022
The Committee’s 2020Committee established 2022 compensation actions for the NEOs were establishedwithin the framework of the Committee’s compensation philosophy and in accordance with the section below regarding the process for determining executive compensation. Compensation decisions are made within the frameworkKey elements of the Committee’s compensation philosophy — benchmarkingprocess include comparing compensation levels against industry and size-appropriate peer group companies, designing pay for performance incentive programs, linking a significant majority of pay to sustained stock price growth, and ensuring that outstanding incentive value appropriately motivates and retains NEOs. Through this approach, the Committee entered into or amended employment agreements, determined any appropriate changes to NEO compensation levels, and established annual and long-term incentive designs for the 20202022 fiscal year.
For all NEOs, The actions undertaken by the Committee approvedfor 2022 included the following:
1. | Entered into an amended and restated employment agreement with Mr. Rutledge in connection with his transition into the role of Executive Chairman. |
The Company entered into an amended and restated employment agreement with Mr. Rutledge in connection with his transition to the role of Executive Chairman effective December 1, 2022. Under the agreement, Mr. Rutledge will serve as Executive Chairman of the Company and its Board of Directors through the term of the agreement on November 30, 2023, and he will maintain oversight of the Government Affairs function while providing his guidance and expertise to ensure a formulaicsmooth and successful transition. Mr. Rutledge’s amended and restated employment agreement also provides for the following changes to his compensation that were effective as of December 1, 2022:
Pay Element | Prior | New | ||
Base Salary | $2.5 million | $1.25 million | ||
Annual Incentive | 300% of base salary | 300% of base salary (no change) | ||
Long-Term Incentive | $30.0 million | $15.0 million |
Under the terms of the agreement, Mr. Rutledge’s equity award in 2023 will continue to be entirely in stock options.
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2. | Entered into an amended and restated employment agreement with Mr. Winfrey in connection with his promotion to President and Chief Executive Officer, succeeding Mr. Rutledge. |
Mr. Winfrey’s promotion to President and CEO was effective as of December 1, 2022, the date upon which Mr. Rutledge assumed the role of Executive Chairman. Mr. Winfrey’s amended and restated employment agreement has an initial term through December 1, 2025 and provides for the following changes to his compensation that were effective as of the September 20, 2022 execution date of the agreement:
Pay Element | Prior | New | ||
Base Salary | $1.25 million | $1.7 million | ||
Annual Incentive | 160% of base salary | 250% of base salary | ||
Long-Term Incentive | $10.0 million | $17.0 million |
Mr. Winfrey’s agreement also provided for an equity award of $2,000,000, delivered 100% in stock options and granted on September 22, 2022.
3. | Entered into a new employment agreement with Mr. DiGeronimo in connection with his promotion to President, Product & Technology. |
Mr. DiGeronimo’s promotion to President, Product & Technology was effective December 1, 2022. Mr. DiGeronimo’s employment agreement has an initial term through December 1, 2025 and provides for the following changes to his compensation that are effective as of the September 20, 2022 execution date of the agreement:
Pay Element | Prior | New | ||
Base Salary | $1.25 million | $1.45 million | ||
Annual Incentive | 160% of base salary | 200% of base salary | ||
Long-Term Incentive | $8.0 million | $10.0 million |
Mr. DiGeronimo’s employment agreement also provided for an equity award of $800,000, delivered in a mix of 90% stock options and 10% RSUs and granted on September 22, 2022 following the execution of the agreement. Under the terms of the agreement, Mr. DiGeronimo’s future equity awards will also be delivered in a mix of 90% stock options and 10% RSUs.
4. | Amended Mr. Ellen’s employment agreement as of October 27, 2022. |
Mr. Ellen’s employment agreement, effective July 1, 2021, was amended to extend his term through December 1, 2023 (from the original term date of July 1, 2023).
5. | Amended Mr. Hargis’s employment agreement effective April 1, 2022 in connection with his transition to the role of Special Advisor to the COO on April 1, 2022 and retirement on December 31, 2022. |
Mr. Hargis’s current employment agreement, which was initially effective May 18, 2021, was amended effective April 1, 2022 to transition his role from EVP, Chief Marketing Officer to Special Advisor to the COO and to change the term of his agreement to December 31, 2022 from the original term date of May 18, 2023. In his role as Special Advisor, Mr. Hargis reported to the then COO and was responsible for assisting successor executives, managing key projects, and providing advice and counsel through the end of the term. In addition, the amendment to Mr. Hargis’s agreement provided for the following compensation changes as of the April 1, 2022 effective date:
Pay Element | Prior | New | ||
Base Salary | $700,000 | $350,000 | ||
Annual Incentive | 150% of base salary | 150% of base salary (no change) |
There were no changes to Mr. Hargis’s long-term incentive opportunity in connection with the amendment to his employment agreement as he received no further long-term incentive awards after such time, and upon the conclusion of his agreement term on December 31, 2022, Mr. Hargis retired from the Company.
6. | Granted annual equity awards to Messrs. Rutledge, Winfrey, DiGeronimo, Ellen and Hargis, and Ms. Fischer on January 15, 2022. |
All NEOs received grants under Charter’s annual equity program on January 15, 2022 based on their long-term incentive opportunities then in effect. Messrs. Rutledge and Winfrey’s long-term incentive opportunities were as set forth in their
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amended and restated employment agreements dated October 27, 2020 and October 19, 2021, respectively. The individual grant values and equity mixes were as follows:
Executive | LTI Grant Guideline | Equity Mix | ||
Thomas M. Rutledge | $30.0 million | 100% stock options | ||
Christopher L. Winfrey | $10.0 million | 100% stock options | ||
Richard J. DiGeronimo | $8.0 million | 90% stock options / 10% RSUs | ||
David G. Ellen | $5.5 million | 90% stock options / 10% RSUs | ||
Jessica M. Fischer | $3.5 million | 90% stock options / 10% RSUs | ||
Jonathan Hargis | $3.5 million | 90% stock options / 10% RSUs |
7. | Established the 2022 annual incentive plan. |
Under Charter’s 2022 annual incentive plan design, for the full 2020 fiscal year, tied to the achievement of cable revenue, cable Adjusted EBITDA, and strategic objectives relating to Capital and Cash Flow Management and Charter’s Spectrum Mobile business. Mr. Rutledge’s annual incentive was also tied to additional strategic objectives relating to talent planning and the management of the Company’s operational and strategic response to the COVID-19 pandemic. The annual incentive plan provides each NEO the opportunityall NEOs were eligible to earn a cash incentive betweenranging from 0% to 150% of their target annual incentive opportunity, which is establishedset as a percentage of their annual base salary, based on actualsalary. Actual performance achievement against the plan’s financial metrics and strategic objectives.objectives determined the actual payouts received under the plan. The metrics, weightings and performance ranges were as follows:
Metric | Weighting (Executive Chairman) | Weighting (Other NEOs) | Threshold / Maximum (% of Target) | |||||||
Revenue | 10.0 | % | 20.0 | % | 97.6% / 101.0% | |||||
Adjusted EBITDA | 30.0 | % | 60.0 | % | 96.1% / 102.0% | |||||
Strategic Objectives | 60.0 | % | 20.0 | % | N/A |
Strategic objectives related to Capital and Free Cash Flow Management and the execution of Rural Digital Opportunity Fund (RDOF) and Subsidized Rural Builds Initiatives for all NEOs, with additional strategic objectives for the Executive Chairman relating to Talent Planning and Diversity and Inclusion efforts.
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For Mr. Rutledge, in advanceApart from the actions described above, there were otherwise no changes to the base salary, annual incentive and long-term incentive compensation for the NEOs. All of the expiration of his current employment agreement on May 17, 2021,2022 equity awards granted to the Company entered into an amended employment agreement with him effective October 27, 2020 and extending his term through December 31, 2024. The agreement provides for a transition negotiation period between August 15, 2022 and February 15, 2023, wherein Mr. Rutledge and the Company may mutually agree upon him transitioning to a new role or remaining in his current position as CEO through the end of the term. The agreement increases Mr. Rutledge’s base salary to $2.5 million as of the effective date, retains his current annual incentive opportunity of 300% of base salary, and provides for a grant of stock options on November 3, 2020 with a grant date fair value of $30 million and additional annual grants of stock options over 2021 through 2024, each also with a grant date fair value of $30 million and generally subject to his continued service as CEO through each date of grant. All stock option grants made under the agreementNEOs fully vest in full on the third anniversary of the respective date of grant and have(i.e., 3-year cliff vesting) with a 10-year term to exercise and thestock options. The number of stock options granted is based onequals the portion of the executive’s grant value allocated to stock options divided by the Black-Scholes value per stock option at grant. The number of RSUs granted equals the portion of the stock options at grant.
For Mr. Bickham, in advanceexecutive’s grant value allocated to RSUs divided by the grant price (the average of the expirationhigh and low prices of his current employment agreement on May 18, 2021, the Company entered into an amended employment agreement with him effective December 23, 2020. The amended agreement extends his term through December 31, 2022, during which he will continue to serve as President and Chief Operating Officer until assuming the role of Vice Chairman at a time between July 1, 2021 and December 31, 2021, with the specific date determined at the request of the CEO. For the period from January 1, 2022 through December 31, 2022 (the “Transition Period”) Mr. Bickham will devote fifty percent of his business time and efforts to the business and affairs of the Company. The agreement provides Mr. Bickham with a base salary of $1,875,000 for the period from January 1, 2021 through December 31, 2021 and a base salary of $937,500 during the Transition Period, retains his current annual incentive opportunity of 200% of base salary through December 31, 2022, and provides for a grant ofCharter common stock options on December 23, 2020 with a grant date fair value of $31.5 million. The stock options vest in full on December 31, 2022 and have a 10-year term to exercise, and the number of stock options granted is based on the Black-Scholes valuedate of the stock options at grant. grant).
See the “Employment Agreements” section below for additional information on the employment agreements for Messrs. Rutledge and Bickham.the NEOs.
For Messrs. Ellen and Winfrey, no changes were made to their base salary, annual incentive or long-term incentive opportunities. As participants in the 2016 Performance-based Program described above, Messrs. Ellen and Winfrey did not receive awards under the 2020 annual equity program in which most other senior executives, including Mr. DiGeronimo, participated. However, at the time the 2020 annual equity program was approved, the Committee also approved equity awards of $7.5 million and $9 million for Messrs. Ellen and Winfrey, respectively. These awards were granted at the same time annual grants occurred on January 15, 2020 and were otherwise structured the same as for other senior executives who participated in the annual equity program, with awards delivered in a mix of 90% stock options and 10% RSUs (with the number of awards granted being based on the Black-Scholes value of stock options at grant and the grant price of RSUs) and vesting in full on the third anniversary of the date of grant with a 10-year term to exercise stock options.
The Committee determined to make these 2020 equity awards for Messrs. Ellen and Winfrey based on several factors. First, the Committee considered the strong performance achievement to-date under the 2016 Performance-based Program in which Messrs. Ellen and Winfrey participated — over the period from May 18, 2016 through December 31, 2019, Charter’s stock price increased 113% yielding incremental market capitalization of $43.9 billion. Second, the Committee assessed the outstanding, unvested equity value that Messrs. Ellen and Winfrey were projected to realize under the 2016 Performance-based Program and the anticipated timing of when such value would vest. If Messrs. Ellen and Winfrey did not receive grants in 2020 with the 3-year cliff vesting schedule used in the annual equity program, they would not have any long-term equity awards eligible for vesting upon the 2022 expiration of the grants made under the 2016 Performance-based Program. In particular, at the time 2020 equity awards were approved for Messrs. Ellen and Winfrey, four of the five price hurdles under the 2016 Performance-based Program ($289.76, $364.97, $455.66, and $496.58) had already been achieved, and in September 2020 the fifth price hurdle ($564.04) was achieved. Based on Charter’s December 31, 2020 closing stock price of $661.55, which remains above the fifth price hurdle, there is the possibility that the remaining unvested awards under the program will be fully vested by mid-2021. The 2020 grants, along with subsequent awards under the annual equity program anticipated to occur in 2021 and 2022, therefore ensure that Messrs. Ellen and Winfrey have an appropriate amount of unvested equity value to motivate performance and provide continued alignment with shareholders as well as retention following the conclusion of the 2016 Performance-based Program.
For Mr. DiGeronimo, no changes were made to his base salary, annual incentive or long-term incentive opportunity, which have been in effect since the Company entered into an amended and restated employment agreement with him effective July 1, 2019 in connection with his promotion to Chief Product & Technology Officer. Since Mr. DiGeronimo participates in the Company’s annual equity program, the Committee approved an equity award of $4 million for him, which was granted on January 15, 2020 at the time annual equity awards were granted to all eligible employees. This award was delivered in a mix of
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90% stock options and 10% RSUs (with the number of awards granted being based on the Black-Scholes value of stock options at grant and the grant price of RSUs) and vests in full on the third anniversary of the date of grant with a 10-year term to exercise the stock options.
Compensation Actions in 20212023
In addition to the above, in December 20202022 the Committee approved a two-year renewal of Ms. Fischer’s employment agreement, increasing her base salary from $700,000 to $800,000 as of the February 5, 2023 effective date of her amended employment agreement and increasing her target long-term incentive opportunity from $3.5 million to $5.5 million as of the January 17, 2023 grant date for the Company’s 2023 annual equity program. At that time, the Committee also approved awards under the 2023 annual equity program for 2021, with awards under this program granted on January 15, 2021 to the NEOs (except Mr. Hargis who retired December 31, 2022) and all other eligible employees and including all NEOs except for Mr. Bickham.employees. Pursuant to the terms of their respective employment agreements, Mr. Rutledge received a grantan award of $30$15.0 million in stock options, Mr. Winfrey received an award of $17.0 million in stock options, and Mr. Bickham did not receiveDiGeronimo received an equity award as his grant for 2021 was includedof $10.0 million in the award made upon the executiona mix of his amended employment agreement on December 23, 2020. Messrs.90% stock options and 10% RSUs. Mr. Ellen and WinfreyMs. Fischer each received grantsan award of $5$5.5 million, and $6 million, respectively, and these representedbased on their first awards under the annual equity program since the commencement of the 2016 Performance-based Program (in which they participatedlong-term incentive opportunities in lieu of participation in the annual equity program for the period from 2016 through 2020). Mr. DiGeronimo received a grant of $4 million, the same value as he received in 2020. With the exception of Mr. Rutledge, whose grant was comprised entirely of stock options, grants to the NEOs under the annual equity program wereeffect and delivered in a mix of 90% stock options and 10% RSUs (with the number ofRSUs. All awards granted being based on the Black-Scholes value of stock options and the grant price of RSUs). All grants to the NEOs vest in full on the third anniversary of the January 17, 2023 grant date of grant with a 10-year term to exercise stock options. The number of stock options granted equals the portion of the executive’s grant value allocated to stock options divided by the Black-Scholes value per stock option at grant. The number of RSUs granted equals the portion of the executive’s grant value allocated to RSUs divided by the grant price (the average of the high and low prices of
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Charter common stock on the date of grant). The Committee has consistently authorized the annual equity awards to be effective in mid-January of each year and has not taken into account any fluctuations in Charter’s stock price with respect to the timing of the annual awards.
As the Company has recently committed to a number of multi-year transformational and industry-leading initiatives, the Committee also approved a new 2023 Performance-Based Equity Program (the “2023 Program”) in February. The 2023 Program is similar to the program the Company adopted in 2016, which was a five-year long-term incentive program designed to deliver value to executives only upon achieving sustained growth in the Company’s stock price corresponding to aggressive price targets.
The 2023 Program provides participants the opportunity to receive 5x their annual grant value, less the already issued January 2023 annual grant, up-front in a single performance award of 90% in stock options and 10% in RSUs that vest based on the achievement of both stock price hurdles as well as time-based vesting criteria ranging from 3 to 5 years following the grant date. All awards under the 2023 Program require the achievement of significant increases to Charter’s stock price by the sixth anniversary of the date of the grant in order to vest. The lowest price hurdle represents 28% stock price appreciation from $396.94, which was the closing stock price as of February 10, 2023, and the highest price hurdle of $1,000 represents 152% stock price appreciation from this level. The achievement of each stock price hurdle is determined based on the 60-trading day average closing stock price, and each tranche of stock options and RSUs will vest upon both the stock price hurdle and the time-based vesting criteria being satisfied.
Participants in the 2023 Program include Messrs. Winfrey and DiGeronimo and Ms. Fischer. Under the 2023 Program, Mr. Winfrey received an award valued at approximately $68.0 million, Mr. DiGeronimo received an award valued at approximately $40.0 million, and Ms. Fischer received an award valued at approximately $22.0 million. These awards were granted on February 22, 2023 with a grant price of $380.53, delivered 90% in the form of stock options and 10% in the form of RSUs, and subject to the following vesting conditions:
Price Hurdle Vesting Requirement | Approximate(1) % of Stock Options Vesting | Approximate(1) % of RSUs Vesting | ||||||||||||||||||||||
Eligible to Vest on or after 3rd Anniversary of the Grant Date | Eligible to Vest on or after 4th Anniversary of the Grant Date | Eligible to Vest on or after 5th Anniversary of the Grant Date | Eligible to Vest on or after 3rd Anniversary of the Grant Date | Eligible to Vest on or after 4th Anniversary of the Grant Date | Eligible to Vest on or after 5th Anniversary of the Grant Date | |||||||||||||||||||
$507 / $564(2) | 6.7 | % | 6.7 | % | 6.7 | % | — | — | — | |||||||||||||||
$639 | 6.7 | % | 6.7 | % | 6.7 | % | — | — | — | |||||||||||||||
$798 | 6.7 | % | 6.7 | % | 6.7 | % | 11.1 | % | 11.1 | % | 11.1 | % | ||||||||||||
$870 | 6.7 | % | 6.7 | % | 6.7 | % | 11.1 | % | 11.1 | % | 11.1 | % | ||||||||||||
$988 | 3.3 | % | 3.3 | % | 3.3 | % | 5.6 | % | 5.6 | % | 5.6 | % | ||||||||||||
$1,000 | 3.3 | % | 3.3 | % | 3.3 | % | 5.6 | % | 5.6 | % | 5.6 | % |
(1) | Percentages may not sum to 100% due to rounding. |
(2) | For Mr. Winfrey who participated in the similar performance-based award program in 2016, the lowest stock price hurdle for awards under the 2023 Program is $564, which is equivalent to the highest stock price hurdle under the 2016 awards. |
All stock options granted under the 2023 Program have a 10-year term to exercise, and the number of stock options and RSUs granted to each participant was determined based upon: (i) the target grant value of the award, (ii) the value per each stock option and RSU for each tranche, as calculated by a Monte Carlo model of the value of such awards, and (iii) the number of stock options and RSUs required to deliver the grant value such that 90% of the total combined number of RSUs and options granted was comprised of stock options and 10% of the total combined number of RSUs and options granted was comprised of RSUs.
By combining equity award value that would ordinarily be granted in future years into a single grant and tying such value to the achievement of significant stock price growth objectives, Charter believes that the 2023 Program will create a strong incentive for participants to generate sustained, long-term shareholder value. In particular, the size and length of the program aligns with Charter’s multi-year growth initiatives – including network expansion in both rural and existing markets and network evolution to providing converged gigabit connectivity – the successful execution of which are expected to drive stock price growth. Furthermore, no awards under the 2023 Program are eligible to vest in connection with any termination, except upon death or disability or for an involuntary termination without cause or resignation for good reason following a change in control; in each case, only award tranches for which the price hurdle is satisfied at the time of termination are eligible to vest. The lack of accelerated vesting upon any involuntary termination or voluntary resignation outside of a change in control, death or disability where price hurdles have been achieved is an important shareholder protection mechanism and ensures that
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participants only recognize value from the program in connection with the achievement of price appreciation over a multi-year time horizon.
At the same time that awards under the 2023 Program were approved, the Committee also approved amendments to the employment agreements for Mr. Winfrey and Mr. DiGeronimo, removing references to future annual equity grants to be provided under such agreements.
Process for Determining Executive Compensation
Role of the CEO and Compensation and Benefits Committee
The Compensation and Benefits Committee of our Board of Directors is responsible for overseeing our overall compensation structure, policies and programs and assessing whether our compensation structure results in appropriate compensation levels and incentives for executive management.
PayThe Committee determines the pay levels for our NEOs are determined by the Committeein consideration of a number of factors and within the framework of the Company’s compensation philosophy, as described below, and in consideration of a number of factors, includingbelow. Factors considered include each individual’s rolesrole and responsibilities within Charter, the individual’s experience and expertise, pay levels for comparable peer positions both within Charter and in the competitive marketplace, and performance of the individual and Charter as a whole. In determining thesesetting pay levels for each element of compensation, the Compensation and Benefits Committee considers all forms of compensation and benefits. benefits and the resulting impact on total value delivered to the executive.
Each year, the CEO reviews the performance of each of the other NEOs and recommends both compensation adjustments based on overall competitiveness and effectiveness of the compensation program as well as actual bonus payouts under the annual incentive plan in light of performance against the objectives approved by the Committee. The Committee regularly meets in executive session to consider these matters, and while the Committee considers the CEO’s recommendations along with analysis provided by the Committee’s compensation consultant, it retains full discretion to set all compensation for our NEOs other than the CEO. With respect to the CEO, the Committee recommends the CEO’s compensation to Charter’s full Board of Directors, with non-employee directors voting on the approval of any recommendations, subject to any employment agreements.
Role of the Independent Compensation Consultant
The Committee has retained Semler Brossy Consulting Group, LLC (“Semler Brossy”) to serve as its independent compensation consultant and assist in fulfilling its responsibilities. Semler Brossy is engaged by and reports directly to the Committee, providing recommendations and advice related to all aspects of Charter’s executive compensation program. As necessary, Semler Brossy works with management to obtain information necessary to develop their recommendations.
During the year ended December 31, 2020,2022, Semler Brossy provided no services to Charter other than those provided directly to or for the benefit of the Committee, including: attending meetings; providing information, research and analysis pertaining to executive compensation programs; conducting a comprehensive assessment of our annual executive compensation program relative to our peer groups and broader industry data; updating the Committee on market trends and changing practices; and advising on the design of the executive compensation program and the reasonableness of individual compensation targets and awards.awards; and providing assistance in the appointment of a new CEO and the associated transitions of other executives, including competitive information on pay levels and contract terms. The Committee has determined that there was no conflict of interest between its compensation consultant and the Committee during the year ended December 31, 2020.2022.
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Compensation Philosophy and Competitive Positioning
The Committee applies the following pay philosophy for purposes of setting NEO compensation and designing annual and long-term incentive programs that motivate the performance and retention of our NEOs:
1. | Base salary, |
2. | Annual incentive design that rewards the achievement of meaningful year-over-year growth in revenue and Adjusted EBITDA and the execution of key strategic objectives for the |
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3. | Long-term equity |
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Structured to not deliver any value for performance below 30% stock price growth over a six-year period
Potential value realizable by participants targeted at the median of the compensation peer group when stock price growth reaches approximately 70% over a six-year period
Potential value realizable by participants targeted to reach or exceed the 75th percentile of the compensation peer group when stock price growth is at or above approximately 125% over a six-year period
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Long-term incentive grant value targeted at or above the median of the peer group, delivered in a mix of RSUs and stock options (with Mr. Rutledge’s award being 100% stock options), vesting 100% after a three-year period
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Long-term incentive grant value targeted at or above the median of the peer group, delivered 100% in stock options, vesting 100% on December 31, 2022
Compensation Peer GroupGroups
The Committee maintains a Primary Peer Group and Secondary Peer Group and examines Charter’sthese peer groupgroups on an annual basis. The Committee uses the following criteria to identify peers:members of the Primary Peer Group:
• | North American publicly traded companies, in particular internet providers and organizations in the video programming distribution, wireless communication or advertising spaces |
• | Size: Approximately $13 billion to $204 billion in annual revenue (0.25x to 4.0x Charter’s revenue) |
• | Relevant Industries: Cable & Satellite, Integrated Telecommunication Services and Wireless Telecommunications, Movies & Entertainment and Broadcast |
In addition to the Primary Peer Group, the Committee also examines the executive compensation practices of other larger publicly traded, consumer-oriented companies, in particular internet providers and organizations inwhich compose the video programming distribution, wireless communication or advertising spacesSecondary Peer Group.
Size: Approximately $11 billion to $183 billion in annual revenue (0.25x to 4.0x the combined Company’s revenue)
Relevant Industries: Cable & Satellite, Integrated Telecommunication Services and Wireless Telecommunications, Movies & Entertainment and Broadcast
In 2020,2022, the Committee reviewed the composition of the peer groupgroups, including the impact of merger and approved fouracquisition activity on companies within the groups, and determined that no changes to theeither peer group: the removal of 21st Century Fox following its acquisition by The Walt Disney Company, the addition of Fox Corporation, the inclusion of ViacomCBS following the merger of Viacom Inc. and CBS Corporation, and the removal of Sprint following its merger with T-Mobile US, Inc..group were necessary.
Primary Peer Group | ||||||
AT&T Inc. | DISH Network Corp. | Netflix, Inc. | ||||
Cisco Systems, Inc. | Fox Corp. | The Walt Disney Company | ||||
Comcast Corporation | Liberty Global Plc | T-Mobile US, Inc. | ||||
Warner Bros. Discovery, Inc. | Lumen Technologies, Inc. | Verizon Communications Inc. |
Charter Communications | 32 | 2021 Proxy Statement
In addition to the peer group, the Committee also examines the executive compensation practices of other larger publicly traded, consumer-oriented companies, which compose the secondary peer group. Based upon a review of the secondary peer group, which has not been changed since 2016, the Committee approved the removal of FedEx and Macy’s — which have had their ratio of market capitalization to revenue fall below a targeted range for such peers — and the addition of IBM and Raytheon – which met the financial and other qualitative criteria considered for secondary peers.
Secondary Peer Group | ||||||
IBM | ||||||
The Kraft Heinz Co. | ||||||
Philip Morris International, Inc. | ||||||
Procter & Gamble Co. | ||||||
Caterpillar | Mondelez International, Inc. | Qualcomm | ||||
Gilead Sciences, Inc. | Nike, Inc. | Raytheon Technologies | ||||
Honeywell International, Inc. | PepsiCo, Inc. | The Coca-Cola Co. |
Base Salary
We setCharter sets base salaries with regard to the level of the individual’s position with Charter and the individual’s current and sustained performance results. The Committee annually reviews base salary levels for the NEOs and determines any necessary changes in those salary levels. Adjustments to base salary levels may be based on factors such as new roles and responsibilities assumed by the executive or the executive’s impact on our then-current goals and business objectives. Salary adjustmentsThe Committee may also be based on changesmake salary adjustments in consideration of competitive market pay levels for comparable positions in the competitive market for executive talent.positions.
Charter does not apply specific weighting to any one factor in setting the level of salary, and the process ultimately relies on the Committee’s judgment. Although we generally target salaries at market median compared to an industry peer group and other compensation survey data for experienced executives, the Committee may also take into account historical compensation, potential as a key contributor, and special recruiting or retention situations when deciding to set salaries for individual executives relative to market median pay levels. Consistent with our pay philosophy and taking into consideration the factors set forth above, salary increases are neither automatic nor the same for each individual.
The Committee reviewed base salaries for our NEOs leading up to and over the course of 2020, approving an increase in2022, providing base salary adjustments for Messrs. Rutledge, Winfrey and DiGeronimo as part of the CEO transition process. Mr. Rutledge’s base salary decreased from $2,000,000$2.5 million to $2,500,000$1.25 million effective December 1, 2022 pursuant to the terms of his amended and restated employment agreement effective as of such date and in connection with his transition to the role of Executive Chairman.
Charter Communications | 32 | 2023 Proxy Statement
Mr. Winfrey’s base salary increased from $1.25 million to $1.7 million effective September 20, 2022 pursuant to the terms of his amended and restated employment agreement executed as of such date and in connection with his December 1, 2022 promotion to President and CEO. Mr. DiGeronimo’s base salary increased from $1.25 million to $1.45 million effective September 20, 2022 pursuant to the terms of his employment agreement executed as of such date and in connection with his December 1, 2022 promotion to President, Product & Technology. Mr. Hargis’s base salary decreased from $700,000 to $350,000 effective April 1, 2022 in connection with the amendment ofto his employment agreement and withhis transition to the role of Special Advisor to the COO also effective as of such increase effective October 27, 2020 (the effective date of his amended employment agreement). Mr. Rutledge’sdate. In determining the base salary had been atadjustments for Messrs. Winfrey, Rutledge, DiGeronimo, and Hargis, the $2,000,000 level since he joinedCommittee considered a number of factors, including their excellent performance and contributions to the Company, changes to their responsibilities in 2012. The Committee also approved an increase in Mr. Bickham’s salary from $1,500,000 to $1,875,000, effective January 1, 2021their new or expanded roles, and therefore not reflected in the table below. For both Mr. Rutledge and Mr. Bickham, these salary increases were in consideration of their contributions as key leaders of the Company,market compensation levels observed for comparable rolespositions among peer companies, the exceptional performance delivered over their respective tenures at Charter, and the desire by the Company to extend the terms of their employment.organizations. For our other NEOs, the Committee determined that no base salary adjustments were necessary at this time.
Executive Officer | 2020 Base Salary | Change from Prior Year | ||||
Thomas M. Rutledge | $ | 2,500,000 | * | 25.0% increase (from $2,000,000) | ||
John Bickham | $ | 1,500,000 | ** | None | ||
Rich DiGeronimo | $ | 1,000,000 | None | |||
David G. Ellen | $ | 1,250,000 | None | |||
Christopher L. Winfrey | $ | 1,000,000 | None |
|
|
Executive Officer | Base Salary as of December 31, 2022 | Change from Prior Year | ||||
Thomas M. Rutledge | $ | 1,250,000 | 50.0% decrease from $2,500,000 effective December 1, 2022 | |||
Christopher L. Winfrey | $ | 1,700,000 | 36.0% increase from $1,250,000 effective September 20, 2022 | |||
Richard J. DiGeronimo | $ | 1,450,000 | 16.0% increase from $1,250,000 effective September 20, 2022 | |||
David G. Ellen | $ | 1,250,000 | None | |||
Jessica M. Fischer | $ | 700,000 | None | |||
Jonathan Hargis | $ | 350,000 | 50.0% decrease from $700,000 effective April 1, 2022 |
Charter Communications | 33 | 2021 Proxy Statement
Annual Incentive Plan
Charter has established the Annual Incentive Plan for the NEOs to provide a cash-based incentive whichthat rewards the achievement of strong annual operational and financial results.results and drives annual progress for key strategic objectives. Each year, the actual amount of compensation earned by participants under the plan is dependent upon performance against pre-established objectives which are set and approved by the Committee. TheIn determining the particular performance metrics under the plan, are selected based onthe Committee selects what the Committeeit believes to be the best annual financial and operational metrics that support long-term success and are most closely tiedwith the strongest linkage to the creation of shareholder value.value creation. When establishing the particular threshold, target and maximum performance objectives for each plan metric, the Committee seeks to set goals that represent challenging but attainable year-over-year improvement in Company performance.
For fiscal year 2020,2022, the Annual Incentive Plan for our NEOs was based onutilized both key financial measures of top and bottom-line performance as well as strategic objectives that representrepresented operating priorities important to the success of Charter’s business. The financial metrics under the plan were cabletotal revenue (weighted 12.5%10% for Mr. Rutledge and 20% for the other NEOs) and cabletotal Adjusted EBITDA (weighted 37.5%30% for Mr. Rutledge and 60% for the other NEOs). Mr. Rutledge’sThe strategic objectives relatedthat applied to Talent Planning,all NEOs under the management of the COVID-19 pandemic, the Company’s Mobile product, and Capital and Free Cash Flow Management (collectively weighted 50%). For the other NEOs, the strategic objectives related to the Company’s Mobile product (weighted 10%) andplan were Capital and Free Cash Flow Management (weighted 5% for Mr. Rutledge and 10% for the other NEOs) and the execution of RDOF and Subsidized Rural Builds Initiatives (weighted 5% for Mr. Rutledge and 10% for the other NEOs). The strategic objectives that applied only to Mr. Rutledge’s incentive award related to Talent Planning (weighted 40%) and Charter’s Diversity and Inclusion efforts (weighted 10%). The Committee weighted a substantial proportion of Mr. Rutledge’s annual incentive to these additional strategic objectives, particularly with respect to Talent Planning, given his overall leadership in the successful transition of the CEO role over the course of 2022 and building a strong and diverse talent pipeline.
Payouts under the Annual Incentive Plan were set to range from 60% to 150% of each NEO’s target annual incentive opportunity based on the actual performance achieved against the Committee-approved goals for each metric. The Committee also has the discretion to increase or decrease payouts under the Annual Incentive Plan based on organizational considerations, such as acquisitions or significant transactions and performance considerations, such as changes in products or markets and other unusual, unforeseen or exogenous situations.
Charter’s 2020 cable2022 revenue and cable Adjusted EBITDA results both fell below targeted levels under the Annual Incentive Plan, but still represented strong year-over-year growth especiallywithin the incentive payout ranges. Revenue achievement resulted in lighta payout of the COVID-19 pandemic. The Committee considered the financial impact to the Company from COVID-19 by reviewing the financial impacts disclosed to the Company’s investors since the beginning63.22% of the pandemic. Given the extraordinary efforts of managementtarget and the approximately 15,700 employees receiving bonuses based entirely or in part on the achievement of the performance metrics, the net gains in the number of customers resulting from these efforts, and the strong performance of the Company while facing the pandemic and the multitude of adjustments required in the operations of the Company, the Committee determined to adjust the achievement of the cable revenue and cable Adjusted EBITDA performance metrics for the COVID-19 impacts, with adjustments capped such that adjusted results could not exceed 100%achievement resulted in a payout of target for either metric. Factoring in these adjusted results, cable revenue achievement fell between threshold and target performance levels,62.67% of target.
Charter Communications | 3433 | 20212023 Proxy Statement
resulting in aIn determining payout of 91.78% of target, and cable Adjusted EBITDA achievement was at target, resulting in a payout of 100% of target. Thelevels for the strategic objectives, the Committee considered the below COVID-19 impacts toevaluated the Company’s cable revenue and cable Adjusted EBITDA:2022 performance achievement for these objectives, considering the following:
$ Millions | YTD* |
| ||||
Residential | $ | (315 | ) | • Residential – Customer credits related to canceled sporting events, revenue write-offs for KAC and state mandated non disconnect rules and lower PPV/VOD | ||
SMB | (36 | ) | • SMB – Lost revenue for incremental customers put on seasonal and hospitality plans and SMB revenue write-off for KAC | |||
Enterprise | (18 | ) | • Enterprise – Lost revenue for hospitality customers that were allowed to reduce or suspend service for up to 90 days when combined with contract extension | |||
Advertising Sales | (288 | ) | • Advertising Sales – Canceled advertising from local and SMB client mix | |||
|
| |||||
Cable Revenue Impact | (657 | ) | ||||
Programming | $ | 163 | • Programming – Eliminates benefit recognized for estimated rebates from sports networks | |||
Reg., Connect. and Prod. Cont. | 217 | • Regulatory, Connectivity and Produced Content – Eliminates benefit for Dodgers for canceled portion of MLB season, fewer Lakers games due to canceled 2020 games and deferred start to 2020 – 2021 season, lower franchises fees and other content rebates | ||||
Cost to Svc. Cust. – Bad Debt | 163 | • Cost to Service Customers – Bad Debt – Lower expense from better collections and recoveries and revenue write-offs versus the company’s pre-COVID-19 forecast | ||||
Cost to Svc. Cust. – Labor | (247 | ) | • Cost to Service Customers – Labor – Includes the impact of wage rate increase and associated benefits for Field Ops, Care and Network Ops, COVID-19 flex time benefit, and incremental contractors | |||
Marketing | 15 | • Marketing – Eliminates labor benefit (primarily payroll tax credits less COVID-19 flex) and deferred marketing | ||||
Other | 89 | • Other Impacts – Eliminates benefits from lower Ad Sales Cost of Sales fees, lower travel expense and programming savings (from COVID-19 revenue impacts), partially offset by higher COVID-19-related office cleaning and PP&E | ||||
|
| |||||
Expense Impact | $ | 400 | ||||
Cable Adjusted EBITDA Impact | $ | (257 | ) |
• |
|
The capping of the cable Adjusted EBITDA payout at 100% of target resulted in a COVID-19 adjustment of $67 million to the cable Adjusted EBITDA metric rather than the full $257 million of COVID-19 impacts. Cable revenue was adjusted for the full amount of the $657 million of COVID-19 impacts.
• | Achieved important milestones for Charter’s rural construction initiative beyond construction such as the walking out of the build plan. |
The Committee also evaluated the Company’s 2020 performance achievement
• | Effectively navigated supply chain disruptions to achieve supply levels that were at or above target for most equipment types. |
• | Effectively managed free cash flow supporting Charter’s share repurchase strategy while managing a higher interest rate environment. |
• | For Mr. Rutledge, the management of Charter’s talent planning and development efforts, in particular with respect to the transition of the CEO role, and achievements relating to advancing Charter’s diversity and inclusion goals. |
With respect to the strategic objectives that applied for all NEOs, the NEOs, considering the following:
Mobile operational objectives were exceeded in spiteCommittee approved payouts of a difficult environment. Key achievements included growing to nearly 2.4 million mobile lines, becoming the fastest growing mobile provider in the United States, completing a new mobile virtual network operator (“MVNO”) amendment, added new or upgraded mobile store openings, and participating in the FCC CBRS spectrum auction.
Charter Communications | 35 | 2021 Proxy Statement
The effective management of capital expenditure in light of accelerated growth (492,000 customers above plan) and additional investments necessary in order to support higher network demand and costs from supply chain and environment disruptions.
Free cash flow that was favorable to budget and that was $2.5 billion greater than 2019, representing a 53.4% increase year-over-year.
For Mr. Rutledge, the management of the Company’s talent over the course of the year and achievements associated with managing business operations and implementing strategies in response to the COVID-19 pandemic, including acceleration of the self-installation program, adoption of self-help tools by customers, implementation of remote working strategies, and the successful response to and engagement with various government agencies and officials throughout the pandemic.
For NEOs other than the CEO, a payout of 110.00% was approved with respect to the Mobile product strategic objective and a payout of 115.00% was approved with respect to120% for the Capital and Free Cash Flow Management objective and 150% for the RDOF and Subsidized Rural Builds Initiatives strategic objective. For Mr. Rutledge’sobjective, resulting in an overall strategic objectives which included additional objectives relating to talent planning and the managementpayout of the Company’s response135% for NEOs except Mr. Rutledge. With respect to the COVID-19 pandemic,additional strategic objectives that applied for Mr. Rutledge only, the Committee determined thatapproved a combined payout of 103.00% was appropriate.100% for the Talent Planning and Diversity and Inclusion objectives, resulting in an overall strategic objectives payout of 105.83% when combined with payouts for the strategic objectives that applied for all NEOs. The resulting overall annual incentive payouts were 100.47%88.62% of Mr. Rutledge’s target annual incentive and 100.86%77.24% of the target annual incentive for the other NEOs; withoutNEOs. The tables below detail theCOVID-19 adjustments and assuming the Committee would not have made a different determination on the performance of the strategic objectives, the payouts would have been 96.24% of target and 94.09% of target, respectively. The annual incentive calculations for Mr. Rutledge and the other NEOs are detailed in the tables below.NEOs.
20202022 Annual Incentive Payout – CEOMr. Rutledge
Metric | Target ($ million) | Performance ($ million) | Payout % | Weighting | Weighted % | |||||||||||||||
Cable Revenue | $ | 47,625 | $ | 47,390 | 91.78 | % | 12.5 | % | 11.47 | % | ||||||||||
Cable Adjusted EBITDA | $ | 18,986 | $ | 18,986 | 100.00 | % | 37.5 | % | 37.50 | % | ||||||||||
CEO Objectives | Discretionary Assessment | 103.00 | % | 50.0 | % | 51.50 | % | |||||||||||||
Total | 100.0 | % | 100.47 | % |
Metric | Target ($ million) | Performance ($ million) | Payout % | Weighting | Weighted % | |||||||||||||||
Revenue | $ | 53,808 | $ | 52,621 | 63.22 | % | 10.0 | % | 6.32 | % | ||||||||||
Adjusted EBITDA | $ | 22,321 | $ | 21,509 | 62.67 | % | 30.0 | % | 18.80 | % | ||||||||||
Strategic Objectives | Discretionary Assessment | 105.83 | % | 60.0 | % | 63.50 | % | |||||||||||||
Total | 100.0 | % | 88.62 | % |
20202022 Annual Incentive Payout – All Other NEOs
Metric | Target ($ million) | Performance ($ million) | Payout % | Weighting | Weighted % | Target ($ million) | Performance ($ million) | Payout % | Weighting | Weighted % | ||||||||||||||||||||||||||||||
Cable Revenue | $ | 47,625 | $ | 47,390 | 91.78 | % | 20.0 | % | 18.36 | % | ||||||||||||||||||||||||||||||
Cable Adjusted EBITDA | $ | 18,986 | $ | 18,986 | 100.00 | % | 60.0 | % | 60.00 | % | ||||||||||||||||||||||||||||||
Revenue | $ | 53,808 | $ | 52,621 | 63.22 | % | 20.0 | % | 12.64 | % | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 22,321 | $ | 21,509 | 62.67 | % | 60.0 | % | 37.60 | % | ||||||||||||||||||||||||||||||
Strategic Objectives | Discretionary Assessment | 112.50 | % | 20.0 | % | 22.50 | % | Discretionary Assessment | 135.00 | % | 20.0 | % | 27.00 | % | ||||||||||||||||||||||||||
Total | 100.0 | % | 100.86 | % | 100.0 | % | 77.24 | % |
Note: Cable revenue and Cable Adjusted EBITDA were adjusted as described above for purposes of calculating bonus attainments. Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to non-controlling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, loss on extinguishment of debt, (gain) loss on financial instruments, net, other pension (benefits) costs, net, other (income) expense,income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. For purposes of calculating bonus attainment, revenue does not include mobile device related or RDOF subsidy revenue, and Adjusted EBITDA does not include such revenue or mobile device and RDOF related expenses. Capital Management is an after-the-fact, objective evaluation of our capital spend by the Committee.
TargetEach NEO has a target annual incentive opportunities areopportunity set as a percentage of eachthe NEO’s base salary. In setting opportunities for our NEOs each year, the Committee reviews current opportunities relative to those among peer group companies and also evaluates criteria with
Charter Communications | 34 | 2023 Proxy Statement
respect to each NEO’s particular role, including changes in scope and complexity, impact on Company strategy,
Charter Communications | 36 | 2021 Proxy Statement
and degree of enterprise-wide influence. For 2020,During 2022, the Committee increased Mr. Winfrey’s target annual incentive from 160% of base salary to 250% of base salary effective September 20, 2022 in connection with his promotion to President and CEO, and the Committee increased Mr. DiGeronimo’s target annual incentive from 160% of base salary to 200% of base salary effective September 20, 2022 in connection with his promotion to President, Product & Technology; the full year target annual incentive opportunities for Messrs. Winfrey and DiGeronimo were prorated based on the portion of the year for which each respective target annual incentive percentage was in effect. In addition, pursuant to his amended and restated employment agreement, Mr. Rutledge’s 2022 target annual incentive was prorated to reflect the reduction in his base salary from $2,500,000 to $1,250,000 effective December 1, 2022 (with no change to his target annual incentive as a percentage of base salary), and, pursuant to the amendment to his employment agreement, Mr. Hargis’s 2022 target annual incentive was prorated to reflect the reduction in his base salary from $700,000 to $350,000 effective April 1, 2022 (also with no change to his target annual incentive as a percentage of base salary). The Committee otherwise determined that no annual incentive adjustments were necessary for our other NEOs as current opportunities continued to be competitive and appropriate for their roles. TargetThe table below summarizes the 2022 target annual incentive opportunities and actual incentive payouts based on the performance achievement detailed above, are summarized below for each of our NEOs.
Target Annual Incentive | Annual Incentive | Target Annual Incentive | Annual Incentive | |||||||||||||||||||||||||||||||||||||
Executive Officer | Base Salary | % of Base Salary | $ Value | % of Target | $ Value | Base Salary | % of Base Salary | $ Value | % of Target | $ Value | ||||||||||||||||||||||||||||||
Thomas M. Rutledge | $ | 2,500,000 | 300 | % | $ | 6,270,492 | * | 100.47 | % | $ | 6,299,963 | $ | 1,250,000 | 300 | % | $ | 7,181,507 | (1) | 88.62 | % | $ | 6,364,251 | ||||||||||||||||||
John Bickham | $ | 1,500,000 | 200 | % | $ | 3,000,000 | 100.86 | % | $ | 3,025,800 | ||||||||||||||||||||||||||||||
Christopher L. Winfrey | $ | 1,700,000 | 250 | % | $ | 2,634,932 | (2) | 77.24 | % | $ | 2,035,221 | |||||||||||||||||||||||||||||
Richard J. DiGeronimo | $ | 1,000,000 | 160 | % | $ | 1,600,000 | 100.86 | % | $ | 1,613,760 | $ | 1,450,000 | 200 | % | $ | 2,253,973 | (3) | 77.24 | % | $ | 1,740,968 | |||||||||||||||||||
David G. Ellen | $ | 1,250,000 | 160 | % | $ | 2,000,000 | 100.86 | % | $ | 2,017,200 | $ | 1,250,000 | 160 | % | $ | 2,000,000 | 77.24 | % | $ | 1,554,800 | ||||||||||||||||||||
Christopher L. Winfrey | $ | 1,000,000 | 160 | % | $ | 1,600,000 | 100.86 | % | $ | 1,613,760 | ||||||||||||||||||||||||||||||
Jessica M. Fischer | $ | 700,000 | 150 | % | $ | 1,050,000 | 77.24 | % | $ | 811,020 | ||||||||||||||||||||||||||||||
Jonathan Hargis | $ | 350,000 | 150 | % | $ | 654,452 | (4) | 77.24 | % | $ | 505,499 |
Represents Mr. Rutledge’s target annual incentive amount |
(2) | Represents Mr. Winfrey’s target annual incentive amount prorated based on his base salary of $1,250,000 and target annual incentive of 160% of base salary in effect from January 1, 2022 through September 19, 2022 and his base salary of $1,700,000 and target annual incentive of 250% of base salary in effect as of September 20, 2022. |
(3) | Represents Mr. DiGeronimo’s target annual incentive amount prorated based on his base salary of $1,250,000 and target annual incentive of 160% of base salary in effect from January 1, 2022 through September 19, 2022 and his base salary of $1,450,000 and target annual incentive of 200% of base salary in effect as of September 20, 2022. |
(4) | Represents Mr. Hargis’s target annual incentive amount prorated based on his base salary of $700,000 and target annual incentive of 150% of base salary in effect from January 1, 2022 through March 31, 2022 and his base salary of $350,000 and target annual incentive of 150% of base salary in effect as of April 1, 2022. |
The CEO isCommittee also authorized by the CommitteeMr. Winfrey as CEO to make discretionary bonus awards of up to 5% of the total projected Annual Incentive Plan payout based on actual achievement against the approved performance objectives. DiscretionaryManagement recommends discretionary bonus awards are recommended by management based upon management’s judgment of a participant’s performance and contribution to the Company, and such awards are in addition to payments made under the Annual Incentive Plan. For 2020,2022, none of the NEOs received any portion of this 5% discretionary bonus allocation.
Long-Term Incentives
Charter’s long-term incentive awards are designed to alignprogram aligns the interests of the NEOs with those of our stockholders by linking a significant portion of NEO compensation to sustained growth in the Company’s stock price over multi-year periods. Long-termThe Committee establishes long-term incentive designs and opportunities are established by the Committee in consideration of each NEO’s level within the organization, the nature of their particular role and job responsibilities, the desired mix of short and their long-term incentive compensation, retention and succession planning considerations, the executive’s line-of-sight to our stock price performance.performance, and competitive pay levels observed among peer and general industry organizations. Since 2016,2021, all NEOs have participated in the Company’s annual equity program, which provides awards in a mix of stock options and RSUs (with the particular mix determined by the participant’s level), and awards vest in full on the third anniversary of the grant date.
Charter Communications | 35 | 2023 Proxy Statement
For each NEO, the Committee has administered twodetermines their long-term incentive program designsopportunity and approves annual equity grants based on that opportunity. Charter grants annual equity awards to all eligible participants in mid-January (the “annual grant date”). For any changes to long-term incentive opportunities occurring during the year after the annual grant date, the Committee generally also approves additional off-cycle equity awards based on the difference between the NEO’s new and prior opportunities and prorates the award value delivered based on the timing of the change. Prorated award guidelines range from 100% of the value difference for our NEOs, based upon their corresponding level within Charter.
Messrs. Rutledge, Bickham, Ellen and Winfrey participatechanges occurring in the 2016 Performance-based Program.first quarter to 25% for changes occurring in October or November, and in certain circumstances the Committee may provide for a different off-cycle award amount in order to ensure that such award delivers the appropriate amount of retentive value and alignment with long-term performance.
Mr. Rutledge received a grant of $30.0 million in stock options on the January 15, 2022 annual grant date, based on his long-term incentive opportunity set forth in his then current employment agreement. Mr. Rutledge’s amended and restated employment agreement, executed on September 20, 2022, reduced his long-term incentive opportunity to $15.0 million effective December 1, 2022 in connection with his transition to Executive Chairman and which will apply for his 2023 annual equity award. The Committee approveddetails of Mr. Rutledge’s 2022 grant are as follows:
Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||||
January 15, 2022 | $ | 30,000,000 | 100% Stock Options | $ | 588.825 | 172,067 | — |
Mr. Winfrey first received an equity awards under this programgrant of $10.0 million in 2016,stock options on the January 15, 2022 annual grant date, based on his long-term incentive opportunity set forth in his then current employment agreement. Mr. Winfrey’s amended and restated employment agreement, executed on September 20, 2022, increased his long-term incentive opportunity to $17.0 million effective December 1, 2022 in connection with his promotion to President and CEO and provided for an additional equity grant of $2.0 million in stock options to be granted on September 22, 2022. The details of Mr. Winfrey’s 2022 grants are as follows:
Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||||
January 15, 2022 | $ | 10,000,000 | 100% Stock Options | $ | 588.825 | 57,356 | — | |||||||||||
September 22, 2022 | $ | 2,000,000 | 100% Stock Options | $ | 342.235 | 17,073 | — | |||||||||||
Total | $ | 12,000,000 | 74,429 | — |
Mr. DiGeronimo first received a grant of $8.0 million, delivered in 90% stock options and 10% RSUs, granted on the January 15, 2022 annual grant date and based on his long-term incentive opportunity in effect at that time. Mr. DiGeronimo’s employment agreement, executed on September 20, 2022, increased his long-term incentive opportunity to $10.0 million, to be delivered in a mix of 90% stock options and 10% restricted stock units. These awards vest subjectRSUs and effective December 1, 2022 in connection with his promotion to the achievementPresident, Product & Technology. The agreement also provided for an additional equity grant of pre-established stock price hurdles with additional time-based vesting applying over a minimum of 3 to 5 years after grant; if a stock price hurdle is not met within 6 years after grant, the associated award tranche is forfeited. As discussed above in the section on compensation actions for 2020, Messrs. Rutledge and Bickham received equity awards in 2020 relating to the amendment of their employment agreements and Messrs. Ellen and Winfrey received equity awards in 2020 in consideration of performance achieved to-date under the 2016 Performance-based Program and the need to create ongoing incentives and retention by ensuring that they had sufficient outstanding unvested equity value as awards under the program vest.
For Mr. DiGeronimo, the Committee determined that he should continue to participate in the Company’s annual equity program for 2020, commensurate with other executives at the same level. This program provides participants an annual long-term incentive award, the value and mix of which is based on the executive’s level,$800,000 (also delivered in a mix of90% stock options and restricted10% RSUs) to be granted on September 22, 2022. The details of Mr. DiGeronimo’s 2022 grants are as follows:
Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||||
January 15, 2022 | $ | 8,000,000 | 90% Stock Options / 10% RSUs | $ | 588.825 | 41,296 | 1,359 | |||||||||||
September 22, 2022 | $ | 800,000 | 90% Stock Options / 10% RSUs | $ | 342.235 | 6,146 | 234 | |||||||||||
Total | $ | 8,800,000 | 47,442 | 1,593 |
Mr. Ellen received a grant of $5.5 million, delivered in 90% stock unitsoptions and 10% RSUs, granted on the January 15, 2022 annual grant date and based on his long-term incentive opportunity in effect at that time. The details of Mr. Ellen’s 2022 grant are as follows:
Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||||
January 15, 2021 | $ | 5,500,000 | 90% Stock Options / 10% RSUs | $ | 588.825 | 28,391 | 934 |
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Ms. Fischer received a grant of $3.5 million, delivered in 90% stock options and 10% RSUs, granted on the January 15, 2022 annual grant date and based on her long-term incentive opportunity in effect at that time. The details of Ms. Fischer’s 2022 grant are as follows:
Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||||
January 15, 2022 | $ | 3,500,000 | 90% Stock Options / 10% RSUs | $ | 588.825 | 18,067 | 594 |
Mr. Hargis received a grant of $3.5 million, delivered in 90% stock options and 10% RSUs, granted on the January 15, 2022 annual grant date and based on his long-term incentive opportunity in effect at that time. The details of Mr. Hargis’s 2022 grant are as follows:
Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||||
January 15, 2022 | $ | 3,500,000 | 90% Stock Options / 10% RSUs | $ | 588.825 | 18,067 | 594 |
All 2022 equity grants made to the NEOs vest fullyin full on the third anniversary of the date of grant.
Charter Communications | 37 | 2021 Proxy Statement
Details regarding 2020 equity awards to the NEOs are provided below.
Executive Officer | Grant Date | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | ||||||||||||||
Thomas M. Rutledge | November 3, 2020 | $ | 30,000,000 | 100% Stock Options | $ | 597.16 | 195,022 | — | ||||||||||||
John Bickham | December 23, 2020 | $ | 31,500,000 | 100% Stock Options | $ | 646.31 | 188,909 | — | ||||||||||||
Rich DiGeronimo | January 15, 2020 | $ | 4,000,000 | 90% Stock Options / 10% RSUs | $ | 512.06 | 24,781 | 781 | ||||||||||||
David G. Ellen | January 15, 2020 | $ | 7,500,000 | 90% Stock Options / 10% RSUs | $ | 512.06 | 46,465 | 1,465 | ||||||||||||
Christopher L. Winfrey | January 15, 2020 | $ | 9,000,000 | 90% Stock Options / 10% RSUs | $ | 512.06 | 55,758 | 1,758 |
Summary of 2016 Performance-based Program
Targeted grant values under the 2016 Performance-based Program were determined by the Committee using an analysis of potential realizable compensationdate (i.e., actual value realized from awards upon vesting or exercise) from achieving certain levels of stock price appreciation over the duration of the program. The actual number of3-year cliff vesting) and stock options and restricted stock units grantedhave a 10-year term to participants were calculated based on (i) the target realizable compensation for the participant, (ii) stock price hurdles established for the program and (iii) a targeted mix of 90% stock options and 10% restricted stock units. The number of stock options and restricted stock units to be granted were then divided into a number of tranches, each with a combination of time-based and stock price performance vesting criteria. If the stock price vesting criteria are not achieved within six years after grant, the unvested awards will be forfeited, and the determination of whether a stock price hurdle is achieved is based on Charter’s 60-day average closing stock price. The tranche-level vesting schedules for stock options and restricted stock units are provided in the exhibits below.exercise.
Under the 2016-Performance-based Program, price targets (based on the 60-day average closing stock price) at $289.76, $364.97, $455.66, $496.58, and $564.04 have been achieved as of February 26, 2021. As a result, two-thirds of the stock options and RSUs granted under the program have vested. Based on the achievement of these price targets, and assuming that the stock price continues to remain at or above these targets, additional vesting eligibility will occur in April 2021 for the Chairman and CEO and in June 2021 for the other NEOs in the 2016 Performance-based Program. The Committee believes that the 2016 Performance-based Program has created significant value for Charter’s stockholders by further incenting Charter’s management to achieve sustained growth in Charter’s stock price following the Transactions. The day after completion of the Transactions, the closing price of Charter’s Class A common stock was $227.41 per share with a total market capitalization of $70.2 billion. As of February 26, 2021, the closing price of Charter’s Class A common stock was $613.42 with a total market capitalization of $130.8 billion. Over this period, Charter stockholders have seen an increase in Charter’s stock price of 170% and an increase in total market capitalization of 86% or $60.6 billion.
Proportion of Stock Options Vesting by Stock Price Hurdle and Time-Based Vesting Period
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2009 Stock Incentive Plan and 2019 Stock Incentive Plan
OurCharter granted long-term incentive awards made prior to April 23, 2019 are granted under the 2009 Stock Incentive Plan (the “2009 Plan”), and granted awards made after this date are granted under the 2019 Stock Incentive Plan (the “2019 Plan” and, collectively, the “Stock Incentive Plans”), each. Each of whichthe Stock Incentive Plans is an omnibus plan, administered at the discretion of the Committee, that provides for a range of compensation programs including the potential grant of non-qualified stock options, incentive stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock, restricted stock units and restricted stock as each(each term isas defined in the Stock Incentive Plans and in the discretion of the Committee.Plans). The 2019 Plan was approved by the Board of Directors approved the 2019 Plan in January 2019 and shareholders approved by shareholdersthe 2019 Plan at the annual meeting on April 23, 2019. Under theThe terms of the 2019 Plan, after its approval, nodo not permit additional awards were subsequently permitted under the 2009 Plan, which terminated on November 30, 2019. Unless terminated sooner, the 2019 Plan will terminateterminates on January 29, 2029, andwith no optionfurther options or award can be grantedawards permitted thereafter under that plan.
As of December 31, 2020, 13,840,6162022, 10,478,392 million shares remained available for future grants under the 2019 Plan. As of December 31, 2020,2022, there were 3,7786,235 participants in the 2019 Plan and there remained 2,976432 participants with awards outstanding under the 2009 Plan.
The 2009 Plan authorized the repricing of options. No repricing occurred under the 2009 Plan through its termination. While the 2019 Plan also initially authorized the repricing of options, on January 28, 2020 the Board approved an amendment to the 2019 Plan prohibiting the repricing of stock options without shareholder approval.
Other Elements of Compensation
The NEOs are eligible to participate in all other benefit programs offered to all employees generally.
The CompanyOver the course of 2022, Charter entered into amended and restated employment agreements with Messrs. Rutledge and Winfrey, a new employment agreement with Mr. Rutledge, effective October 27, 2020DiGeronimo, and extending his term through December 31, 2024, and Mr. Bickham, effective December 23, 2020 and extending his term through December 31, 2022.amended the existing employment agreements with Messrs. Ellen and Hargis. Messrs. Winfrey continue to be covered by theand DiGeronimo’s employment agreements that theywere effective September 20, 2022 with terms through December 1, 2025. Mr. Rutledge’s agreement was effective December 1, 2022 and has a term through November 30, 2023. Mr. Ellen’s existing employment agreement, originally entered into effective July 1, 2021, was amended on October 27, 2022 to extend the term from July 1, 2023 to December 1, 2023. Mr. Hargis’s existing employment agreement, originally entered into effective June 17, 2021, was amended effective April 1, 2022 to modify the term of the agreement from June 17, 2023 to December 31, 2022, the date of his retirement from the Company. In early 2023, Charter also entered into an amended and restated employment agreement with Ms. Fischer, effective February 5, 2023 and renewing the Companyterm of her employment for an additional two years from such date; Ms. Fischer’s prior employment agreement, which was in 2016, at the time awards were made under the 2016 Performance-based Program.effect as of
Charter Communications | 37 | 2023 Proxy Statement
December 31, 2022, was entered into effective February 5, 2021 with a term through February 5, 2023. A more detailed description of employment arrangements with our NEOs is set forth below under the section titled “Employment“NEO Employment Agreements.”
Prior to the Tax Cuts and Jobs Act, Section 162(m) of the Internal Revenue Code placed a $1 million limit on the amount of non-performance-based compensation the Company can deduct in any year for certain NEOs. The Committee had designed the compensation programs with the intention to qualify a majority of compensation as performance-based compensation under Section 162(m). Effective January 1, 2018, performance-based compensation potentially no longer qualifies for exemption from the Section 162(m) limitation. Certain awards under the existing plans may be deductible, but future awards would be analyzed under the new laws and may not create a tax deduction. Once an individual has become an NEO, these
Charter Communications | 39 | 2021 Proxy Statement
individuals will remain subject to the limitation under Section 162(m) for all current and future compensation. These tax effects are only one factor considered by the Committee when entering into compensation arrangements, and the Committee maintains flexibility in compensating executive officers in a manner designed to promote varying corporate goals, which may not be deductible under Section 162(m).
We account for stock-based compensation in accordance with United States generally accepted accounting principles (“GAAP”). Restricted stock, restricted stock units, stock options as well as equity awards with market conditions are measured at the grant date fair value and amortized to stock compensation expense over the requisite service period. The fair value of options is estimated on the date of grant using the Black-Scholes option-pricing model and the fair value of equity awards with market conditions is estimated on the date of grant using Monte Carlo simulations.
Additional Compensation Governance Policies
Stock Ownership Guidelines
The stock ownership guidelines are based onrequire the achievement of a certain specified multiple of the applicable officer’s base salary or outside director’s cash retainer. The guidelines do not apply to officers, directors or affiliates of any stockholder of the Company beneficially holding 10% or greater of the outstanding shares of the Company’s stock.
Executive Officer | Ownership Multiple of Salary (for employees) or Cash Retainer (for directors) | |||
CEO | 5x | |||
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Executive Vice President | 2x | |||
Other Covered Individuals | 1x | |||
Outside Director | 3x |
In determining whether a covered individual has met the applicable stock ownership level, management evaluates annually stock beneficially owned outright and 25% of the value of time-based restricted stock and restricted stock units that are only subject to time-based vesting (the performance-based restricted stock unit awards do not count toward the ownership guidelines). There is no time requirement to meet the guidelines. However, until the officer or outside director achieves the minimum ownership level, is reached, a covered individual is required to retain a minimum of 25% of the shares received when options to purchase stock are exercised or restricted stock vests (unless an exemption is granted). As of December 31, 20202022 all covered directors and the NEOs met the applicable stock ownership guidelines (except for individuals appointedrecently hired or hired after the closing of the Transactionspromoted individuals who have had limited or no vesting events).
Compensation Recovery Policy
The Compensation Recovery Policy provides that all executive officers, including the NEOs, may be required under certain circumstances be required to repay or forfeit annual incentive or other performance-based compensation, including payments under our Executive Bonus Plan, received in the event of a restatement of Charter’s financial statements filed with the SEC. Under this policy, there is a three-year look back period for compensation recovery and it applies regardless of whether or not the individual was at fault in the circumstances leading to the restatement. However, the Committee has been granted greater authority to recover any outstanding equity based awards, vested and unvested, if it determines that a covered executive was engaged in any fraud or intentional misconduct with regard to the circumstances leading to the restatement.
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Hedging
The Company prohibits Restricted Employees from hedging transactions or similar arrangements with respect to Company securities without the prior approval of the Company’s Legal department. Specific transactions prohibited are sales of Company securities of the same class for at least six months after the purchase, short sales of Company securities, buying or selling puts or calls or other derivative securities on the Company’s securities, and entering into hedging or monetization transactions or similar arrangements with respect to Company securities.
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Restricted Employees include any employee with the title of Vice President or equivalent and above; all persons employed in the Finance, Investor Relations, Legal and Stock Administration departments; members of corporate executive staff; members of the Board of Directors; and any other designated employee identified by senior management as a “Restricted Employee” (e.g., key consultants, executive staff support, compensation personnel, senior Marketing staff).
Stockholder Vote on Say on Pay
At the Company’s 2017 annual stockholders’ meeting, the stockholders considered an advisory proposal on the frequency of holding a vote on executive compensation and, as the Board of Directors recommended, voted to hold an advisory vote on executive compensation every three (3) years with approximately 57% of the votes cast in favor of the triennial frequency proposal. The most recent advisory vote on executive compensation was heldoccurred at the 2020 annual stockholders’ meeting. As the Board of Directors recommended, the stockholders approved the 2020 executive compensation program with approximately 91% of the votes cast voting in favor of the proposal. At the annual stockholder’sstockholders’ meeting in 2023, stockholders will be asked to consider two advisory votes relative to executive compensation. One will address executive compensation as described in the Compensation Discussion and Analysis and the other will address the frequency of advisory votes on the Company’s executive compensationcompensation. See “Proposal No. 2: Approval, on an Advisory Basis, of the Compensation of Named Executive Officers (Item 2 on Proxy Card)” and the other will address“Proposal No. 3: Approval, on an Advisory Basis, of a Triennial Advisory Vote on Executive Compensation (Item 3 on Proxy Card)” below for additional information on these advisory votes.
Charter designs its executive compensation as described in the Compensation Discussion and Analysis.
Charter’s executive compensation program is designed to ensure management’s interests are alignedalign with those of our investors’ interests to support long-term value creation, while also maintaining the consistency over time that is imperative for motivating and retaining employees. After considering the stockholders’ advisory votes, including the level of support received for each proposal, the Committee continues to believe that the Company’s executive compensation structure — including the 2016 Performance-based Program — best achieves the desired alignment. In addition, the Committee views a three-year period between advisory votes on executive compensation as the most effective approach, providing investors sufficient time to evaluate the effectiveness of both short and long-term compensation strategies and corresponding business outcomes of the Company. Although the Committee will continue to monitor the frequency of the vote, the Committee considers a triennial vote on executive pay to be the appropriate frequency to provide time to thoughtfully consider and implement appropriate changes to our executive compensation program.
Proactive Stockholder Engagement
Charter valuesCommunications | 39 | 2023 Proxy Statement
Tabular Disclosure of Pay Versus Performance (1) | ||||||||||||||||||||
Value of Initial Fixed $100 Investment Based On: | ||||||||||||||||||||
Year | Summary Compensation Table Total for CEO (Rutledge) | Compensation Actually Paid to CEO (Rutledge) (1,2) | Summary Compensation Table Total for CEO (Winfrey) (3) | Compensation Actually Paid to CEO (Winfrey) (2)(3) | Average Summary Compensation Table Total for Other NEOs (3) | Average Compensation Actually Paid to Other NEOs (2)(3) | Charter Total Shareholder Return | Primary Peer Group Total Shareholder Return | Net Income ($M) | Adjusted EBITDA ($M) | ||||||||||
2022 | $39,213,350 | ($65,738,275) | $15,626,967 | ($20,010,688) | $7,482,328 | ($9,640,987) | $70 | $84 | $5,849 | $21,616 | ||||||||||
2021 | $41,860,263 | $9,855,008 | n/a | n/a | $8,196,657 | $7,662,612 | $134 | $114 | $5,320 | $20,630 | ||||||||||
2020 | $38,846,705 | $234,204,667 | n/a | n/a | $16,403,815 | $61,038,985 | $136 | $113 | $3,676 | $18,518 |
(1) | See the “Description of Disclosure Requirements” section below for additional information on the requirements for this Pay Versus Performance Disclosure and the required Tabular List of Additional Performance Metrics. |
(2) | Mr. Rutledge served as Chairman and CEO in each of 2020, 2021 and 2022 and is therefore included as the CEO in the table for each year. Mr. Winfrey served as President and CEO from December 1, 2022 and is therefore included as the CEO for 2022 only. The average values for Other NEOs pertain to the following executives and their roles for each year: |
(3) | The table below provides a reconciliation of the adjustments to Summary Compensation Table Totals to Compensation Actually Paid; refer to the “Determination of Compensation Actually Paid” section below for additional information on the methodology and assumptions for determining the fair value stock and option awards. |
Chief Executive Officer | Other Named Executive Officers Average | |||||||||||||
2020 (Rutledge) | 2021 (Rutledge) | 2022 (Rutledge) | 2022 (Winfrey) | 2020 | 2021 | 2022 | ||||||||
Summary Compensation Table Total | $38,846,705 | $41,860,263 | $39,213,350 | $15,626,967 | $16,403,815 | $8,196,657 | $7,482,328 | |||||||
Less change in pension value | ($176,085) | ($59,302) | $249,614 | $0 | ($33,655) | ($11,136) | $0 | |||||||
Plus | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||||||
Less | ($30,005,695) | ($30,004,409) | ($30,005,043) | ($12,001,909) | ($12,999,065) | ($4,000,613) | ($5,325,719) | |||||||
Plus year-end | $9,020,157 | $2,003,335 | ($20,089,009) | ($6,509,546) | $3,075,241 | $92,552 | ($3,290,927) | |||||||
Plus year-end or the vesting date, if earlier | $216,519,585 | ($3,944,879) | ($55,107,188) | ($17,126,200) | $54,592,650 | $3,385,151 | ($8,506,669) | |||||||
Compensation Actually Paid | $234,204,667 | $9,855,008 | ($65,738,275) | ($20,010,688) | $61,038,985 | $7,662,612 | ($9,640,987) |
(1) | The ratio of Compensation Actually Paid to Summary Compensation Table Total is calculated based on the corresponding CEO and Other NEO values disclosed in the Tabular Disclosure of Pay Versus Performance. |
2020 – Strong stock price performance resulted in increased value for NEOs. • Charter stock price performance outperformed Primary Peers (with a $100 fixed investment on 12/31/2019 increased to $136 for Charter and $113 for Primary Peers, representing returns of 36.4% and 12.8%, respectively) and resulted in Compensation Actually Paid that was 6.0x the Summary Compensation Table Total for the CEO and 3.7x for the other NEOs.• The significant upside leverage observed in Compensation Actually Paid was driven by Charter’s philosophy to deliver the substantial majority of NEO compensation in the form of stock options, including performance-based equity awards granted in 2016 and vesting based upon the achievement of stock price hurdles, a substantial portion of which were still unvested and outstanding in 2020 and therefore included in this analysis• Strong financial performance results for this year, with 9.9% Adjusted EBITDA growth and 84.5% growth in Net Income(1) , correlated with stock price performance achievement and also aligned with executive pay outcomes. |
2021 – Flat stock price performance resulted in reduced value for NEOs. • Charter’s stock price continued to grow for most of the year before declining to essentially flat performance by year-end (the closing stock price of $661.55 on 12/31/2020 increased to a high of $821.01 on 9/2/2021 and then fell to $651.97 on 12/31/2021), with similar flat stock price performance observed among Primary Peers; the value of an initial $100 investment made in Charter on 12/31/2019 fell 1.5% over 2021 (from $136 to $134) versus a 0.8% increase (from $113 to $114) for such an investment among Primary Peers.• This period of flat stock price performance resulted in Compensation Actually Paid levels that were flat or down relative to Summary Compensation Table Totals, with ratios of 0.2x for Mr. Rutledge as CEO and 0.9x for the other NEOs. The lower ratio for Mr. Rutledge relative to the other NEOs was driven by a number of factors, including the greater proportion of stock options in the CEO’s pay mix and the timing and grant prices of stock option awards granted in prior years to the CEO relative to other NEOs. |
• Financial performance results were strong for this year – with 11.4% Adjusted EBITDA growth and 44.7% growth in Net Income – and initially correlated with strong stock price performance. However, in the latter half of the year, challenging macroeconomic conditions and an inflationary environment drove stock price declines among Charter, Primary Peers, and the broader market as a whole.• Given the large portion of Charter’s compensation tied to stock options, Charter’s lower levels of Compensation Actually Paid, particularly relative to 2020, were driven predominately by the flat stock price performance for the year in spite of robust financial performance results. |
2022 – Declining stock price performance resulted in a significant contraction of value for NEOs. • Stock prices for both Charter and Primary Peer companies continued to fall over the course of 2022; the value of an initial $100 investment made in Charter on 12/31/2019 fell 48.0% over 2022 (from $134 to $70) versus a 26.3% decline (from $114 to $84) for such an investment among Primary Peers.• The decline in stock price had a significant impact on Charter’s levels of Compensation Actually Paid, with all NEOs recognizing overall negative values of Compensation Actually Paid (i.e., net losses driven by declining equity values exceeded their Summary Compensation Table Totals).• Charter continued to achieve annual growth in both Net Income (increasing 9.9% from the prior year) and Adjusted EBITDA (increasing 4.8% from the prior year), albeit at lower growth rates than in prior years. As such growth in financial performance did not correspond to an increase in stock price, these results had no direct impact on Compensation Actually Paid.• As a result of Charter’s philosophy to deliver the substantial majority of compensation in the form of stock options, the pay versus performance outcome in 2022 – negative Compensation Actually Paid resulting from a decline in stock price – mirrored that which was observed in 2020 – high levels of Compensation Actually Paid resulting from stock price growth – and demonstrated alignment between shareholder returns and value realized by NEOs under differing performance scenarios. |
(1) | Based on 2019 Adjusted EBITDA of $16.855 billion and Net Income of $1.992 billion. |
Pay | Summary Compensation Table Total Total compensation disclosed in the Summary Compensation Table. Generally representative of target compensation for NEOs, with the main exception being that amounts in the non-equity incentive compensation plan column represent actual payout levels under the annual incentive plan(1) . | |
Compensation Actually Paid The Summary Compensation Table Total adjusted to reflect: (i) the replacement of the aggregate change in present value of defined benefit plans with the annual service cost for defined benefit plans, including modifications, (ii) the replacement of the amounts disclosed in the Stock Awards and Option Awards columns (which represent the fair value of awards at grant) with the fair value of such awards as of the end of the year, and (iii) the addition of the change in fair value of stock and options awards granted in prior years and either vesting during the year or outstanding at the end of the year. |
Performance | Total shareholder return (TSR) for Charter and Primary Peer companies | |||||||
Equals the change in value of a notional $100 investment in Charter and a $100 investment in Primary Peer organizations (1) (with such investment weighted between peers based on market capitalization) from the beginning of the pay versus performance analysis period through the end of each year of the analysis. | ||||||||
Charter’s GAAP net income | ||||||||
Consolidated net income as disclosed in Charter’s annual report on Form 10-K for each year. | ||||||||
An additional financial performance measure considered to be the most important non-TSR related metric in determining compensation (Adjusted EBITDA) | ||||||||
Charter identified Adjusted EBITDA, as disclosed in Charter’s annual report on Form 10-K for each year, as the appropriate metric based on the higher weighting of Adjusted EBITDA in the annual bonus plan relative to other metrics(1) . Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. | ||||||||
Identification of three to seven additional performance metrics most important for assessing pay | ||||||||
Although not included in the analysis of pay and performance, regulations require the identification of additional performance measures tied to compensation, which for Charter applies to five performance metrics in the annual bonus plan (1) and listed belowTabular List of Additional Performance Metrics | ||||||||
Metric | Description | |||||||
Revenue | Financial metric used in 2020 – 2022 bonus designs for all NEOs | |||||||
Capital and Free Cash Flow Management | Non-financial metric used in 2020 – 2022 bonus designs for all NEOs | |||||||
RDOF and Subsidized Rural Build Initiatives | Non-financial metric used in 2022 bonus design for all NEOs | |||||||
Talent Planning | Non-financial metric used in 2020 – 2022 bonus designs for Mr. Rutledge as CEO | |||||||
Diversity and Inclusion | Non-financial metric used in 2021 and 2022 bonus designs for Mr. Rutledge as CEO | |||||||
(1) | Refer to the Compensation Discussion & Analysis for a description of Charter’s Primary Peer group and the annual bonus plan design and performance metrics. |
The engagements covered a variety of topics. The topics most often raisedwere in effect for the given year, and the Company’s response to these discussions are summarized below.
ESG Reporting. Last yearexpected life assumption that was in effect on the Company posted its “2019 Corporate Responsibility Report” on its website at ir.charter.com/corporate-responsibility-report. In addition, in response to further discussion with stockholders regarding the importance of environmental, social and governance (“ESG”) oversight and reporting to stockholders, the Company is in the process of preparing an ESG report describing the Company’s policies, performance and improvement targets related to ESG. As part of this process, the Company’s Chairman and CEO has committed the Company to adopt a performance target related to greenhouse gas emissions, although the specific target continues to be developed. The Company expects to issue the report before theoriginal grant date of the 2021 annual stockholders’ meeting,stock options, less the time that had elapsed since the grant date.
Charter Communications | 41 | 2021 Proxy Statement
Board Diversity. Our Governance Guidelines reflect our commitment to diversity and provide that a candidate’s contribution of diversity to the board of directors (based on common factors associated with diversity such as gender, race/ethnicity and other background characteristics that enhance the diversityaverage of the board) will be onehigh and low prices of the many elements to be considered in evaluating candidates. At this time, our Board includes a female African American, an Asian American/Pacific Islander and a Latino American. Also, the Nominating and Corporate Governance Committee has undertaken to begin identifying diverse director candidates so a pipe-line is developed in case an opening occursCharter common stock on the Board of Directors.
We take seriously the views of our stockholders and took into consideration all the various input we received, and intend to continue our stockholder engagement efforts in 2021.
applicable valuation date.
The following table sets forth compensation information for our named executive officers (“NEOs”) that were identified as such as of December 31, 2020.2022.
Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in pension value and nonqualified deferred compensation earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | ||||||||||||||||||||||||
Thomas M. Rutledge Chairman and Chief Executive Officer | 2020 | 2,073,077 | — | 30,005,695 | 6,299,963 | 176,085 | 291,885 | 38,846,705 | ||||||||||||||||||||||||
2019 | 2,000,000 | — | — | 6,082,080 | 205,079 | 456,442 | 8,743,601 | |||||||||||||||||||||||||
2018 | 2,000,000 | — | — | 5,738,112 | — | 419,152 | 8,157,264 | |||||||||||||||||||||||||
John Bickham President and Chief Operating Officer | 2020 | 1,500,000 | — | 31,495,475 | 3,025,800 | 134,620 | 300,052 | 36,455,947 | ||||||||||||||||||||||||
2019 | 1,500,000 | — | — | 3,041,040 | 182,720 | 313,645 | 5,037,405 | |||||||||||||||||||||||||
2018 | 1,500,000 | — | — | 2,869,056 | 1,859 | 358,239 | 4,729,154 | |||||||||||||||||||||||||
Rich DiGeronimo Chief Product & Technology Officer | 2020 | 1,000,000 | 399,917 | 3,600,060 | 1,613,760 | — | 20,598 | 6,634,335 | ||||||||||||||||||||||||
David G. Ellen Senior Executive Vice President | 2020 | 1,250,000 | 750,165 | 6,750,203 | 2,017,200 | — | 20,000 | 10,787,568 | ||||||||||||||||||||||||
2019 | 1,250,000 | — | — | 2,027,360 | — | 22,349 | 3,299,709 | |||||||||||||||||||||||||
2018 | 1,250,000 | — | — | 1,912,704 | — | 78,610 | 3,241,314 | |||||||||||||||||||||||||
Christopher L. Winfrey Chief Financial Officer | 2020 | 1,000,000 | 900,198 | 8,100,243 | 1,613,760 | — | 123,209 | 11,737,410 | ||||||||||||||||||||||||
2019 | 928,454 | — | — | 1,458,519 | — | 85,790 | 2,472,763 | |||||||||||||||||||||||||
2018 | 850,000 | — | — | 1,219,349 | — | 61,919 | 2,131,268 |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | Change in pension value and nonqualified deferred compensation earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | |||||||||||||||||||||||||||
Christopher L. Winfrey President and Chief Executive Officer | 2022 | 1,359,038 | — | — | 12,001,909 | 2,035,221 | — | 230,799 | 15,626,967 | |||||||||||||||||||||||||||
2021 | 1,041,346 | — | 712,575 | 7,038,681 | 2,747,200 | — | 145,914 | 11,685,716 | ||||||||||||||||||||||||||||
2020 | 1,000,000 | — | 900,198 | 8,100,243 | 1,613,760 | — | 123,209 | 11,737,410 | ||||||||||||||||||||||||||||
Thomas M. Rutledge Executive Chairman | 2022 | 2,447,115 | — | — | 30,005,043 | 6,364,251 | (249,614 | ) | 646,555 | 39,213,350 | ||||||||||||||||||||||||||
2021 | 2,500,000 | — | — | 30,004,409 | 8,901,000 | 59,302 | 395,552 | 41,860,263 | ||||||||||||||||||||||||||||
2020 | 2,073,077 | — | — | 30,005,695 | 6,299,963 | 176,085 | 291,885 | 38,846,705 | ||||||||||||||||||||||||||||
Richard J. DiGeronimo President, Product and Technology | 2022 | 1,298,461 | — | 880,296 | 7,921,224 | 1,740,968 | — | 200,572 | 12,041,521 | |||||||||||||||||||||||||||
2021 | 1,041,346 | — | 499,824 | 4,500,594 | 2,747,200 | — | 77,878 | 8,866,842 | ||||||||||||||||||||||||||||
2020 | 1,000,000 | — | 399,917 | 3,600,060 | 1,613,760 | — | 20,598 | 6,634,335 | ||||||||||||||||||||||||||||
David G. Ellen Senior Executive Vice President | 2022 | 1,250,000 | — | 549,963 | 4,950,823 | 1,544,800 | — | 74,861 | 8,370,447 | |||||||||||||||||||||||||||
2021 | 1,250,000 | — | 525,165 | 4,725,735 | 2,747,200 | — | 108,188 | 9,356,288 | ||||||||||||||||||||||||||||
2020 | 1,250,000 | — | 750,165 | 6,750,203 | 2,017,200 | — | 20,000 | 10,787,568 | ||||||||||||||||||||||||||||
Jessica M. Fischer Chief Financial Officer | 2022 | 700,000 | — | 349,762 | 3,150,523 | 811,020 | — | 21,530 | 5,032,835 | |||||||||||||||||||||||||||
2021 | 555,752 | 250,000 | 295,982 | 1,704,509 | 777,767 | — | 19,476 | 3,603,486 | ||||||||||||||||||||||||||||
Jonathan Hargis Special Advisor to the COO | 2022 | 450,962 | — | 349,762 | 3,150,523 | 505,499 | — | 27,762 | 4,484,508 |
(1) | Messrs. Winfrey and DiGeronimo’s salary calculations are prorated based on the adjustment to their base salaries effective September 20, 2022. Mr. Rutledge’s salary calculation is prorated based on the adjustment to his base salary effective |
(2) | Ms. Fischer received a $250,000 lump sum payment made in connection with her relocation in 2021. |
(3) | Amounts reported in this column reflect the aggregate grant date fair value of restricted stock unit grants, if any, to each NEO during the applicable fiscal years set forth above. Amounts reported represent the aggregate grant date fair value based on the average of the high and low stock prices on the applicable grant date. For more information on accounting guidance regarding stock compensation, see “Impact of Tax and Accounting” under Compensation Discussion and Analysis. |
Amounts reported in this column were calculated in accordance with GAAP and reflect the aggregate grant date fair value of options granted to each NEO during the applicable fiscal years set forth above. For more information on accounting guidance regarding stock compensation, see “Impact of Tax and Accounting” under Compensation Discussion & Analysis. |
The amounts reported under this column for |
Charter Communications | 46 | 2023 Proxy Statement
in effect from January 1, 2022 through September 19, 2022, and his new base salary of $1,450,000 and target annual incentive of 200% of base salary as of September 20, 2022. Mr. Hargis’s target annual incentive amount is prorated with his prior base salary of $700,000 and target annual incentive of 150% of base salary in effect from January 1, 2022 through March 31, 2022, and his new base salary of $350,000 and target annual incentive of 150% of base salary as of April 1, 2022. |
Although the plan was frozen in 2016 and no benefits accrued after that date, |
Charter Communications | 43 | 2021 Proxy Statement
The |
Name | Personal Use of Corporate Airplane ($)(a) | 401(k) Matching Contributions ($) | Group Life ($) | Executive Long- Term Disability Premiums ($) | Gross-up for Executive Long Term Disability ($) | Other ($)(b) | Personal Use of Corporate Airplane ($)(a) | 401(k) Matching Contributions ($) | Group Term Life Premiums ($) | Executive Long- Term Disability Premiums ($) | Gross-up for Executive Long Term Disability ($) | Other ($)(b) | ||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | 168,027 | 18,300 | 1,018 | 906 | 1,698 | 40,850 | ||||||||||||||||||||||||||||||||||||||||||
Thomas M. Rutledge | 259,209 | — | 29,718 | 1,029 | 1,929 | — | 601,171 | — | 27,960 | 906 | 1,698 | 14,820 | ||||||||||||||||||||||||||||||||||||
John Bickham | 285,970 | — | 11,124 | 1,029 | 1,929 | — | ||||||||||||||||||||||||||||||||||||||||||
Rich DiGeronimo | — | 17,100 | 540 | 1,029 | 1,929 | — | ||||||||||||||||||||||||||||||||||||||||||
David Ellen | — | 14,692 | 2,322 | 1,029 | 1,929 | 28 | ||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | 102,269 | 17,100 | 810 | 1,029 | 1,929 | 72 | ||||||||||||||||||||||||||||||||||||||||||
Richard J. DiGeronimo | 178,858 | 18,300 | 810 | 906 | 1,698 | — | ||||||||||||||||||||||||||||||||||||||||||
David G. Ellen | 51,635 | 18,300 | 2,322 | 906 | 1,698 | — | ||||||||||||||||||||||||||||||||||||||||||
Jessica M. Fischer | — | 18,300 | 576 | 906 | 1,698 | 50 | ||||||||||||||||||||||||||||||||||||||||||
Jonathan Hargis | — | 18,300 | 6,858 | 906 | 1,698 | — |
(a) | As set forth in more detail below under the section titled |
(b) | Amounts reported for |
Charter Communications | 4447 | 20212023 Proxy Statement
20202022 Grants of Plan Based Awards
Name | Grant Date(1) |
Estimated Future Payouts | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($)(6) | Grant Date Fair Value of Stock and Option Awards ($)(7) | Grant Date(1) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($)(6) | Grant Date Fair Value of Stock and Option Awards ($)(7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold – 0% ($) | Target – 100% ($)(3) | Maximum – 150% ($)(3) | Threshold – 0% ($) | Target – 100% ($)(3) | Maximum – 150% ($)(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | — | — | 2,634,932 | 3,952,397 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/18/2022 | — | — | — | — | 57,356 | 588.825 | 10,001,739 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9/22/2022 | — | — | — | — | 17,073 | 342.235 | 2,000,170 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas M. Rutledge | — | — | 6,270,492 | 9,405,738 | — | — | — | — | — | — | 7,181,507 | 10,772,260 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
11/3/2020 | — | — | — | — | 195,022 | 597.16 | 30,005,695 | 1/18/2022 | — | — | — | — | 172,067 | 588.825 | 30,005,043 | |||||||||||||||||||||||||||||||||||||||||||||||||
John Bickham | — | — | 3,000,000 | 4,500,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard J. DiGeronimo | — | — | 2,253,973 | 3,380,959 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/23/2020 | — | — | 188,909 | 646.31 | 31,495,475 | 1/18/2022 | — | — | — | 1,359 | — | — | 800,213 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Rich DiGeronimo | — | — | 1,600,000 | 2,400,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/18/2022 | — | — | — | — | 41,296 | 588.825 | 7,201,196 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/15/2020 | — | — | — | 781 | — | — | 399,917 | 9/22/2022 | — | — | — | 234 | — | — | 80,083 | |||||||||||||||||||||||||||||||||||||||||||||||||
1/15/2020 | — | — | — | — | 24,781 | 512.06 | 3,600,060 | 9/22/2022 | — | — | — | — | 6,146 | 342.235 | 720,028 | |||||||||||||||||||||||||||||||||||||||||||||||||
David G. Ellen | — | — | 2,000,000 | 3,000,000 | — | — | — | — | — | — | 2,000,000 | 3,000,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
1/15/2020 | — | — | — | 1,465 | — | — | 750,165 | 1/18/2022 | — | — | — | 934 | — | — | 549,963 | |||||||||||||||||||||||||||||||||||||||||||||||||
1/15/2020 | — | — | — | — | 46,465 | 512.06 | 6,750,203 | 1/18/2022 | — | — | — | — | 28,391 | 588.825 | 4,950,823 | |||||||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | — | — | 1,600,000 | 2,400,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jessica M. Fischer | — | — | 1,050,000 | 1,575,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/15/2020 | — | — | — | 1,758 | — | — | 900,198 | 1/18/2022 | — | — | — | 594 | — | — | 349,762 | |||||||||||||||||||||||||||||||||||||||||||||||||
1/15/2020 | — | — | — | — | 55,758 | 512.06 | 8,100,243 | 1/18/2022 | — | — | — | — | 18,067 | 588.825 | 3,150,523 | |||||||||||||||||||||||||||||||||||||||||||||||||
Jonathan Hargis | — | — | 654,452 | 981,678 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/18/2022 | — | — | — | 594 | — | — | 349,762 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/18/2022 | — | — | — | — | 18,067 | 588.825 | 3,150,523 |
(1) | As described in the section titled “Compensation Actions in 2022” in the Compensation Discussion & Analysis, Messrs. Winfrey, Rutledge, DiGeronimo, Ellen and Hargis and Ms. Fischer received grants on January 18, 2022 under Charter’s annual equity program. Mr. |
(2) | These columns show the range of payouts under the |
(3) | Mr. |
Charter Communications | 48 | 2023 Proxy Statement
(4) | Awards under this column were granted as restricted stock units under the |
(5) | These option awards were granted as options under the |
(6) | The exercise prices of the option awards were determined using the average of high and low stock prices on the date of grant. |
(7) | Amounts were calculated in accordance with accounting guidance related to share-based payment transactions and represent the aggregate grant date fair value. For more information, see “Impact of Tax and Accounting” under Compensation Discussion & Analysis. |
Charter Communications | 4549 | 20212023 Proxy Statement
Outstanding Equity Awards at Fiscal Year End
The following table provides information concerning unexercised options and unvested restricted stock and restricted stock units for each of our NEOs that remained outstanding as of December 31, 2020.2022. In connection with the closing of the Transactions the merger exchange ratio of .9042 was applied to the exercise price and performance targets (divided by .9042) and the number of restricted stock units and stock options (multiplied by .9042) for all equity awards outstanding on May 18, 2016.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | 36,976 | (2) | — | — | 150.88 | 1/15/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
34,046 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
24,064 | (4) | — | — | 183.87 | 1/15/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
497,309 | (5) | — | — | 221.25 | 6/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 55,758 | (6) | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 31,819 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 5,176 | (8) | — | 704.21 | 7/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 3,099 | (9) | — | 714.99 | 10/19/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 57,356 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 17,073 | (11) | — | 342.24 | 9/22/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,877 | (12) | $ | 975,591 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas M. Rutledge | 147,905 | (2) | — | — | 150.88 | 1/15/2024 | — | — | — | — | 147,905 | (2) | — | — | 150.88 | 1/15/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
136,188 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | 136,188 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
602,800 | (4) | — | 301,400 | (4) | 222.92 | 4/25/2026 | — | — | — | — | 904,200 | (5) | — | — | 222.92 | 4/25/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
482,240 | (4) | — | 241,120 | (4) | 232.34 | 4/26/2026 | — | — | — | — | 723,360 | (5) | — | — | 232.34 | 4/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | 195,022 | (5) | 597.16 | 11/3/2030 | — | — | — | — | — | 195,022 | (13) | — | 597.16 | 11/3/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 60,282 | (6) | $ | 39,879,557 | — | 176,770 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Bickham | 78,364 | (4) | — | 195,910 | (4) | 221.25 | 6/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 172,067 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard J. DiGeronimo | 23,620 | (14) | — | — | 353.20 | 1/16/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
18,084 | (4) | — | 45,210 | (4) | 242.30 | 7/25/2026 | — | — | — | — | 27,151 | (15) | — | — | 292.31 | 1/15/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 188,909 | (7) | — | 646.31 | 12/23/2030 | — | — | — | — | 6,760 | (16) | — | — | 378.67 | 8/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 26,793 | (6) | $ | 17,724,909 | — | 24,781 | (6) | — | 512.06 | 1/15/2030 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rich DiGeronimo | — | 23,620 | (8) | — | 353.20 | 1/16/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 21,212 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 27,151 | (9) | — | 292.31 | 1/15/2029 | — | — | — | — | — | 4,462 | (9) | — | 714.99 | 10/19/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 6,760 | (10) | — | 378.67 | 8/15/2029 | — | — | — | — | — | 41,296 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 24,781 | (11) | — | 512.06 | 1/15/2030 | — | — | — | — | — | 6,146 | (11) | — | 342.24 | 9/22/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,542 | (12) | $ | 1,681,660 | — | — | — | — | — | — | — | 3,153 | (17) | $ | 1,069,182 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David G. Ellen | 164,370 | (4) | — | 135,630 | (4) | 221.25 | 6/17/2026 | — | — | — | — | 200,000 | (5) | — | — | 221.25 | 6/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 46,465 | (11) | — | 512.06 | 1/15/2030 | — | — | — | — | — | 46,465 | (6) | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 15,072 | (6) | $ | 9,970,882 | — | 26,516 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 1,465 | (13) | $ | 969,171 | — | — | — | 1,150 | (8) | — | 704.21 | 7/15/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | 36,976 | (2) | — | — | 150.88 | 1/15/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 28,391 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 3,234 | (18) | $ | 1,096,649 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jessica M. Fischer | 5,765 | (15) | — | — | 292.31 | 1/15/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
34,046 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | — | 3,289 | (6) | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
24,064 | (14) | — | — | 183.87 | 1/15/2026 | — | — | — | — | — | 2,815 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
331,539 | (4) | — | 165,770 | (4) | 221.25 | 6/17/2026 | — | — | — | — | — | 4,610 | (19) | — | 621.71 | 2/5/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 55,758 | (11) | — | 512.06 | 1/15/2030 | — | — | — | — | — | 2,231 | (9) | — | 714.99 | 10/19/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 18,420 | (6) | $ | 12,185,751 | — | 18,067 | (10) | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 1,758 | (13) | $ | 1,163,005 | — | — | — | — | — | — | — | 1,369 | (20) | $ | 464,228 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jonathan Hargis | — | 27,879 | (6) | — | 512.06 | 1/15/2030 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 15,909 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 1,725 | (8) | — | 704.21 | 7/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 18,067 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,006 | (18) | $ | 680,235 | — | — |
Charter Communications | 50 | 2023 Proxy Statement
(1) | Based on the closing stock price at December |
(2) | Amounts shown reflect time-vesting stock options granted on January 15, 2014 under the 2009 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
(3) | Amounts shown reflect time-vesting stock options granted on January 15, 2015 under the 2009 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
(4) | Amounts shown reflect time-vesting stock options granted on January 15, 2016 under the 2009 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
(5) | Amounts shown reflect grants of performance-vesting stock options that |
Amounts shown reflect time-vesting stock options granted on |
(7) | Amounts shown reflect time-vesting stock options granted on January 15, 2021 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
Charter Communications | 46 | 2021 Proxy Statement
|
|
(8) | Amounts shown reflect time-vesting stock options granted on |
(9) | Amounts shown reflect time-vesting stock options granted on |
(10) | Amounts shown reflect time-vesting stock options granted on |
(11) | Amounts shown reflect time-vesting stock options granted on |
(12) | Amounts shown reflect time-vesting RSUs granted on January |
(13) | Amounts shown reflect time-vesting |
(14) | Amounts shown reflect time-vesting stock options granted on January |
(15) | Amounts shown reflect time-vesting stock options granted on January 15, 2019 under the 2009 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
(16) | Amounts shown reflect time-vesting stock options granted on August 15, 2019 under the 2019 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
(17) | Amounts shown reflect time-vesting RSUs granted January 15, 2020, January 15, 2021, October 19, 2021, January 18, 2022 and September 22, 2022 under the 2019 Stock Incentive Plan that fully vest on the third anniversary of the grant date. |
(18) | Amounts shown reflect time-vesting RSUs granted on January 15, 2020, January 15, 2021, July 15, 2021 and January 18, 2022 under the 2019 Stock Incentive Plan that fully vest on the third anniversary of the grant date. |
(19) | Amounts shown reflect time-vesting stock options granted on February 5, 2021 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
(20) | Amounts shown reflect time-vesting RSUs granted on January 15, 2020, January 15, 2021, February 5, 2021, October 19, 2021 and January 18, 2022 under the 2019 Stock Incentive Plan that fully vest on the third anniversary of the grant date. |
Charter Communications ��| 4751 | 20212023 Proxy Statement
20202022 Options Exercised and Stock Vested
The following table provides information on option awards exercised and restricted stock and stock unit awards that vested during 20202022 for each of the Company’s NEOs.
Name | Option Awards | Stock Awards | ||||||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting or Transfer for Value (#) | Value Realized on Vesting ($)(1) | |||||||||||||||||
Thomas M. Rutledge(2) | 384,285 | $ | 224,451,827 | 100,465 | $ | 56,501,114 | ||||||||||||||
John Bickham(3) | 575,967 | $ | 204,994,803 | 44,651 | $ | 25,419,508 | ||||||||||||||
Richard J. DiGeronimo(4) | 12,009 | $ | 2,744,960 | 2,921 | $ | 1,480,012 | ||||||||||||||
David Ellen(5) | 106,890 | $ | 36,495,368 | 25,115 | $ | 14,297,769 | ||||||||||||||
Christopher L. Winfrey(6) | 314,962 | $ | 145,798,644 | 30,698 | $ | 17,476,110 |
Name | Option Awards | Stock Awards | ||||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting or Transfer for Value (#) | Value Realized on Vesting ($)(1) | |||||||||||||||
Christopher L. Winfrey | — | — | — | — | ||||||||||||||
Thomas M. Rutledge | — | — | — | — | ||||||||||||||
Richard J. DiGeronimo(2) | — | — | 1,053 | $ | 615,828 | |||||||||||||
David G. Ellen | — | — | — | — | ||||||||||||||
Jessica M. Fischer(3) | — | — | 545 | $ | 332,450 | |||||||||||||
Jonathan Hargis(4) | — | — | 867 | $ | 292,552 |
(1) | Amount attributed to the average high and low market values of the stock on the day of vesting. |
(2) |
|
(3) |
|
(4) | Mr. |
|
Charter Communications | 48 | 2021 Proxy Statement
|
We sponsor a 401(k) plan, which is a qualified retirement plan offered to all eligible employees, including our NEOs, that permits eligible employees to elect to defer a portion of their compensation on a pre-tax basis.
In connection with Mr. Rutledge’s and Mr. Bickham’s employment by a predecessor and/or affiliate of Legacy TWC, Mr. Rutledge and Mr. Bickham participated in the Time Warner Cable Pension Plan, a tax qualified defined benefit pension plan (the “Cable“Pension Plan”), and the Time Warner Cable Excess Benefit Pension Plan (the “Excess Benefit Plan”), a nonqualified defined benefit pension plan (collectively, the “Pension Plans”) offered by those employers and accrued a benefit as a result. No other NEO is entitled to benefits under the Pension Plans.Plan. As of the closing of the Transactions, Charter is the sponsor of the Pension Plans.Plan. As of December 31, 2020,2022, the present value of Mr. Rutledge’s and Mr. Bickham’s accrued benefit under the Pension PlansPlan was $1,624,327, and $1,481,437, respectively,$1,434,015, reflecting the assumptions that (a) the benefits will be payable at the earliest retirement age at which unreduced benefits are assumed to be payable (which is age 65) under the plans,Pension Plan, valued as if paid as a life annuity, (b) 28.58 and 8.75 years respectively, of benefit service to Legacy TWC during theirhis tenure there, and (c) are consistent with the assumptions used in the calculation of the Company’s benefit obligations as disclosed in Note 2221 to the audited consolidated financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.2022.
Federal tax law limits both the amount of compensation that is eligible for the calculation of benefits and the amount of benefits that may be paid to participants under a tax-qualified plan, such as the CablePension Plan. However, as permitted under Federal tax law, Legacy TWC designed the Excess Benefit Plan to provide for supplemental payments by Legacy TWC of an amount that eligible employees would have received under the Cable Plan if eligible compensation were subject to a higher limit and there were no payment restrictions. The amount of the payment under the Excess Benefit Plan is calculated based on the differences between (a) the annual benefit that would have been payable under the Cable Plan if the annual eligible compensation limit imposed by the tax laws was $350,000 (the maximum compensation limit imposed under the Excess Benefit Plan) and (b) the actual benefit payable under the Cable Plan.
Charter Communications | 49 | 2021 Proxy Statement
Benefit payments under the Pension PlansPlan are calculated using the highest consecutive five-year average annual compensation (subject to federal law limits and the $350,000 limit referred to above), which is referred to as “average compensation.” Compensation covered by the Pension PlansPlan takes into account salary, bonus, some elective deferrals and other compensation paid, but excludes the payment of deferred or long-term incentive compensation and severance payments. The annual pension payment under the
Charter Communications | 52 | 2023 Proxy Statement
terms of the TWC Pension Plans,Plan, if the retired employee is vested, and if paid as a single life annuity, commencing at age 65, is an amount equal to the sum of:
1.25% of the portion of average compensation that does not exceed the average of the Social Security taxable wage base ending in the year the employee reaches the Social Security retirement age, referred to as “covered compensation,” multiplied by the number of years of benefit service up to 35 years, plus
• | 1.25% of the portion of average compensation that does not exceed the average of the Social Security taxable wage base ending in the year the employee reaches the Social Security retirement age, referred to as “covered compensation,” multiplied by the number of years of benefit service up to 35 years, plus |
1.67% of the portion of average compensation that exceeds covered compensation, multiplied by the number of years of benefit service up to 35 years, plus
• | 1.67% of the portion of average compensation that exceeds covered compensation, multiplied by the number of years of benefit service up to 35 years, plus |
0.5% of average compensation multiplied by the employee’s number of years of benefit service in excess of 35 years, plus
• | 0.5% of average compensation multiplied by the employee’s number of years of benefit service in excess of 35 years, plus |
a supplemental benefit in the amount of $60 multiplied by the employee’s number of years of benefit service up to 30 years, with a maximum supplemental benefit of $1,800 per year.
• | a supplemental benefit in the amount of $60 multiplied by the employee’s number of years of benefit service up to 30 years, with a maximum supplemental benefit of $1,800 per year. |
Reduced benefits are available in the case of retirement before age 65 and in other optional forms of benefits payouts, as described below.
The benefits under the Pension Plan are payable as (i) a single life annuity, (ii) a 50%, 75% or 100% joint and survivor annuity, (iii) a life annuity that is guaranteed for 10 years, or (iv) as of January 1, 2015, a lump sum. Spousal consent is required in certain cases. The participant may elect the form of benefit payment at the time of retirement or termination of employment (in which case, benefits are payable as (i) a single life annuity, (ii) a 50% or 75% joint and survivor annuity or (iii) a lump sum). In the case of a single life annuity, the amount of the annuity is based on the applicable formulas described above. In the case of a joint and survivor annuity, the amount of the annuity is based on the single life annuity amount but is reduced to take into account the ages of the participant and beneficiary at the time the annuity payments begin and the percentage elected by the participant. In the case of a life annuity that is guaranteed for a period of time, the amount of the annuity is based on the single life annuity amount but is reduced to take into account the guaranteed period. Benefits under the Excess Benefit Plan are payable only as a lump sum, unless the participant elected to receive monthly installments over 10 years by the applicable deadline.
Pension Benefits Table
Set forth in the table below are the years of credited service and the present value of Mr. Rutledge’s and Mr. Bickham’s accumulated benefit under the Pension PlansPlan computed as of December 31, 2020,2022, the pension plan measurement date used for financial statement reporting purposes in the Company’s audited consolidated financial statements for the year ended December 31, 2020.2022.
Name | Plan Name | Number of Years Credited Service(1) | Present Value of Accumulated Benefit(2) | Plan Name | Number of Years Credited Service(1) | Present Value of Accumulated Benefit(2) | ||||||||||||||
Thomas M. Rutledge | Time Warner Cable Pension Plan | 28.583 | $ | 1,624,327 | Time Warner Cable Pension Plan | 28.583 | $ | 1,434,015 | ||||||||||||
Excess Benefit Plan | — | |||||||||||||||||||
| ||||||||||||||||||||
Total | $ | 1,624,327 | ||||||||||||||||||
John Bickham | Time Warner Cable Pension Plan | 8.75 | $ | 857,994 | ||||||||||||||||
Excess Benefit Plan | $ | 623,443 | ||||||||||||||||||
| ||||||||||||||||||||
Total | $ | 1,481,437 |
(1) | Consists of the number of years of service credited to the executive officers as of December 31, |
Charter Communications | 50 | 2021 Proxy Statement
(2) | The present |
Thomas M. RutledgeChristopher L. Winfrey
On October 27, 2020,September 20, 2022, Charter and Mr. Winfrey entered into an amended and restated employment agreement with Thomas Rutledge (the “Rutledgewhich was amended effective as of February 22, 2023 (collectively, the “Winfrey Agreement”). The RutledgeWinfrey Agreement has a term endingprovides that
Charter Communications | 53 | 2023 Proxy Statement
effective December 31, 2024 and provides that1, 2022, Mr. Rutledge will serveWinfrey became employed in an executive capacity as the Chairman of the Charter board of directorsPresident and Chief Executive Officer of Charter and will have duties commensurate with such positions. Under the Rutledge Agreement, Mr. Rutledge is to receiveresponsibilities, duties and authority as are customary for such role, at a current base salary of $2,500,000at least $1,700,000 per year during the term, commencing October 27, 2020, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Mr. RutledgeWinfrey’s base salary increased to $1,700,000 effective September 20, 2022 in connection with his December 1, 2022 promotion to President and Chief Executive Officer. Pursuant to the Winfrey Agreement, Mr. Winfrey is a non-voting Board observer and will be appointed as a member of the Board of Directors on or before December 31, 2023. Under the Winfrey Agreement, he is eligible to participate in the Executive Bonus Plan with a target bonus of not less than 250% of his annual base salary and he received an equity grant of $17,000,000 in stock options on January 17, 2023. Mr. Winfrey’s target bonus increased to 250% effective September 20, 2022 and he also received a grant of $2,000,000 in stock options on such date in connection with his December 1, 2022 promotion to President and Chief Executive Officer. He is also eligible to receive such other employee benefits as are generally made available to other senior executives. In addition, Charter must reimburse Mr. Winfrey for all reasonable and necessary expenses incurred in connection with the performance of his duties, and Mr. Winfrey is entitled to use Company aircraft for such travel and for up to 100 hours of discretionary personal use per calendar year (without carryover). The Winfrey Agreement has an initial term from the effective date through December 1, 2025, provided that the term can be extended by the Company for unlimited one-year periods. The Winfrey Agreement contains a two-year non-compete provision and a two-year non-solicitation clause.
Thomas M. Rutledge
On September 20, 2022, Charter and Mr. Rutledge entered into an amended and restated employment agreement (the “Rutledge Agreement”). The Rutledge Agreement has a term ending November 30, 2023 and provides that through November 30, 2022, Mr. Rutledge served as Chief Executive Officer and effective December 1, 2022, Mr. Rutledge transitioned to the role of Executive Chairman of the Company and the Board of Directors with duties commensurate with such position. Under the Rutledge Agreement, Mr. Rutledge’s base salary was $2,500,000 through November 30, 2022 and is $1,250,000 effective December 1, 2022, in connection with his transition to the role of Executive Chairman. The Rutledge Agreement also provides for continued eligibility to participate in the Executive Bonus Plan with a target bonus equal to 300% of his base salary.salary and a 2023 equity grant of $15,000,000 in stock options. Mr. Rutledge is also eligible to participate in other employee benefit plans, programs and arrangements available to other senior executives. In addition, Charter must reimburse Mr. Rutledge for all reasonable and necessary expenses incurred in connection with the performance of his duties, and Mr. Rutledge is entitled to use Company aircraft for such travel and for commuting and up to 12565 hours of discretionary personal use per calendar year (without carryover). The Rutledge Agreement contains a two-year non-compete provision and a two-year non-solicitation clause. Pursuant to the terms of the Rutledge Agreement, Mr. Rutledge will step down from his position as the Executive Chairman of the Company and the Board of Directors at the end of his employment term.
John BickhamRichard J. DiGeronimo
Effective as of January 1, 2021, Charter entered into an amended and restated employment agreement with John Bickham (the “Bickham Agreement”). The Bickham Agreement provides that Mr. Bickham will continue to serve as the President and Chief Operating Officer until he transitions to Vice Chairman at a time to be determined between July 1, 2021 and December 31, 2021 at the request of the CEO and will have duties commensurate with such positions. The Bickham Agreement further provides that he will devote substantially all of his business time and efforts to the business and affairs of the Company through December 31, 2021 and during the period from January 1,September 20, 2022, through December 31, 2022 (the “Transition Period”), Mr. Bickham will devote fifty percent of his business time and efforts to the business and affairs of the Company. Under the Bickham Agreement, commencing January 1, 2021, Mr. Bickham is to receive an annual base salary of at least $1,875,000 through December 31, 2021 and $937,500 during the Transition Period. Mr. Bickham is eligible to participate in the Executive Bonus Plan with a target bonus equal to 200% of base salary. Mr. Bickham is also eligible to participate in other employee benefit plans, programs and arrangements available to other senior executives. In addition, Charter must reimburse Mr. Bickham for all reasonable and necessary expenses incurred in connection with the performance of his duties, and Mr. Bickham is entitled to use Company aircraft for such travel and for up to 80 hours (40 hours during the Transition Period) of discretionary personal use per calendar year (without carryover). The Bickham Agreement contains a two-year non-compete provision and a two-year non-solicitation clause. Mr. Bickham plans to retire following the end of the term of the Bickham Agreement.
Rich DiGeronimo
Effective as of July 1, 2019, Charter and Mr. DiGeronimo entered into an amended and restated employment agreement (thewhich was amended effective as of February 22, 2023 (collectively, the “DiGeronimo Agreement”). The DiGeronimo Agreement provides that effective December 1, 2022, Mr. DiGeronimo shall bebecame employed in an executive capacity as ChiefPresident, Product and Technology Officer with such responsibilities, duties and authority as are customary for such role, at a base salary of $1,000,000$1,450,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Mr. DiGeronimo’s base salary increased to $1,450,000 effective September 20, 2022 in connection with his December 1, 2022 promotion to President, Product & Technology. The DiGeronimo agreementAgreement provides that he is eligible to participate in the Executive Bonus Plan with a target bonus of 160%200% of his annual base salary.salary and he received an equity grant of $10,000,000, delivered in 90% stock options and 10% RSUs, on January 17, 2023. Mr. DiGeronimo’s target bonus increased to 200% effective September 20, 2022 and he also received an equity grant of $800,000, delivered in 90% stock options and 10% RSUs, on such date in connection with his December 1, 2022 promotion to President, Product & Technology. He is also eligible to receive such other employee benefits as are generally made available to other senior executives. In addition, Charter must reimburse Mr. DiGeronimo for all reasonable and necessary expenses incurred in connection with the performance of his duties.duties and Mr. DiGeronimo is entitled to use Company aircraft for such travel and for up to 40 hours of discretionary personal use per calendar year (without carryover). The DiGeronimo Agreement has an initial term from the effective date through JulyDecember 1, 20222025 provided that the term can be extended by the Company for unlimited one-year periods. The DiGeronimo Agreement contains a two-year non-compete provision and a one-year non-solicitation clause.
Charter Communications | 5154 | 20212023 Proxy Statement
David G. Ellen
Effective as of July 1, 2016,2021, Charter entered into an amended and restated employment agreement with David G.Mr. Ellen, (thewhich was amended effective as of October 27, 2022 (collectively, the “Ellen Agreement”). The Ellen Agreement provides that Mr. Ellen shall be employed in an executive capacity as Senior Executive Vice President with the authorities, duties and responsibilities for overseeing: (i) the followingoverseeing certain business and corporate functions: Programming, Policy (in partnership with Government Affairs), Spectrum Networks (including RSNsfunctions and the local newscertain legal and sports networks), Human Resources (including Diversity and Labor Relations), Communications and Security; and (ii) the legal group (x) supporting the Programming, Policy, Spectrum Networks, Product and Labor Relations functions as well as (y) handling regulatory compliance for a term expiring on July 1, 2021.functions. The Ellen Agreement provides that Mr. Ellen will receive a base salary of $1,250,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Mr. Ellen is also eligible to participate in the Executive Bonus Plan with a target bonus of not less than 160% of his annual base salary. Mr. Ellen is also eligible to participate in other employee benefit plans, programs and arrangements available to other senior executives. In addition, Charter must reimburse Mr. Ellen for all reasonable and necessary expenses incurred in connection with the performance of his duties, and Mr. Ellen is entitled to use Company aircraft for such travel and for up to 30 hours of discretionary personal use per calendar year (without carryover). The Ellen Agreement contains a two-year non-compete provision and a one-year non-solicitation clause.
Christopher L. WinfreyJessica M. Fischer
Effective as of May 18, 2016,February 5, 2023, Charter and Mr. WinfreyMs. Fischer entered into an employment agreement (the “Winfrey“Fischer Agreement”). The WinfreyFischer Agreement provides that Mr. WinfreyMs. Fischer shall be employed in an executive capacity as Chief Financial Officer with such responsibilities, duties and authority as are customary for such role, including, but not limited to, overall management responsibility for Charter’s financial and accounting functions, at a base salary of $850,000$800,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Under the WinfreyThe Fischer Agreement heprovides that Ms. Fischer is also eligible to participate in the Executive Bonus Plan with a target bonus of not less than 150% of hisher annual base salary. Mr. Winfrey received an annual base salary increase in 2019 to $1,000,000 and an increase in his target bonus to 160% of his annual base salary. HeShe is also eligible to receive such other employee benefits as are generally made available to other senior executives. In addition, Charter must reimburse Ms. Fischer for all reasonable and necessary expenses incurred in connection with the performance of her duties. The Fischer Agreement has an initial term from the effective date through February 5, 2025 provided that the term can be extended by the Company for unlimited one-year periods. The Fischer Agreement contains a two-year non-compete provision and a one-year non-solicitation clause.
Jonathan Hargis
Effective as of May 18, 2021, Charter and Mr. WinfreyHargis entered into an employment agreement, which was amended effective as of April 1, 2022 (collectively, the “Hargis Agreement”). The Hargis Agreement provided a base salary of $700,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Mr. Hargis’s base salary decreased from $700,000 to $350,000 effective April 1, 2022 in connection with the amendment to his employment agreement and his transition to the role of Special Advisor to the COO, also effective as of such date. The Hargis Agreement provided that Mr. Hargis was eligible to participate in the Executive Bonus Plan with a target bonus of 150% of his annual base salary. He was also eligible to receive such other employee benefits as are generally made available to other senior executives. In addition, Charter was obligated to reimburse Mr. Hargis for all reasonable and necessary expenses incurred in connection with the performance of his duties. The WinfreyHargis Agreement has an initialhad a term from the effective date through May 18, 2021 provided thatDecember 31, 2022, the term can be extended bydate of Mr. Hargis’s retirement from the Company for unlimited one-year periods.Company. The WinfreyHargis Agreement contains a two-year non-compete provision and a one year one-year non-solicitation clause. clause following expiration of the term.
Separation and Related Arrangements
Named Executive Officers
Unless otherwise noted, the stock price used in the separation tables that follow is based on $661.55$339.10 per share, the closing price of Charter’s Class A common stock on the NASDAQ Global Select Market on December 31, 2020.30, 2022. The paragraphs that follow describe the payments that each NEO would have received assuming the applicable termination event occurred on December 31, 2020.2022. The descriptions that follow cover only information regarding benefits that are not generally available to other employees. Benefits generally available to other employees include:
Salary earned through date of termination;
• | Salary earned through date of termination; |
Lump sum payment for COBRA coverage for the period of severance, if applicable; and
• | Lump sum payment for COBRA coverage; and |
Lump sum payment of accrued and unused vacation.
• | Lump sum payment of accrued and unused vacation. |
As used in the following sections:
• | “Severance”: NEOs may be eligible for certain payments following the occurrence of certain termination events specified in their employment agreements. If eligible for severance: (1) Mr. |
Charter Communications | 55 | 2023 Proxy Statement
and one-half times his applicable annual base salary and target bonus; and (2) |
Charter Communications | 52 | 2021 Proxy Statement
• | “Bonus”: As used in the tables below, “Bonus” is the target bonus set forth and defined in each NEO’s employment |
• | “Stock Options |
Termination by Charter for Cause or a Voluntary Termination by the Executive without Good Reason
Under the current employment agreements, equity award agreements and Company policies applicable to our NEOs, we do not provide any severance in the event of a termination by the Company for cause or a voluntary termination by aan NEO without good reason, each NEO would only be entitled to any bonus earned for periods ending on or before the termination date but not yet paid as of such date, including a bonus under the 2022 Executive Bonus Plan for a termination occurring on December 31, 2022. NEOs are otherwise not provided any severance and all bonus awards and unvested equity, except for grants made in or after 2020 to Mr. Rutledge, will be forfeited and cancelled effective as of the date of termination. Under Mr. Rutledge’s amended employment agreement, stock option awards granted in or after 2020 pursuant to the employment agreement and outstanding at least one year at the time of termination will pro rata vest upon a voluntary resignation without good reason and continue to vest should such resignation occur after a transition negotiation period as defined in the employment agreement; in each case, such vested stock options will remain exercisable for the original 10-year term. As of December 31, 2020, Mr. Rutledge had no awards that were eligible for pro rata or continued vesting upon a voluntary resignation without good reason. Under the long-term incentiveequity award agreements with our NEOs, vested stock options generally may be exercised for a period of time not to exceed six months from the effective date offollowing a for cause/voluntary termination, or through the optionoriginal expiration date, if sooner. The performance-vesting options granted to Mr. Bickham in 2016 provide that he may exercise the options for up to three years following a voluntary termination without good reason. “Forearlier.
“For cause” is generally defined under our NEOs’ employment agreements and applicable Company policies to include: willful breaches of material obligations, fiduciary duties, the Company’s code of conduct or other material Company policies;policies (which, in the case of Messrs. Rutledge and Winfrey, causes or should reasonably be expected to cause substantial injury to the business or reputation of the Company); acts of fraud or willful and material misrepresentations or concealments from the Company or boardthe Board of directors;Directors; misappropriation of a material amount of Company property; criminal convictions, guilty or no contest pleas with respect to felonies or any crime expected to havematerially adversely affect the Company; or admission or finding of liability for a material negative impactknowing and deliberate breach of any securities laws (which, in the case of Messrs. Rutledge and Winfrey, materially adversely affects or crimes relatedcould reasonably be expected to materially adversely affect the Company). Under our employment agreements with Ms. Fischer and Messrs. DiGeronimo, Ellen and Hargis, “for cause” also includes criminal convictions, guilty or no contest pleas with respect to fraud, embezzlement, dishonesty, breach of trust or moral turpitude; admissionillegal possession or finding of liability for knowing or deliberate breach of any securities laws; illegal possessionuse of a controlled substance;substance or excessive alcohol use, in each case in connection with executive’s duties, or otherwise on the Company’s premises or duringat a Company function; gross neglect of duty or willful misconduct related to duties; or willful or grossgrossly negligent commission of an act or willful failure to act in connection with executive’s duties which causes or is reasonably expected to cause substantial economic injury to the business reputation of the Company. Under our employment agreements with Messrs. Rutledge and Bickham, “for cause” includes the foregoing factors amended to read that breaches of material obligations and fiduciary duties, material misrepresentations and concealments and failure to adhere to Company policies must be willful and reasonably expected to cause substantial injury to the business or reputation of the Company.
For a definition of “good reason”, see the section below, titled “Termination by the Company without Cause or by the Executive for Good Reason (other than for a Change in Control)”.
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 7,181,507 | — | — | 7,181,507 | |||||||||||||||
Christopher L. Winfrey | — | 2,634,932 | — | — | 2,634,932 | |||||||||||||||
Richard J. DiGeronimo | — | 2,253,973 | — | — | 2,253,973 | |||||||||||||||
David G. Ellen | — | 2,000,000 | — | — | 2,000,000 | |||||||||||||||
Jessica M. Fischer | — | 1,050,000 | — | — | 1,050,000 | |||||||||||||||
Jonathan Hargis | — | 654,452 | — | — | 654,452 |
Charter Communications | 56 | 2023 Proxy Statement
(1) | No severance is payable in the event of a termination by Charter for cause or a voluntary termination by the executive without good reason. |
(2) | “Bonus” is the bonus payable under the 2022 Executive Bonus Plan, which would be earned but unpaid for all NEOs upon a termination on December 31, 2022; performance attainment for such bonuses is assumed at 100% for the purposes of these separation tables. Upon any termination, all NEOs are entitled to any bonus earned for a performance period ending on or before the termination date but unpaid as of such date, and Mr. Rutledge is also entitled to a pro rata bonus in the year of termination for a voluntary termination by the executive without good reason occurring during the bonus plan year. |
(3) | Upon a termination by Charter for cause, all unvested stock option grants made to our NEOs will be forfeited and cancelled. Upon a voluntary resignation without good reason, all unvested stock option grants made to our NEOs will be forfeited and cancelled with the exception of stock options granted to Mr. Rutledge in or after 2020, which will continue to vest through their original vesting date if they have been outstanding at least one year at the time of termination and will otherwise pro rata vest; in each case such stock options will remain exercisable through their original expiration date. All of Mr. Rutledge’s stock options subject to either continued or pro rata vesting were underwater based on the December 30, 2022 closing stock price of $339.10. |
(4) | Upon a termination by Charter for cause or a voluntary resignation by the executive without good reason, all unvested time-vesting restricted stock unit grants made to our NEOs will be forfeited and cancelled. |
Termination in Connection with Expiration of Term or by Mutual Agreement
Under the employment agreements for Messrs. Rutledge, Winfrey, DiGeronimo and Ellen, Charter may be required to make certain payments to the executive and the executive may be entitled to pro rata or continued vesting of unvested equity awards in connection with the expiration of the term of their agreements and, in the case of Mr. Ellen, upon mutual agreement between him and Charter on or before the expiration of the term of his agreement.
Mr. Rutledge’s employment terminates upon the expiration of the term of his agreement on November 30, 2023, at which time he would be entitled to a pro rata bonus for the year of termination, his stock options granted pursuant to his employment agreement would continue to vest, and such options would remain exercisable through their original expiration date. Unless otherwise renewed or extended, Mr. Winfrey’s employment will terminate immediately upon the expiration of the term of his employment agreement on December 1, 2025 and he would be entitled to a pro rata bonus for the year of termination, his stock options granted on or after September 22, 2022 and pursuant to his employment agreement would continue to vest, and such options would remain exercisable through their original expiration date. Unless otherwise renewed or extended, Mr. DiGeronimo may terminate his employment for any reason within 30 days following the expiration of the term of his employment agreement on December 1, 2025, at which time he would be entitled to a pro rata bonus for the year of termination, his stock options and restricted stock unit awards granted on or after September 22, 2022 and pursuant to his employment agreement would pro rata vest, and such options would remain exercisable until the fifth anniversary of the date of his termination, or the original expiration date, if earlier. Unless otherwise renewed or extended, upon the termination of Mr. Ellen’s employment in connection with the expiration of the term of his employment agreement on December 1, 2023 or upon mutual agreement between Mr. Ellen and the Company prior to such date, Mr. Ellen would be entitled to the same payments, pro rata vesting of unvested equity awards, and time to exercise vested stock options post-termination as set forth below for a termination by the Company without cause or by Mr. Ellen for good reason. The respective terms for Messrs. Rutledge, Winfrey, DiGeronimo and Ellen’s employment agreements all expire in or after 2023, and no payment or benefit amounts would therefore apply as of December 31, 2022, except with respect to Mr. Ellen whose employment could be terminated by mutual agreement between him and Charter prior to the expiration of the term of his employment agreement and resulting in the same payments, pro rata vesting of unvested equity awards, and time to exercise vested stock options post-termination as set forth below for a termination by the Company without cause or by Mr. Ellen for good reason.
Termination due to Death or Disability
Under the current employment agreements, equity award agreements and Company policies, as applicable, for each of our NEOs, we may be required to make certain payments to, or allow full equity vesting for, these executives or their estates or beneficiaries in the event that the executive is terminated as a result of death or “disability.” Under the equity award agreements with our NEOs, vested stock options generally may be exercised for a period of eighteen months following a termination due to death or disability, or through the original expiration date, if earlier. Pursuant to Mr. Rutledge’s employment agreement, his stock options granted in or after 2020 will remain exercisable through their original expiration date.
Charter Communications | 57 | 2023 Proxy Statement
An executive is deemed to have a “disability” if, due to illness or injury: the executive is unable to perform his or her duties without accommodation for a certain period of time; or the executive is considered disabled for the purposes of receiving long term disability benefits under a participating plan or policy. In the event there is a period of time during which aan NEO is not being paid annual base salary and not receiving long-term disability insurance payments, the executive will receive interim payments equal to such unpaid disability insurance payments until commencement of disability insurance payments.
Charter Communications | 53 | 2021 Proxy Statement
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 6,270,492 | 12,557,467 | — | 18,827,958 | |||||||||||||||
John Bickham | 110,971,176 | 3,000,000 | 2,879,918 | — | 116,851,094 | |||||||||||||||
Rich DiGeronimo | — | 1,600,000 | 22,925,196 | 1,681,660 | 26,206,856 | |||||||||||||||
David Ellen | — | 2,000,000 | 6,946,169 | 969,171 | 9,915,340 | |||||||||||||||
Christopher L. Winfrey | — | 1,600,000 | 8,335,403 | 1,163,005 | 11,098,408 |
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 7,181,507 | — | — | 7,181,507 | |||||||||||||||
Christopher L. Winfrey | — | 2,634,932 | — | 975,591 | 3,610,523 | |||||||||||||||
Richard J. DiGeronimo | — | 2,253,973 | — | 1,069,182 | 3,323,155 | |||||||||||||||
David G. Ellen | — | 2,000,000 | — | 1,096,649 | 3,096,649 | |||||||||||||||
Jessica M. Fischer | — | 1,050,000 | — | 464,228 | 1,514,228 | |||||||||||||||
Jonathan Hargis | — | 654,452 | — | 680,235 | 1,334,687 |
(1) | No severance is payable in the event of a termination based on death or disability of any |
(2) |
|
(3) | All unvested time-vesting option grants made to our NEOs are subject to full vesting |
(4) | All unvested time-vesting restricted stock unit grants made to our NEOs are subject to full vesting |
Termination due to Retirement by the Executive
In the event that an NEO terminates his or her employment with Charter due to retirement (i) no severance or bonus amounts are payable, (ii) time-vesting stock option grants are subject to pro rata vesting after the first anniversary of the respective award’s grant date, and (iii) time-vesting restricted stock unit grants are subject to pro rata vesting after the first anniversary of the respective award’s grant date. As to performance-vesting option awards and restricted stock unit awards granted in 2016, all of the unvested awards would be cancelled in the event of an executive’s retirement on December 31, 2020.
Charter generally defines “retirement” eligibility in its long-term incentive plan documents as the employee’s age (at least 55) plus years of service equal to 70.70 (with a minimum of 5 years of service required for grants made in or after 2021). Of the NEOs, only Mr.Messrs. Rutledge and Mr. Bickham meetHargis met the “rule of 70” retirement qualification however, neither of them had any time-vesting awards as of December 31, 2020 that would qualify for pro rata vesting. Noneand none of the other NEOs were eligible for retirement at December 31, 2020.2022. Under the current employment agreements, equity award agreements and Company policies applicable to our NEOs, in the event that an NEO terminates his or her employment with Charter due to retirement (i) no severance amounts are payable, (ii) for grants made prior to 2021, unvested time-vesting stock option and restricted stock unit grants are subject to pro rata vesting after the first anniversary of the respective award’s grant date and vested stock options remain exercisable for three years following termination or through the original expiration date, if earlier, and (iii) for grants made in or after 2021, unvested time-vesting stock option and restricted stock unit grants are subject to continued vesting through the original vesting date if retirement occurs at or above age 60 and are otherwise subject to pro rata vesting after the first anniversary of the respective award’s grant date. For a retirement at or above age 60, stock option awards remain exercisable for five years after vesting or through the original expiration date, if earlier, and for a retirement at or above age 55 but below age 60, stock option awards remain exercisable for three years following retirement or through the original expiration date, if earlier. Irrespective of whether they are retirement eligible, all NEOs would be entitled to any bonus earned for periods ending on or before the termination date but not yet paid as of such date, including for a termination occurring as of December 31, 2022. Mr. Hargis was also eligible for a pro rata bonus upon his retirement at any time during the 2022 calendar year.
Charter Communications | 58 | 2023 Proxy Statement
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 7,181,507 | — | — | 7,181,507 | |||||||||||||||
Christopher L. Winfrey | — | 2,634,932 | — | — | 2,634,932 | |||||||||||||||
Richard J. DiGeronimo | — | 2,253,973 | — | — | 2,253,973 | |||||||||||||||
David G. Ellen | — | 2,000,000 | — | — | 2,000,000 | |||||||||||||||
Jessica M. Fischer | — | 1,050,000 | — | — | 1,050,000 | |||||||||||||||
Jonathan Hargis | — | 654,452 | — | 676,155 | 1,330,607 |
(1) | No severance is payable in the event of the retirement of any NEO. |
(2) | “Bonus” is the bonus payable under the 2022 Executive Bonus Plan, which would be earned but unpaid for all NEOs upon a termination on December 31, 2022; performance attainment for such bonuses is assumed at 100% for the purposes of these separation tables. All NEOs are entitled to any bonus earned for a performance period ending on or before the termination date but unpaid as of such date, and Mr. Rutledge is also entitled to a pro rata bonus in the year of termination for a voluntary termination by the executive without good reason occurring during the bonus plan year. |
(3) | Mr. Rutledge’s employment agreement specifies the treatment of his unvested stock options upon termination and does not provide for any vesting treatment specific to retirement. Instead, were Mr. Rutledge to retire as of December 31, 2022, his stock options granted on November 3, 2020 and January 15, 2021 would continue to vest through their original vesting date and his stock options granted on January 18, 2022 would pro rata vest, as described further in the section above regarding a voluntary termination by the executive without good reason. Upon Mr. Hargis’s retirement on December 31, 2022, his January 15, 2020 stock options pro rata vested and his stock options granted on January 15, 2021, July 15, 2021, and January 18, 2022 remained outstanding and will continue to vest through their original respective vesting dates. All of Messrs. Rutledge and Hargis’s stock options subject to pro rata or continued vesting were underwater based on the December 30, 2022 closing stock price of $339.10. |
(4) | Upon Mr. Hargis’s retirement December 31, 2022, his January 15, 2020 RSUs pro rata vested and his RSUs granted on January 15, 2021, July 15, 2021, and January 18, 2022 remained outstanding and will continue to vest through their original respective vesting dates. |
Termination by Charter Without Cause or by the Executive for Good Reason (other than for a Change in Control)
In the event that Charter terminates aan NEO’s employment without cause or the executive terminates his or her employment with Charter for good reason other than in connection with a change in control, Charter may be required to make certain payments to the executive and the executive may be entitled to pro rata or continued vesting of unvested equity awards granted to the executive. Under the equity award agreements with our NEOs, vested stock options generally may be exercised for a period of six months following a for cause/voluntary termination, or through the original expiration date, if earlier. Pursuant to Mr. Rutledge’s employment agreement, his stock options granted in or after 2020 will remain exercisable through their original expiration date.
Charter Communications | 54 | 2021 Proxy Statement
For a definition of a “for cause,” see the prior section titled “Termination by Charter for Cause or a Voluntary Termination by the Executive without Good Reason.”
AAn NEO may generally only terminate his or her employment for “good reason” following thirty (30) days written notice to the Company of his or her intent to terminate, or, in certain circumstances, advance notice to the Company detailing the “good reason” and giving the Company an opportunity to cure prior to termination. As the term is used in the employment agreements of our NEOs, “good reason” includes: a reduction in base salary or bonus; a material reductionadverse change or diminution in title, authority, duties, or responsibilities of the executive or of the executive’s reporting structure;executive; a material failure by the Company to comply with provisions of the executive’s employment agreement including paying compensation when due anddue; changing the location of the executive’s primary workplace;workplace by more than 50 miles (for Ms. Fischer and Messrs. DiGeronimo, Ellen, Hargis and Winfrey); any change in reporting structure such that the executive no longer reports directly to the CEO (for Mr. Ellen) or the Board (for Messrs.
Charter Communications | 59 | 2023 Proxy Statement
Rutledge and Winfrey); any failure by a successor company to assume the executive’s employment agreement following a change in control; or, for Mr. Rutledge, a change in control.
For a definition of “change in control”, see the section immediately following titled “Termination within 30 days before or 1312 months after Change in Control for without Cause or for Good Reason.”
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | 25,000,000 | 6,270,492 | 248,251,664 | 39,879,557 | 319,401,713 | |||||||||||||||
John Bickham | 122,221,176 | 3,000,000 | 2,879,918 | — | 128,101,094 | |||||||||||||||
Rich DiGeronimo | 5,200,000 | 1,600,000 | 15,791,902 | 1,056,756 | 23,648,658 | |||||||||||||||
David Ellen | 6,500,000 | 2,000,000 | 2,224,549 | 310,382 | 11,034,931 | |||||||||||||||
Christopher L. Winfrey | 5,200,000 | 1,600,000 | 2,669,458 | 372,459 | 9,841,917 |
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 7,181,507 | — | — | 7,181,507 | |||||||||||||||
Christopher L. Winfrey | 14,875,000 | 2,634,932 | — | 826,757 | 18,336,689 | |||||||||||||||
Richard J. DiGeronimo | 8,700,000 | 2,253,973 | — | 574,817 | 11,528,790 | |||||||||||||||
David G. Ellen | 6,500,000 | 2,000,000 | — | 773,121 | 9,273,121 | |||||||||||||||
Jessica M. Fischer | 3,500,000 | 1,050,000 | — | 263,611 | 4,813,611 | |||||||||||||||
Jonathan Hargis | — | 654,452 | — | 676,155 | 1,330,607 |
(1) |
|
(2) |
|
(3) | Except for |
(4) | All unvested time-vesting |
Charter Communications | 55 | 2021 Proxy Statement
Termination within 30 days before or 12 months after Change in Control without Cause or for Good Reason
Under the employment agreements, equity award agreements and Company policies, as applicable, for each of our NEOs, we may be required to make payments to, or allow pro rata or full vesting of unvested equity awards for, these executives in the event that, within 30 days before, or 12 months following, the occurrence of a change in control, Charter or any of its subsidiaries terminateterminates the executive’s employment without cause or he or she terminates his or her employment with Charter and its subsidiaries for good reason.
A “change in control” is defined to include: any person or entity acquires beneficial ownership of 35% or more of our outstanding common stock or combined voting power over our outstanding voting securities; the incumbent directors (as defined in the employment agreements) cease to constitute a majority of the boardBoard of directors;Directors; the completion of certain corporate transactions including a reorganization or merger subject to certain exceptions; the complete liquidation or dissolution of the Company; and the sale or disposition of all or substantially all of the assets of the Company.
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | 25,000,000 | 6,270,492 | 248,251,664 | 39,879,557 | 319,401,713 | |||||||||||||||
John Bickham | 11,250,000 | 3,000,000 | 108,093,760 | 17,724,909 | 140,068,669 | |||||||||||||||
Rich DiGeronimo | 5,200,000 | 1,600,000 | 22,925,196 | 1,681,660 | 31,406,856 | |||||||||||||||
David Ellen | 6,500,000 | 2,000,000 | 66,664,397 | 10,940,052 | 86,104,449 | |||||||||||||||
Christopher L. Winfrey | 5,200,000 | 1,600,000 | 81,324,348 | 13,348,756 | 101,473,104 |
Charter Communications | 60 | 2023 Proxy Statement
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 7,181,507 | — | — | 7,181,507 | |||||||||||||||
Christopher L. Winfrey | 14,875,000 | 2,634,932 | — | 975,591 | 18,485,523 | |||||||||||||||
Richard J. DiGeronimo | 8,700,000 | 2,253,973 | — | 1,069,182 | 12,023,155 | |||||||||||||||
David G. Ellen | 6,500,000 | 2,000,000 | — | 1,096,649 | 9,596,649 | |||||||||||||||
Jessica M. Fischer | 3,500,000 | 1,050,000 | — | 464,228 | 5,014,228 | |||||||||||||||
Jonathan Hargis | — | 654,452 | — | 680,235 | 1,334,687 |
(1) |
|
(2) |
|
(3) |
|
(4) | All unvested time-vesting restricted stock unit grants made to our NEOs are subject to full |
Charter Communications | 56 | 2021 Proxy Statement
Limitation of Directors’ Liability and Indemnification Matters
Our Certificate of Incorporation limits the liability of directors to the maximum extent permitted by Delaware law. The Delaware General Corporation Law provides that a corporation may eliminate or limit the personal liability of a director for monetary damages for breach of fiduciary duty as a director, except for liability for:
(1) | any breach of the director’s duty of loyalty to the corporation and its stockholders; |
(2) | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
(3) | unlawful payments of dividends or unlawful stock purchases or redemptions; or |
(4) | any transaction from which the director derived an improper personal benefit. |
Our Bylaws provide that we will indemnify all persons whom we may indemnify pursuant thereto to the maximum extent permitted by law from and against any claims, damages, liabilities, losses, costs or expenses incurred in connection with or arising out of the performance by them of their duties for us or our subsidiaries.
We have also entered into indemnification agreements that require us to indemnify each of our directors and executive officers to the fullest extent permitted by law for any claims made against each of these persons because he or she is, was or may be deemed to be a stockholder, director, officer, employee, controlling person, agent or fiduciary of Charter or any of our subsidiaries. We are obligated to pay the expenses of these persons in connection with any claims that are subject to the agreement.
Charter Communications | 5761 | 20212023 Proxy Statement
Certain Beneficial Owners of Charter Class A Common Stock
The following table sets forth information as of February 26, 202124, 2023 regarding the beneficial ownership of Charter Class A common stock by:
each holder of more than 5% of outstanding shares Charter Class A common stock;
• | each holder of more than 5% of outstanding shares Charter Class A common stock; |
each Charter director and named executive officer; and
• | each Charter director and named executive officer; and |
all Charter directors and executive officers as a group.
• | all Charter directors and executive officers as a group. |
Shares Beneficially Owned(1) | ||||||||
Name | Number | Percent of Class | ||||||
5% Stockholders: | ||||||||
Liberty Broadband Corporation(2) 12300 Liberty Boulevard Englewood, CO 80112 | 59,465,776 | 27.62 | % | |||||
Advance/Newhouse Partnership(3) One World Trade Center, 44th Floor New York, NY 10007 | 27,163,116 | 12.62 | % | |||||
The Vanguard Group, Inc.(4) 100 Vanguard Blvd. Malvern, PA 19355 | 10,812,887 | 5.02 | % | |||||
Directors and Executive Officers: | ||||||||
W. Lance Conn(5) | 4,908 | * | ||||||
Kim C. Goodman(6) | 3,313 | * | ||||||
Craig A. Jacobson(7) | 10,278 | * | ||||||
Gregory B. Maffei(8) | 4,304 | * | ||||||
John D. Markley, Jr.(9) | 14,343 | * | ||||||
David C. Merritt(10) | 9,632 | * | ||||||
James E. Meyer(11) | 1,333 | * | ||||||
Steven A. Miron(12) | 5,569 | * | ||||||
Balan Nair(13) | 4,948 | * | ||||||
Michael Newhouse(14) | 2,549 | * | ||||||
Mauricio Ramos(15) | 4,331 | * | ||||||
Thomas M. Rutledge(16) | 1,668,532 | * | ||||||
Eric L. Zinterhofer(17) | 18,063 | * | ||||||
John Bickham(18) | 127,578 | * | ||||||
David G. Ellen(19) | 169,747 | * | ||||||
Christopher L. Winfrey(20) | 602,778 | * | ||||||
Rich DiGeronimo(21) | 28,126 | * | ||||||
Richard R. Dykhouse(22) | 123,296 | * | ||||||
Jonathan Hargis | 8,542 | * | ||||||
Kevin Howard(23) | 23,075 | * | ||||||
All executive officers and directors as a group (20 persons) (24) | 2,835,245 | 1 | % |
Shares Beneficially Owned(1) | ||||||||
Name | Number | Percent of Class | ||||||
5% Stockholders: | ||||||||
Liberty Broadband Corporation(2) 12300 Liberty Boulevard Englewood, CO 80112 | 47,099,789 | 27.85 | % | |||||
Advance/Newhouse Partnership(3) One World Trade Center, 44th Floor New York, NY 10007 | 21,105,370 | 12.48 | % | |||||
The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355 | 8,595,171 | 5.08 | % | |||||
Dodge & Cox(5) 555 California Street, 40th Floor San Francisco, CA 94104 | 8,471,513 | 5.01 | % | |||||
Directors and Executive Officers: | ||||||||
W. Lance Conn(6) | 5,587 | * | ||||||
Kim C. Goodman(7) | 4,417 | * | ||||||
Craig A. Jacobson(8) | 11,382 | * | ||||||
Gregory B. Maffei(9) | 5,408 | * | ||||||
John D. Markley, Jr.(10) | 15,022 | * | ||||||
David C. Merritt(11) | 9,311 | * | ||||||
James E. Meyer(12) | 2,012 | * | ||||||
Steven A. Miron(13) | 9,173 | * | ||||||
Balan Nair(14) | 6,052 | * | ||||||
Michael A. Newhouse(15) | 3,228 | * | ||||||
Mauricio Ramos(16) | 5,252 | * | ||||||
Thomas M. Rutledge(17) | 2,394,684 | 1.42 | % | |||||
Eric L. Zinterhofer(18) | 46,901 | * | ||||||
Christopher L. Winfrey(19) | 837,302 | * | ||||||
Richard J. DiGeronimo(20) | 87,794 | * | ||||||
David G. Ellen(21) | 259,750 | * | ||||||
Jessica M. Fischer(22) | 10,008 | * | ||||||
Jonathan Hargis(23) | 30,920 | * | ||||||
All executive officers and directors as a group (19 persons) (24) | 3,919,401 | 2.32 | % |
* | less than 1% |
Charter Communications | 62 | 2023 Proxy Statement
(1) | Beneficial ownership is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting |
Charter Communications | 58 | 2021 Proxy Statement
thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Shares shown in the table above include shares held in the beneficial owner’s name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owner’s account. Common stock subject to options that are currently exercisable or exercisable within 60 days of February |
(2) | Based on a Schedule 13D/A, dated |
Charter Communications | 63 | 2023 Proxy Statement
(3) | Based on a Schedule 13D/A, Amendment No. |
(4) | Based on a Schedule 13G/A filed by The Vanguard Group |
(5) |
|
(6) | Includes |
(7) | Includes |
(8) | Includes 646 shares of restricted stock that are not yet vested but eligible to be voted. |
(9) | Includes 646 shares of restricted stock for Mr. Maffei that are not yet vested but eligible to be voted. Mr. Maffei is the President and Chief Executive Officer of Liberty Broadband. Liberty Broadband beneficially owns |
Includes |
Includes |
Charter Communications | 59 | 2021 Proxy Statement
|
(12) | Includes |
(13) | Includes |
(14) | Includes |
(15) | Includes |
(16) | Includes |
|
Includes |
Includes |
Charter Communications | 64 | 2023 Proxy Statement
Includes |
(20) | Includes 82,312 options that are vested and exercisable. |
(21) | Includes |
(22) | Includes |
(23) | Includes |
(24) | Includes options and restricted stock units that are exercisable or eligible to become vested within sixty (60) days of February |
Charter Communications | 6065 | 20212023 Proxy Statement
Certain Relationships and Related Transactions
We maintain written policies and procedures covering related party transactions. The Audit Committee reviews the material facts of related party transactions.Related Party Transactions (as defined below). Management has various procedures in place, e.g., our Code of Conduct, which requires annual certifications from employees that are designed to identify potential related party transactions. Management brings those to the Audit Committee for review as appropriate. Our Related Party Transaction Policy provides that a “Related Party Transaction” is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which: (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year; (2) the Company is a participant; and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). A “Related Party” is any person: (a) who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director; (b) who is a greater than 5 percent beneficial owner of the Company’s common stock; or (c) who is an immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). Open market purchases or privately-negotiated transactions, excluding any distributions by the Company, involving any securities of the Company or its subsidiaries, are not deemed to be a “Related Party Transaction” under our Related Party Transaction Policy.
The following sets forth certain transactions in which we are involved and in which the directors, executive officers and affiliatesother Related Parties of Charter have or may have a material interest. The indentures of our subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., require delivery of fairness opinions for transactions with affiliates involving more than $100 million. Such fairness opinions have been obtained whenever required. Charter has determined that all of our transactions entered into with affiliatesRelated Parties are in Charter’s best interest. Related Party Transactions are approved by the Audit Committee or another independent body of Charter’s boardBoard of directors.Directors.
On May 23, 2015, Charter entered into a Second Amended and Restatedthe Stockholders Agreement with Liberty Broadband, A/N and the former Charter Communications, Inc. (the “Stockholders Agreement”).Agreement. Under the terms of the Stockholders Agreement, the number of Charter’s directors is fixed at 13, and includes its chief executive officer.13. Two designees selected by A/N are members of the boardBoard of directorsDirectors of Charter and three designees selected by Liberty Broadband are members of the boardBoard of directorsDirectors of Charter. The remaining eight directors are not affiliated with either A/N or Liberty Broadband. Each of A/N and Liberty Broadband is entitled to nominate at least one director to each of the committees of Charter’s boardBoard of directors,Directors, subject to applicable stock exchange listing rules and certain specified voting or equity ownership thresholds for each of A/N and Liberty Broadband, and provided that the Nominating and Corporate Governance Committee and the Compensation and Benefits Committee each have at least a majority of directors independent from A/N, Liberty Broadband and Charter (referred to as the “unaffiliated directors”).Charter. Each of the Nominating and Corporate Governance Committee and the Compensation and Benefits Committee is currently comprised of three unaffiliated directors not designed by either A/N or Liberty Broadband and one designee of each of A/N and Liberty Broadband. A/N and Liberty Broadband also have certain other committee designation and other governance rights. Mr. Rutledge is the Executive Chairman and Mr. Winfrey is a non-voting Board observer. Pursuant to the terms of the Rutledge Agreement, Mr. Rutledge will step down from his position as the Executive Chairman of the boardCompany and the Board of Charter.Directors at the end of his employment term, and the Winfrey Agreement provides that Mr. Winfrey will be appointed as a member of the Board of Directors on or before December 31, 2023.
In connection with the closing of the Transactions, a number of agreements were entered into with Liberty Broadband and/or A/N, including the Charter Communications Holdings LLC operating agreement (the “LLC Agreement”), an exchange agreement, a registration rights agreement, a tax receivables agreement, an amendment agreement (that amended the Stockholders Agreement and the Liberty Broadband investment agreement) and a transition services agreement. These agreements were approved by the boardBoard of directors. Under the LLC agreement, during 2020Directors. In 2022, Charter paid $150 million to A/N as dividends on the 25 million convertible preferred units held by it that are entitled to a 6% annual dividend. Charter also paid approximately $2.3$110 million to A/N as tax distributions under the LLC agreementAgreement and $607,000$0.7 million to A/N under the tax receivables agreement.
In December 2017, Charter and A/N entered into an amendment to the letter agreement dated December 23, 2016 that requires A/N to sell to Charter or to Charter Holdings, on a monthly basis, a number of shares of Charter Class A common stock or Charter Holdings common units that represents a pro rata participation by A/N and its affiliates in any repurchases of shares of Charter Class A common stock from persons other than A/N effected by Charter during the immediately preceding calendar month, at a purchase price equal to the average price paid by Charter for the shares repurchased from persons other than A/N during such immediately preceding calendar month. A/N and Charter both have the right to terminate or suspend the pro rata repurchase arrangement on a prospective basis. Pursuant to the tax receivables agreement between Charter and A/N, Charter must pay to A/N 50% of the tax benefit when realized by Charter from the step-up in tax basis resulting from any future exchange or sale of the preferred and common units.
Charter Communications | 6166 | 20212023 Proxy Statement
In February 2021, Charter and Liberty Broadband entered into a letter agreement that requires Liberty Broadband to sell to Charter, on a monthly basis, a number of shares of Class A common stock representing an amount sufficient for Liberty Broadband’s ownership of Class A common stock to be reduced such that it does not exceed the ownership cap then applicable to Liberty Broadband under the Stockholders Agreement (the “LBB Cap”), at a purchase price equal to the average price paid by Charter for the shares repurchased from persons other than A/N during such immediately preceding calendar month. The letter agreement with Liberty Broadband terminates upon the earliest of (i) mutual written agreement of the parties, (ii) the termination of the Stockholders Agreement, or (iii) 12:01 a.m. following the first end date of a repurchase period occurring at least ten days after either party, in its sole discretion, delivers a written termination notice to the other party (provided, that, in the case of clause (iii), the rights and obligations of the parties under the letter agreement with Liberty Broadband survive with respect to a repurchase period ending prior to such termination). Upon the termination of the letter agreement with Liberty Broadband, the requirement of Liberty Broadband to sell shares of Class A Common Stock to Charter to the extent necessary so that Liberty Broadband’s ownership of Charter does not exceed the LBB Cap would revert to the terms of the Stockholders Agreement.
Dr. John Malone, a director emeritus of Charter and Chairman of the board of directors of Liberty Broadband and holder of 45.8%49% of voting interest in Liberty Broadband, also serves on the board of directors of Qurate Retail, Inc. (“Qurate”). As reported in Qurate’s SEC filings, Dr. Malone owns approximately 1.230.4 million shares of the Series A common stock and approximately 27.70.9 million shares of the Series A Cumulative Redeemable Preferred Stock of Qurate and has a 6.7% voting interest in Qurate for the election of directors. Mr. Gregory Maffei, a member of Charter’s Board of Directors, serves as the Chairman of the Board of Qurate. As reported in Qurate’s SEC filings, Mr. Maffeii owns approximately 0.4 million shares of the Series A common stock and approximately 9.4 million shares of the Series B common stock of Qurate and has a 40.9%19.8% voting interest in Qurate for the election of directors. Qurate wholly owns HSN, Inc. (“HSN”) and QVC, Inc. (“QVC”). The Company has programming relationships with HSN and QVC. For the year ended December 31, 2020,2022, the Company recorded revenue in aggregate of approximately $50.0$43.5 million from HSN and QVC as part of channel carriage fees and revenue sharing arrangements for home shopping sales made to customers in the Company’s footprint.
Dr. Malone and Mr. Steven Miron, a member of Charter’s board of directors, also serve on the board of directors of Discovery, Inc. (“Discovery”). As reported in Discovery’s SEC filings, Dr. Malone owns 1.2% of the series A common stock, 93.6% of the series B common stock and 3.6% of the series C common stock of Discovery and has a 27.9% voting interest in Discovery for the election of directors. As reported in Discovery’s SEC filings, Advance/Newhouse Programming Partnership (“A/N PP”), an affiliate of A/N and of which Mr. Miron is the CEO, owns 100% of the Series A-1 preferred stock of Discovery and 100% of the Series C-1 preferred stock of Discovery and has a 23.9% voting interest for matters other than the election of directors. A/N PP also has the right to appoint three directors out of a total of twelve directors to Discovery’s board. The Company purchases programming from Discovery. Based on publicly available information, the Company does not believe that Discovery would currently be considered a related party. The amount paid in the aggregate to Discovery represents less than 2% of total operating costs and expenses for the year ended December 31, 2020.
Liberty Broadband and A/N each have a number of subsidiary or affiliated companies with which Charter has customer or vendor relationships, some of which involved amounts in excess of $120,000 for 20202022 or may involve amounts in excess of $120,000 for 2021.2023. The following summarizes each of these relationships with Liberty Broadband and A/N subsidiaries and affiliates:
Advance Digital Inc., an A/N company, provides search engine marketing services to Charter. Charter paid approximately $9.5 million for these services in 2020.
• | Charter purchases advertising services and content licensing from American City Business Journals, an A/N company. Charter paid approximately $0.5 million for these services in 2022. |
Charter purchases advertising services from American City Business Journals, an A/N company. Charter paid approximately $160,000 for these services in 2020.
• | Live Nation Entertainment, Inc. (Mr. Maffei is the Chairman of the Board; and Dr. Malone has a 48.4% voting interest in Liberty Media, which owns 30.62% of the Live Nation equity) is a customer of Spectrum Enterprise and Spectrum Reach and purchased approximately $1.0 million of services during 2022. |
In August 2015, a purported stockholder of Charter, Matthew Sciabacucchi, filed a lawsuit in the Delaware Court of Chancery, on behalf of a putative class of Charter stockholders, challenging the Transactions. The lawsuit, which named as defendants Charter and certain of its current and former Board of Directors, alleged that the Transactions resulted from breaches of fiduciary duty by Charter’s directors and that Liberty Broadband improperly benefited from the challenged transactions at the expense of other Charter stockholders. On March 3, 2023, Charter, certain of Charter’s current and former directors and Liberty Broadband entered into a Stipulation and Agreement of Settlement, Compromise and Release in connection with the settlement of the Board;Sciabacucchi litigation and Dr. Malone has a 47.9% voting interest in Liberty Media, which owns 32.36%to effectuate the allocation of the Live Nation equity) is a customersettlement amount of Spectrum Enterprise$87.5 million to be paid to Charter (less plaintiffs’ attorneys’ fees), of which $49 million will be covered by Charter’s insurers and Spectrum Reach$38.5 million will be covered by Liberty Broadband. Also on March 3, 2023, Charter, Charter’s directors who are defendants in the suit and purchased approximately $151,000 of services during 2020.
Balan Nair is the President and Chief Executive Officer of Liberty Latin America (“LLA”). In 2020, CharterCharter’s insurers entered into an agreement with LLA under which Charter would sell certain excess equipmentSettlement Funding Agreements and Mutual Releases to effectuate the allocation of a type Charter no longer re-employs to LLA over a three-year period with aggregate proceedsthe insurers’ portion of approximately $1.7 million.the settlement amount among Charter’s insurers.
Charter Communications | 6267 | 20212023 Proxy Statement
Proposal No. 2: Approval, on an Advisory Basis, of the Compensation of Named Executive Officers
(Item 2 on Proxy Card)
As required by Section 14A of the Exchange Act, we are providing our shareholders with the opportunity to cast a non-binding advisory vote on the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis section above including the accompanying compensation tables.
Charter’s compensation programs are designed to create a strong linkage between the actual compensation earned by our Named Executive Officers and Company performance, and reward both growth-oriented annual operating results as well as sustainable long-term shareholder returns. The compensation structure for Charter’s NEOs results in an overall mix of pay that is highly performance-based, particularly with respect to the proportion of compensation tied to stock price appreciation via stock options and without taking into account the performance-based incentives derived from previously vested equity awards. The compensation mix delivered to the CEO and other NEOs in 2022, based on the values disclosed in the Summary Compensation Table, was as follows:
Charter believes that awards represent competitive levels of total compensation that are effectively balanced to align value realized by executives with the achievement of meaningful financial performance and the generation of shareholder returns. Charter believes that NEO total compensation opportunities – including base salary, annual incentives, and long-term equity awards – created strong alignment between executive compensation and performance outcomes in 2022, as more fully described in the Pay Versus Performance section above.
In spite of challenging market dynamics with low connect activity driven by historically low customer churn, Charter achieved meaningful customer relationship growth in 2022 – including the highest year-over-year growth in mobile lines to-date – and annual increases in both top and bottom-line financial performance. Over the course of the year, Charter continued to expand and improve services for its customers: implementing spectrum split upgrades, expanding plant capacity, and progressing rural build-out initiatives. Charter also introduced the new Spectrum One bundle in late 2022, which provides a package of Internet, Advanced Wi-Fi, and Unlimited Mobile services at a low price. For the fiscal year ended December 31, 2022, Charter achieved the following key operational and financial objectives:
• | Total customer relationships grew by 126,000, or 0.4% |
• | Mobile lines grew by 1,728,000, Internet customers by 344,000 |
• | Revenue grew by 4.5% to $54.0 billion |
• | Adjusted EBITDA grew by 4.8% to $21.6 billion(1) |
• | Free cash flow of $6.1 billion(1) |
• | Charter also purchased approximately 23.8 million shares of Charter Class A common stock and Charter Holdings common units for approximately $11.7 billion in 2022 at an average price per share of $491.48. |
(1) | See ”Non-GAAP Financial Measures” in Appendix A. |
Charter Communications | 68 | 2023 Proxy Statement
Please review the Compensation Discussion and Analysis included in this proxy statement for a detailed description and discussion of the Company’s compensation process and programs. We believe our compensation program provides the appropriate current compensation and incentivizes value creation for our stockholders.
Your vote is requested. We believe that the information regarding named executive officer compensation as disclosed within the Compensation Discussion and Analysis section of this proxy statement including the accompanying compensation tables and within the Pay Versus Performance discussion demonstrates that the Company’s executive compensation program was designed appropriately and structured to ensure the retention of talented executives and a strong alignment with the long-term interests of the Company’s stockholders. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s Named Executive Officers, as described in this proxy statement. Accordingly, the Company will ask the Company’s shareholders to vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers as disclosed under “Compensation Discussion and Analysis” pursuant to Item 402 of Regulation S-K, including the accompanying compensation tables and narrative disclosure contained in this proxy statement, is hereby APPROVED.”
Because the vote is advisory, it will not be binding on the Company, the Board or the Compensation and Benefits Committee, nor will it overrule any prior decision or require the Board or the Compensation and Benefits Committee to take any action. However, the Compensation and Benefits Committee and the Board value the opinions of the Company’s stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, the Compensation and Benefits Committee and the Board will consider stockholders’ concerns and the Compensation and Benefits Committee will evaluate whether any actions are necessary to address those concerns.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION.
Charter Communications | 69 | 2023 Proxy Statement
Proposal No. 3: Approval, on an Advisory Basis, of a Triennial Advisory Vote on Executive Compensation
(Item 3 on Proxy Card)
Pursuant to SEC rules, the Board of Directors is required to submit an advisory, nonbinding resolution to stockholders at least once every six years to determine whether advisory, nonbinding votes on the Company’s executive compensation should be held every one, two or three years. At the Company’s annual meeting of stockholders in 2017, the Company’s stockholders voted, in an advisory (nonbinding) vote, that future say-on-pay votes should be held every three years.
After careful consideration of this proposal, the Board has determined that an advisory vote on executive compensation that occurs once every three years, or a triennial vote, continues to be the most appropriate alternative for the Company at this time, and therefore the Board recommends a triennial advisory vote on executive compensation. We believe that a triennial advisory vote is the best approach for the Company based on a number of considerations, including the following:
• | As described in the Compensation Discussion and Analysis section above, one of the principles of our executive compensation program is to ensure management’s interests are aligned with our investors’ interests to support long-term value creation. Accordingly, we grant awards with multi-year service periods to encourage our Named Executive Officers to focus on long-term performance, and recommend a triennial vote which would allow our executive compensation programs to be evaluated over a similar time-frame and in relation to our long-term performance; |
• | A three-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and to implement any desired changes to our executive compensation policies and procedures; and |
• | A three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation strategies and the related business outcomes of the Company. |
We carefully review changes to our program to maintain the consistency and credibility of the program, which is important in motivating and retaining our employees. We therefore believe that a triennial vote is an appropriate frequency to provide sufficient time to thoughtfully consider and implement any appropriate changes to our executive compensation program, in light of the timing that would be required to implement any decisions related to such changes. In the future, we may determine that a more frequent advisory vote is appropriate, either in response to the vote of the Company’s stockholders on this proposal or for other reasons.
Stockholders may cast their vote on the preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting when voting on this proposal. The option of one year, two years or three years that receives the greatest number of votes cast by stockholders will be considered the frequency for the advisory vote on executive compensation that has been recommended by stockholders, even if that alternative does not receive a majority of votes cast. However, because this vote is advisory and not binding on the Board or the Company in any way, the Board may decide that it is in the best interests of the Company and its stockholders to hold an advisory vote on executive compensation more or less frequently than the option approved by the Company’s stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF “THREE YEARS” ON THE PROPOSAL RECOMMENDING THE FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION.
Charter Communications | 70 | 2023 Proxy Statement
Proposal No. 4: Ratification of the Appointment of Independent Registered Public Accounting Firm
(Item 24 on Proxy Card)
The Audit Committee of the boardBoard of directorsDirectors has appointed KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for 2021.2023. Stockholder ratification of the selection of KPMG as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or other applicable requirement. However, as a matter of corporate responsibility, the Audit Committee decided to solicit stockholder ratification of this appointment. Ratification of the appointment of KPMG as the Company’s independent registered public accounting firm is not required for KPMG’s retention; however, if the appointment is not ratified, the Audit Committee may consider re-evaluating the appointment.
KPMG has been serving as the Company’s independent registered public accounting firm since 2002. The Company has been advised that no member of KPMG had any direct financial interest or material indirect financial interest in the Company or any of its subsidiaries or, during the past three years, has had any connection with the Company or any of its subsidiaries in the capacity of promoter, underwriter, voting trustee, director, officer or employee. The Company has been advised that no other relationship exists between KPMG and the Company that impairs KPMG’s status as the independent registered public accounting firm with respect to the Company within the meaning of the Federal securities laws and the requirements of the Independence Standards Board.
Representatives of KPMG will be in attendance at the annual meeting and will have an opportunity to make a statement if they so desire. The representatives will also be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021.2023.
Charter Communications | 6371 | 20212023 Proxy Statement
KPMG acted as the Company’s independent registered public accounting firm since 2002, and, subject to ratification by stockholders at the annual meeting, KPMG is expected to serve as the Company’s independent registered public accounting firm for 2021.2023.
Services of Independent Registered Public Accounting Firm
The Audit Committee has adopted policies and procedures requiring the pre-approval of non-audit services that may be provided by our independent registered public accounting firm. We have also complied and will continue to comply with the provisions of the Sarbanes-Oxley Act of 2002 and the related SEC rules pertaining to auditor independence and audit committee pre-approval of audit and non-audit services.
Audit Fees
During each of the years ended December 31, 20202022 and 2019,2021, we incurred fees and related expenses for professional services rendered by KPMG for the audits of Charter and its subsidiaries’ financial statements, for the review of Charter and its subsidiaries’ interim financial statements, registration statement filings and offering memoranda filings totaling approximately $9 million and $8 million, respectively.million.
Audit-Related Fees
No audit-related fees to KPMG were incurred during the yearyears ended December 31, 2020 while approximately $0.2 million were incurred during the year ended December 31, 2019. These services were primarily related to diligence services.2022 and 2021.
Tax Fees
Charter incurred tax fees to KPMG of approximately $1 million and $2 million during each of the years ended December 31, 20202022 and 2019, respectively.2021.
All Other Fees
None.
The Audit Committee appoints, retains, compensates and oversees the independent registered public accounting firm (subject, if applicable, to boardBoard of directorDirector and/or stockholder ratification), and approves in advance all fees and terms for the audit engagement and non-audit engagements where non-audit services are not prohibited by Section 10A of the Securities Exchange Act, of 1934, as amended with respect to independent registered public accounting firms. Pre-approvals of non-audit services are sometimes delegated to a single member of the Audit Committee. However, any pre-approvals made by the Audit Committee’s designee are presented at the Audit Committee’s next regularly scheduled meeting. The Audit Committee has an obligation to consult with management on these matters. The Audit Committee approved 100% of the KPMG fees for the years ended December 31, 20202022 and 2019.2021. The Audit Committee considered whether the provision of non-audit services was compatible with KPMG’s independence. Each year, including 2020,2022, with respect to the proposed audit engagement, the Audit Committee reviews the proposed risk assessment process in establishing the scope of examination and the reports to be rendered.
In its capacity as a committee of the board, the Audit Committee oversees the work of the independent registered public accounting firm (including resolution of disagreements between management and the public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. The independent registered public accounting firm reports directly to the Audit Committee. In performing its functions, the Audit Committee undertakes those tasks and responsibilities that, in its judgment, most effectively contribute to and implement the purposes of the Audit Committee charter. For more detail of the Audit Committee’s authority and responsibilities, see the Company’s Audit Committee charter on the “Investor Relations” section of our website at ir.charter.com.ir.charter.com.
Charter Communications | 6472 | 20212023 Proxy Statement
The following report does not constitute soliciting materials and is not considered filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act, of 1934, as amended, unless we state otherwise.
The Audit Committee was established to oversee the Company’s accounting and financial reporting processes and the audits of the Company’s annual financial statements. In 20202022 Ms. Goodman and Messrs. Merritt and Markley served on the Audit Committee for the entire year. All members were determined by the boardBoard to be independent in accordance with the applicable corporate governance listing standards of the NASDAQ Global Select Market. The Company’s boardBoard of directorsDirectors has determined that, in its judgment, Mr. Merritt is an audit committee financial expert within the meaning of the applicable federal regulations.
The Audit Committee’s functions are detailed in a written amended and restated Audit Committee charter adopted by the boardBoard of directors,Directors, a copy of which is available on the “Investor Relations” section of our website at ir.charter.com.ir.charter.com. As more fully described in its charter, the Audit Committee reviews the Company’s financial reporting process on behalf of the boardBoard of directors.Directors. Company management has the primary responsibility for the Company’s financial statements and the reporting process. The Company’s independent registered public accounting firm is responsible for performing an audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and expressing an opinion on the conformity of the financial statements to generally accepted accounting principles. The internal auditors are responsible to the Audit Committee and the boardBoard of directorsDirectors for testing the integrity of the financial accounting and reporting control systems and such other matters as the Audit Committee and boardBoard of directorsDirectors determine. The Audit Committee held four meetings in 2020.2022.
The Audit Committee has reviewed and discussed with management and the internal auditors the Company’s audited financial statements and effectiveness of internal controls for the year ended December 31, 2020.2022. The Audit Committee has discussed the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC, including those described in Auditing Standard No. 1301, as amended (Communication with Audit Committees), with KPMG, the independent registered public accounting firm for the Company’s audited financial statements for the year ended December 31, 2020.2022.
The Audit Committee has also received the written disclosures and the letter from KPMG required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed the independence of KPMG with that firm and has considered the compatibility of non-audit services with KPMG’s independence.
Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the boardBoard of directorsDirectors that the Company��sCompany’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20202022 for filing with the SEC.
The Audit Committee evaluated KPMG’s independence, performance, qualifications, tenure, partnership rotation and relationship management and based on that evaluation approved the appointment of KPMG as the Company’s independent registered public accounting firm for 2021.2023.
DAVID C. MERRITT
KIM C. GOODMAN
JOHN D. MARKLEY, JR.
Charter Communications | 6573 | 20212023 Proxy Statement
Proposal No. 3:5: Stockholder Proposal Regarding
Lobbying Activities
(Item 35 on Proxy Card)
This proposal was submitted by theThe Service Employees International Union Pension Plans Master Trust (“SEIU”), the beneficial owner of at least $2,000 worth of shares of our Class A common stock. The proposal from SEIU reads as follows:
“WHERAS: WeWhereas, we believe in full disclosure of Charter’s and indirect lobbying activities and expenditures to assess whether Charter’s lobbying is consistent with its expressed goals and in stockholders’ beststockholder interests.
RESOLVED: the Resolved,stockholders of Charter request the preparation of a report, updated annually, disclosing:
1. | Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. |
2. | Payments by Charter used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. |
3. | Charter’s membership in and payments to any tax-exempt organization that writes and endorses model legislation. |
4. | Description of management’s decision-making process and the Board’s oversight for making payments described in sections 2 and 3 above. |
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Charter is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Charter’s website.
Supporting Statement
Charter spent $58,985,000$80,765,000 from 2010 – 20192021 on federal lobbying. This does not include state lobbying expenditures, where Charter also lobbies but disclosure is uneven or absent. For example, Charter hadlobbied in at least 310 lobbyists in 2831 states in 2019 (followthemoney.org)2021 and spent $1,595,285$2.9 million on lobbying in New YorkCalifornia from 2015 – 2021.
Charter fails to disclose its payments to trade associations and social welfare groups, or the amounts used for 2017lobbying, to stockholders. Companies can give unlimited amounts to third party groups that spend millions on lobbying and 2018.
undisclosed grassroots activity. These groups may be spending “at least double what’s publicly reported.”1Charter serves on the board of NCTA –- The Internet & Television Association, which spent $160,250,000$189,720,000 on lobbying from 2010 – 2019,2021, and is a member ofbelonged to Broadband for America, a social welfare group which was behind a campaign that “misappropriated names and personal information as part of a bidspent $4.2 million to submit more than 1.58.5 million statements favorable to their cause”fake comments to the FCC onopposing net neutrality.12 And Charter does not disclose its memberships in, or payments to, trade associations, or the amounts used for lobbying. And Charter does not disclose membership in or contributions to tax-exempt organizations thatgroups which write and endorse model legislation, such as belonging tolike the American Legislative Exchange Council (ALEC).
We are concerned thatbelieve Charter’s lack of lobbying disclosure createspresents reputational risks when its lobbying contradicts company public positions. For example, Charter states that it is committed to an open internet, yet NCTA and Broadband for America lobbied against net neutrality. While Charter is committed to diversity and inclusion, groups have asked Charter to leave ALEC because of its voter restriction efforts.23 And Charter’s ALEC membershipCharter has drawn pressattracted negative scrutiny3 and over 110 companies have publicly left ALEC.
We believe the reputational damage stemming from this misalignment harms long-term value creation by Charter, which has been named to several “America’s Most Hated Companies” lists. for “running a fake consumer group in Maine that’s killing community broadband.”4 Therefore, we“
In the last two years, this proposal received majority support of outside stockholders. We urge Charter to expand its lobbying disclosure.”
1 | https:// |
2 | https:// |
3 | https:// |
4 | https://www.techdirt.com/2022/07/12/charters-running-a-fake-consumer-group-in-maine-thats-killing-community-broadband-with-the-help-of-a-democratic-advisor/. |
Charter Communications | 6674 | 20212023 Proxy Statement
Statement Against Stockholder Proposal Regarding Lobbying Activities
Our Board believes that our Company’s participation in the political, legislative and regulatory processes at all levels of government enhances stockholder value. Our Company is committed to participating constructively in the political process to increase shareholder value and in full compliance with applicable rules and regulations. Our Company makes significant disclosures regarding lobbying and political contributions, and our Board believes that these current disclosures are appropriate and consistent with the objectives of transparency and accountability reflected in the proposal. Indeed, the proponent includes contribution data from our disclosures, demonstrating that significant information concerning our activities is already publicly available.
Our Company has extensive policies and procedures in place to ensure that all lobbying activities and political contributions conducted by the Company and our employees comply with all applicable laws, including robust internal controls and oversight. Our Government Affairs team manages the Company’s lobbying activities and reports directly to the Executive Chairman, with oversight from the full Board of Directors. The Board has delegated authority and responsibility for state and local campaign contributions to the Chief Executive Officer, subject to the provisions of the Company’s Code of Conduct and any other applicable Company policies. The Board receives an annual report on lobbying activities from the Government Affairs team as well as quarterly updates on regulatory activities. Applicable laws and regulations include the prohibition under federal law barring corporations from making direct or indirect contributions to candidates or political parties at the federal level. Similarly, we make political contributions only in states where such contributions are permitted. Contributions are intended to support political issues and candidates consistent with our policy objectives. We disclose our policy objectives on our website at https://policy.charter.com. Charter publicly discloses all U.S. federal lobbying costs and the issues to which our lobbying efforts relate on a quarterly basis. Charter also makes such disclosures at the state or local level consistent with applicable lobbying laws.
Our Board believes that the information currently made available strikes the appropriate balance between transparency and excessive burden and cost, and that additional disclosures with respect to lobbying activities would not provide useful information to stockholders. The implementation of the proposal’s additional requirements would result in the unproductive consumption of valuable time and corporate resources without materially enhancing existing disclosures.
Additional detailed disclosures regarding our participation or contribution to any tax-exempt industry organization or trade associations may further encourage issue activists, some motivated by special or short-term interests, to pressure us to alter our political participation in a manner that could adversely affect stockholder interests, or require us to disclose proprietary information, putting us at a competitive disadvantage. Our Company maintains membership in trade associations and other tax-exempt entities primarily for strategic, rather than advocacy-related purposes. For these reasons, additional disclosures regarding contributions to such organizations and associations would not provide useful information to stockholders.
Our Board also opposes the proposal because many aspects of it are vague or unworkable and may create confusion. The definition of lobbying, and the expenditures that would be considered lobbying-related, vary across jurisdictions and could include employee salaries, office rent and employee travel expenses. As a result, the disclosures regarding lobbying-related expenditures required by the proposal may be inconsistent and confusing, as a particular expenditure may be considered lobbying-related in one jurisdiction but not in another.
In light of our existing policies and disclosures with respect to lobbying activities, our Board believes that producing a report beyond what has been published on our website and required in our public filings would impose a significant burden on the Company, but provide minimal additional information of value to Charter’s stockholders. As a result, our Board believes that adopting the proposal is unnecessary and is not in the best interests of our Company or our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL.
Charter Communications | 67 | 2021 Proxy Statement
Proposal No. 4: Stockholder Proposal Regarding
Chairman of the Board and CEO Roles
(Item 4 on Proxy Card)
This proposal was submitted by the New York State Common Retirement Fund, the beneficial owner of at least $2,000 worth of shares of our Class A common stock. The proposal reads as follows:
“RESOLVED: Shareholders of Charter Communications, Inc. (Charter), urge the Board of Directors (Board) to take the steps necessary to adopt a policy to require that the Chairman of the Board shall be an independent member of the Board. This policy would be phased in for the next CEO transition.
If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair. This policy should be implemented so as not to violate any contractual obligations, with amendments to Charter’s governing documents as needed.
Supporting Statement
Charter’s Board Chairman has served as Chairman and CEO since 2016. Previously, he served as Charter’s President from February 2012 to July 2016, and as a director since February 2012.
A board, led by its chair, is responsible for protecting shareholders’ interests by providing oversight of management in directing the corporation’s affairs. This oversight function can be diminished when the chair is not an independent director, weakening a company’s governance structure. While Charter has appointed a lead independent director, the lead director’s duties are not robust and do not include duties like approval of Board meeting schedules and agendas, or approval of information sent to the Board.
Shareholders have serious concerns regarding the Board’s persistent issues such as:
Several directors serve on an excessive number of boards. When combined with other executive duties, this may preclude certain directors from dedicating the time necessary to fulfill the responsibilities;
The designation of directors via related-party transactions and the subsequent limited voting rights could hinder the interests of outside shareholders;
Over recent years, several directors have received lower-than-usual shareholder support, indicating dissatisfaction with director performance;
Women directors represent only 8% of the board’s directors (1 out of 13);
Shareholders do not have the right to call special meetings and the board has failed to adopt proxy access;
While Charter published its first Corporate Responsibility Report in 2020, it has failed to comprehensively demonstrate that it manages ESG-related risks and performance, including metrics to measure performance;
Concerns with labor management practices, including an unresolved three-year strike with a bargaining unit, can affect the company’s image among its employees, customers, and regulators; and,
Recent public disputes with federal, state, and local regulators may lead to increased regulatory, financial, and reputational risks.
In our view, the chair should be an independent director who has not previously served as an executive of Charter. By separating the roles of chair and CEO, Charter would join a majority of S&P 500 companies that have definitively split the two roles, enhancing oversight and accountability of management to shareholders, and provide independent leadership in addressing governance weaknesses.”
Charter Communications | 68 | 2021 Proxy Statement
Statement Against Stockholder Proposal Regarding Chairman of the Board and CEO Roles
Our Board of Directors values the flexibility of selecting the structure of leadership best suited to meet the needs of the Company and its stockholders. The Board, which consists of directors with diverse experience, backgrounds, perspectives and extensive knowledge about the Company and our industry is best positioned to evaluate its optimal leadership structure. Given the dynamic and competitive environment in which we operate, the Board believes that the right leadership structure may vary as circumstances warrant. The Board recommends a vote against this proposal because it believes it is in the best interests of our stockholders for the Board to have the flexibility to determine the best person to serve as the Chairman of the Board, whether that person is a non-management director or the CEO.
Every year, the Nominating and Corporate Governance Committee reviews and makes a recommendation on the appropriate governance framework for Board leadership. The Committee takes into consideration governance best practices and the facts and circumstances of our Board. Upon the closing of the Transactions in 2016, the Company determined that Board leadership is best provided through the combination of a unified Chairman and CEO, a clearly defined and significant lead independent director role, active and strong committee chairs, and independent-minded, skilled, engaged, diverse and committed directors. The Board believes that its current structure and governance allows it to provide effective challenge and oversight of management.
We have a Lead Independent Director with significant responsibilities that are described in detail in this proxy statement. Mr. Zinterhofer’s skills, experience, commitment and the time he devotes to serve his role all make him well qualified to serve as our Lead Independent Director. The Chairman and CEO is responsible for setting the strategic direction for the Company and the day to day leadership and performance of the Company, while the Lead Independent Director consults with the Chairman and CEO and presides over meetings of the Board when the Chairman and CEO is not present as well as providing leadership for the non-A/N and non-Liberty Broadband directors.
Furthermore, our non-management directors meet regularly in executive sessions that are chaired by our Lead Independent Director with no member of management present. Non-management directors use these executive sessions to discuss various matters regarding the Company and the Board, as well as evaluations of the CEO and senior management, management and Board successions, matters to be included on Board agendas, and additional information the Board would like management to provide to them.
The Board exercises a strong, independent oversight function, which is further enhanced by the fact that our chairs and all members of the Board committees are independent directors. These chairs shape the agenda and information presented to their committees. Oversight of critical issues within these committees is owned by the independent directors. All directors have full access to all members of management and all employees on a confidential basis.
We believe that our current Board structure is in the best interest of our stockholders and that the Board should maintain the flexibility to select the optimal structure of leadership best suited to meet the needs of Charter and its stockholders at any given time, including after our current Chairman and CEO no longer serves as CEO. In addition, given Charter’s robust governance practices, including our strong Lead Independent Director, the Board believes that adoption of an Independent Chair Policy is unnecessarily rigid and not in the best interest of the Company or its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL.
Charter Communications | 69 | 2021 Proxy Statement
Proposal No. 5: Stockholder Proposal Regarding
Diversity and Inclusion Efforts
(Item 5 on Proxy Card)
This proposal was submitted by Handlery Hotels Inc, John B & Linda C Mason Comm Prop (S) and Samajak LP, the beneficial owners of at least $2,000 worth of shares of our Class A common stock. The proposal reads as follows:
“RESOLVED: Shareholders request that Charter Communications, Inc. (“Spectrum”), publish annually a report assessing the Company’s diversity and inclusion efforts, at reasonable expense and excluding proprietary information. At a minimum the report should include:
The process that the Board follows for assessing the effectiveness of its diversity, equity and inclusion programs,
The Board’s assessment of program effectiveness, as reflected in any goals, metrics, and trends related to its promotion, recruitment and retention of protected classes of employees.
Supporting Statement
Investors seek quantitative, comparable data to understand the effectiveness of the company’s diversity, equity, and inclusion programs.
Whereas: Numerous studies have pointed to the corporate benefits of a diverse workforce. These include:
Companies with the strongest racial and ethnic diversity are 35 percent more likely to have financial returns above their industry medians.
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Despite such benefits, significant barriers exist for diverse employees advancing within their careers. Women enter the workforce in almost equal numbers as men (48 percent). However, they only comprise 22 percent of the executive suite. Similarly, people of color comprise 33 percent of entry level positions, but only 13 percent of the c-suite.3
Spectrum states on its website: “To compete in today’s marketplace, we must attract, recruit, select, develop and retain the best talent from among the broadest range of people, backgrounds, and perspectives. Spectrum continues to build an inclusive workplace and a corporate culture that drafts on the strength of our diversity.”4
However, Spectrum has not released meaningful information that allows investors to determine the effectiveness of its human capital management as it relates to workplace diversity. Stakeholders may become concerned that Spectrum’s statements are corporate puffery, language described by the United States Federal Trade Commission as marketing exaggerations intended to “puff up” companies or products and not able to be relied upon by consumers and investors. Investors have reason to be wary, as Spectrum faces allegations of homophobia and ageism as well as sexual and racial discrimination.
Investor desire for information on this issue is significant. As of October, 2020, $1.9 trillion in represented assets released an Investor Statement on the importance of increased corporate transparency on workplace equity data. It stated:
It is essential that investors have access to the most up-to-date and accurate information related to diverse workplace policies, practices, and outcomes.5”
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Charter Communications | 70 | 2021 Proxy Statement
Statement Against Stockholder Proposal Regarding Diversity and Inclusion Efforts
The Company is committed to diversity and inclusion in every aspect of our business. As we strive to deliver high-quality products and services that exceed our customers’ expectations, we embrace the unique perspectives and experiences of our employees, partners and the communities we serve. The Company’s commitment to diversity and inclusion and our efforts to support this commitment are described in our 2019 Corporate Responsibility Report and on our website at corporate.charter.com/diversity-inclusion. Website content regarding diversity & inclusion is updated periodically throughout each year. With this information, we believe that we have substantially addressed the concerns put forward by the proponent, and oppose the proposal to prepare a separate annual report on our diversity & inclusion initiatives and progress.
Our diversity and inclusion efforts are guided by our Executive Steering Committee for Diversity and Inclusion, External Diversity & Inclusion Council (EDIC) and Diversity & Inclusion team, with strong support from the executive leadership of the Company. Our Chairman and CEO leads our Executive Steering Committee, comprising all of the Company’s most senior leaders. The group regularly reviews progress against our diversity and inclusion strategy to ensure that both diversity and inclusion remain integral across our business. Our EDIC comprises national civic and business leaders who help us understand the critical needs of the diverse communities we serve and how to implement our programs in the most impactful way. Led by Charter’s Chief Diversity Officer, the Diversity & Inclusion team works across the organization to incorporate diversity and inclusion into everything that we do. Our Chairman and CEO also regularly meets with our EDIC.
We are proud of our workforce that reflects the full range of diversity and abilities in the markets we serve, and are actively working to promote diversity at every level of our organization. We foster an inclusive environment where employees feel respected, engaged, and able to reach their full potential. This also helps us meet the unique needs of our customers. We are striving to enhance diversity at every level of our organization, including among our senior leaders. Ultimately, our vision is to leverage the full diversity of our employees and partners as we continue to make a meaningful difference for our customers, company, and communities.
We partner with a number of industry organizations to recruit and develop diverse talent. For example, the Company sponsors employee memberships in Women in Cable Telecommunications (WICT) and National Association for Multi-Ethnicity in Communications (NAMIC) — both provide a range of skill-building and networking opportunities that facilitate career advancement. We also invest in the Emma Bowen Foundation, which facilitates internships for talented students of color at leading media companies like ours, as well as T. Howard Foundation, whose mission is to increase diversity in the media industry. In 2020, the Company also launched a new initiative, Spectrum Scholars, a two-year educational and mentorship program for underrepresented students with financial need. Each student will receive a $20,000 scholarship, a Charter professional mentor and the opportunity to explore an internship with the company.
This commitment to diversity means building and maintaining an inclusive environment where everyone feels valued. Our employees represent a wide range of perspectives and experience, and success on our commitment is measured by how well we integrate each individual’s unique self-understanding into our business, workforce, and relationships with our clients and employees. In 2019, we launched five Business Resource Groups (BRGs) focused on disability, LGBTQ, multicultural, veterans and women. These voluntary groups connect employees with shared characteristics, life experiences, and interests, and enable them to engage in activities that advance our culture of inclusion and contribute to business success. BRGs empower our team members to grow and succeed by providing networking, mentorship and skill-building opportunities. We also launched Charter Inclusion Talks, an internal speaker series built around cultural heritage and identity dates. The Talks, which are held across our footprint, raise awareness of the many identities and heritages that contribute to the Company’s success.
The Company is also in the process of developing a report describing material environmental, social and governance (“ESG”) risks and opportunities. As part of this process, the Company’s Chairman and CEO has committed the Company to adopt performance targets related to ESG matters. Charter’s ESG report will be built around Charter’s ESG framework, which will be described in the report and which includes our focus on our highly-skilled workforce. Within that element of our ESG framework, enabling a diverse and inclusive culture will be reported upon as a key element. The Company expects to issue the report before the date of the 2021 annual meeting.
These efforts evidence that the Company’s commitment to diversity and inclusion is vital to our continued success, our unique culture and our purpose of serving every client with passion and integrity. In light of our existing policies and disclosures with respect to diversity and inclusion, our Board does not believe that preparing a separate report describing the Board’s process for assessing the effectiveness of our diversity and inclusion efforts as well as the Board’s assessment of those efforts is warranted.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL.
Charter Communications | 71 | 2021 Proxy Statement
Proposal No. 6: Stockholder Proposal Regarding
Disclosure of Greenhouse Gas Emissions
(Item 6 on Proxy Card)
This proposal was submitted by The Children’s Investment Master Fund, the beneficial owner of at least $2,000 worth of shares of our Class A common stock. The proposal reads as follows:
Proposal
RESOLVED, that shareholders of Charter Communications, Inc. (“Charter” or the “Company”) request that the Board of Directors of Charter disclose at each annual meeting of shareholders, beginning with the next annual meeting of shareholders, a report disclosing the Company’s greenhouse gas emission levels (the “Emissions”) in a manner consistent with the Task Force on Climate-related Financial Disclosure recommendations as well as any strategy that the Company may have adopted or will adopt to reduce the Emissions in the future, including any Emissions’ progress made year over year (the “Reduction Plan”), and provide shareholders with the opportunity, at each such annual meeting, to express non-binding advisory approval or disapproval of the Reduction Plan.”
Supporting Statement
As governments take steps to limit greenhouse gas emissions and mandate reporting in line with the Task Force on Climate-related Financial Disclosure; disclosing reduction targets, detailing strategies for embedding climate change throughout their business models and services and providing progress therein to shareholders, is an important means of assuring shareholders that management is taking seriously the physical and transition risks associated with climate change.
Charter Communications | 72 | 2021 Proxy Statement
Statement Against Stockholder Proposal Regarding Disclosure of Greenhouse Gas Emissions
The Company strives to operate its business in an efficient manner and reduce its greenhouse gas emissions. The Company takes seriously its role in helping maintain a healthy environment throughout its footprint. We are committed to environmental sustainability, and we strive to reduce our impact on the environment by reducing carbon emissions in our business over time. We do not believe that adoption of the proponent’s proposal is an effective use of time and resources regarding reducing greenhouse gas emissions.
The Company’s efforts to support environmental sustainability include the following:
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The Company and the Board understand both the importance of operating in an environmentally responsible manner, and its positive impact on the Company’s operations, employees and the communities we serve. The Board does not believe that adopting this proposal, including holding an annual stockholder vote regarding the Company’s greenhouse gas emissions, is an effective use of time and resources. The Board believes that the interests of stockholders are better served through the ESG reporting the Company has undertaken and the Company’s current environmental initiatives and approach, with objectives tailored for the Company’s multiple businesses and locations and the Company’s ESG report, which we expect will be published before the stockholder meeting and include a greenhouse gas emissions target. As a result, our Board believes that adopting the proposal is unnecessary and is not in the best interests of our Company or our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL.
Charter Communications | 73 | 2021 Proxy Statement
Proposal No. 7: Stockholder Proposal Regarding
EEO-1 Reports
(Item 7 on Proxy Card)
This proposal was submitted by Calvert Research and Management, the beneficial owner of at least $2,000 worth of shares of our Class A common stock. The proposal reads as follows:
Proposal
WHEREAS:
Charter Communications is required to furnish an EEO-1 report – a comprehensive breakdown of its workforce by race and gender across 10 employment categories – to the United States Equal Employment Opportunity Council annually.
As intangible assets increasingly drive corporate value creation, investors seek a better understanding of human capital management strategy and performance. A lack of consistent disclosure of human capital practices makes it difficult for investors to evaluate corporate performance.
Detailed workforce diversity data is one critical component of transparency regarding human capital management. Diverse and inclusive teams are associated with greater employee engagement, increased attraction and retention of talent, and a sense of purpose in the workforce.
Disclosure of the EEO-1 report would enable the company to provide a more complete picture of its workforce without additional burdens on the company to collect data. Such disclosure would provide a platform for the company to describe the connection between human capital management and corporate strategy and facilitate informed engagement with investors.
Information about the effectiveness of a company’s diversity investments must be complete, comparable and consistent. Investors need annual disclosure of granular demographic data to know whether investments in diversity have paid off through changes in the numbers of people by race and gender at different levels of the company.
Annual EEO-1 disclosure enables an evaluation of company strengths and opportunities for improvement and performance trends, and facilitates comparison across firms.
Yet, Charter Communications does not provide this fundamental information to shareholders. Charter Communications describes a commitment to diversity and notes internal initiatives. However, the company does not disclose any demographic diversity data and such information is necessary to understand the company’s progress.
RESOLVED: Shareholders request that the Board of Directors adopt a policy requiring Charter Communications to disclose on its website the annual Consolidated EEO-1 Report. The company shall disclose its EEO-1 Report no later than 60 days after the date of its submission to the EEOC.
Supporting Statement
The global coronavirus pandemic and police brutality against African-Americans have heightened public concern about racial equity. Rising expectations of employees and other stakeholders that companies will make a meaningful commitment to racial equity in the workplace have strengthened the longstanding case for prioritizing diversity in the workplace. In particular, companies that signal their commitment to racial diversity through workforce transparency may be better positioned to attract and retain talent.
Underscoring the link between diversity and inclusion and human capital management, research from The Conference Board’s DNA of Engagement initiative argues synergy between employee engagement and inclusion is a key component of overall employee productivity and Deloitte highlights diversity as an important element in building and sustaining a strong sense of corporate purpose.12
A May 2020 report from McKinsey Diversity Wins: How Inclusion Matters found “that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile.”
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Charter Communications | 74 | 2021 Proxy Statement
Statement Against Stockholder Proposal Regarding EEO-1 Reports
The Company is committed to diversity and inclusion in every aspect of our business. Given our focus on diversity and inclusion, the adoption of the proposal to disclose our EEO-1 reports would not provide meaningful additional information of value to our stockholders, and so we oppose the proposal.
As we strive to deliver high-quality products and services that exceed our customers’ expectations, we embrace the unique perspectives and experiences of our employees and partners and the communities we serve. The Company’s commitment to diversity and inclusion and our efforts to support this commitment are described in our 2019 Corporate Responsibility Report and on our website at corporate.charter.com/diversity-inclusion. With this information, we believe that we have substantially addressed the concerns put forward by the proponent.
Our diversity and inclusion efforts are guided by our Executive Steering Committee for Diversity and Inclusion, External Diversity & Inclusion Council (EDIC) and Diversity & Inclusion team, with strong support from the executive leadership of the Company. Our Chairman and CEO leads our Executive Steering Committee, comprising all of the Company’s most senior leaders. The group regularly reviews progress against our diversity and inclusion strategy to ensure that both diversity and inclusion remain integral across our business. Our EDIC comprises national civic and business leaders who help us understand the critical needs of the diverse communities we serve and how to implement our programs in the most impactful way. Led by Charter’s Chief Diversity Officer, the Diversity & Inclusion team works across the organization to incorporate diversity and inclusion into everything that we do. Our Chairman and CEO also regularly meets with our EDIC.
We are proud of our workforce that reflects the full range of diversity and abilities in the markets we serve, and are actively working to promote diversity at every level of our organization. We foster an inclusive environment where employees feel respected, engaged, and able to reach their full potential. This also helps us meet the unique needs of our customers. We are striving to enhance diversity at every level of our organization, including among our senior leaders. Ultimately, our vision is to leverage the full diversity of our employees and partners as we continue to make a meaningful difference for our customers, company, and communities.
We partner with a number of industry organizations to recruit and develop diverse talent. For example, the Company sponsors employee memberships in Women in Cable Telecommunications (WICT) and National Association for Multi-Ethnicity in Communications (NAMIC) — both provide a range of skill-building and networking opportunities that facilitate career advancement. We also invest in the Emma Bowen Foundation, which facilitates internships for talented students of color at leading media companies like ours, as well as T. Howard Foundation, whose mission is to increase diversity in the media industry. In 2020, the Company also launched a new initiative, Spectrum Scholars, a two-year educational and mentorship program for underrepresented students with financial need. Each student will receive a $20,000 scholarship, a Charter professional mentor and the opportunity to explore an internship with the company.
This commitment to diversity means building and maintaining an inclusive environment where everyone feels valued. Our employees represent a wide range of perspectives and experience, and success on our commitment is measured by how well we integrate each individual’s unique self-understanding into our business, workforce, and relationships with our clients and employees. In 2019, we launched five Business Resource Groups (BRGs) focused on disability, LGBTQ, multicultural, veterans and women. These voluntary groups connect employees with shared characteristics, life experiences, and interests, and enable them to engage in activities that advance our culture of inclusion and contribute to business success. BRGs empower our team members to grow and succeed by providing networking, mentorship and skill-building opportunities. We also launched Charter Inclusion Talks, an internal speaker series built around cultural heritage and identity dates. The Talks, which are held across our footprint, raise awareness of the many identities and heritages that contribute to the Company’s success.
EEO-1 data is limited by a government form that categorizes our U.S. workforce into certain generic and EEOC-mandated job categories that fail to account for company or industry-specific roles. It is a backward-looking snapshot of limited categories, has little bearing on our business or the customers that we serve, and is not an accurate measure of progress toward our goal of developing an inclusive environment. The data is captured confidentially and voluntarily, based on each individual’s interpretation of the form’s limited categories. It omits many elements of diversity that are valuable to us and our workplace, including disability, age, sexual orientation, and military status, among others. As a result, the EEO-1 data is not reflective of the Company’s diversity and could be misconstrued in ways that could encumber our efforts to achieve greater diversity and inclusion.
Charter Communications | 75 | 20212023 Proxy Statement
The Company is also in the process of developing a report describing material environmental, social and governance (“ESG”) risks and opportunities. As part of this process, the Company’s Chairman and CEO has committed the Company to adopt performance targets related to ESG matters. Charter’s ESG report will be built around Charter’s ESG framework, which will be described in the report and which includes our focus on our highly-skilled workforce. Within that element of our ESG framework, enabling a diverse and inclusive culture will be reported upon as a key element. The Company expects to issue the report before the date of the 2021 annual meeting.
These efforts evidence that the Company’s commitment to diversity and inclusion is vital to our continued success, our unique culture and our purpose of serving every client with passion and integrity. In light of our existing policies and disclosures with respect to diversity and inclusion, our Board does not believe that disclosing our EEO-1 reports would not provide meaningful additional information of value to our stockholders. As a result, our Board believes that adopting the proposal is unnecessary and is not in the best interests of our Company or our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL.
Charter Communications | 76 | 2021 Proxy Statement
Charter’s CEO to Median Employee pay ratio for 20202022 was calculated pursuant to Item 402(u) of Regulation S-K, comparing total annual compensation for the CEO to that of the Median Employee. In 2020,2022, Charter identified a new Median Employee was identified for purposes of calculating our CEO Pay Ratio, as the prior analysis from which the Median Employee had been selected was conducted in 2017, and the regulations require that a Median Employee be identified once every three years. The Median Employee for 2020 was identified using the same methodology as in prior years and based on an analysis of the median 2020 2022 W-2 Box 1 income among the 96,100101,700 full and part-time U.S. employees, other than the CEO, who were actively employed by Charter as of December 31, 20202022 (Charter has no employees outside of the U.S.). No adjustments were applied to W-2 Box 1 income for purposes of determining the Median Employee, such as for employees who were employed for only part of the year or on unpaid leave of absence at some point during the year. Our
With respect to the CEO Total Annual Compensation used in calculating the CEO Pay Ratio, the role of CEO transitioned from Mr. Rutledge to Mr. Winfrey effective December 1, 2022, with Mr. Winfrey therefore serving as CEO as of December 31, 2022 when Charter determined the Median Employee. As permitted by Item 402(u), the CEO Pay Ratio was therefore calculated using Mr. Winfrey’s total compensation corresponding to his service as CEO, with such compensation annualized as if it had been in effect for the full year. The table below provides further detail regarding how the various pay elements disclosed in the Summary Compensation Table for Mr. Winfrey were annualized.
Summary Compensation Table Value | Value Annualized for Time Period as CEO | Notes on Annualized Values | ||||||||
Base Salary | $1,359,038 | $1,700,000 | Full annual base salary provided as CEO | |||||||
Option Awards | $12,001,909 | $17,000,000 | Annual equity opportunity as CEO (first applied in 2023) | |||||||
Non-Equity Incentive Plan Compensation | $2,035,221 | $3,282,700 | Actual 2022 bonus paid as if target bonus opportunity as CEO had been in effect for the full year (target bonus of $4,250,000) | |||||||
All Other Compensation | $230,799 | $230,799 | Assumes no changes to such compensation in connection with transition to CEO role; refer to the Summary Compensation Table for additional details on All Other Compensation | |||||||
Total | $15,626,967 | $22,213,499 | The resulting annualized value for Mr. Winfrey is considered CEO Total Annual Compensation for purposes of calculating the CEO Pay Ratio |
Charter’s CEO Pay Ratio is a reasonable estimate calculated in a manner consistent with Item 402(u). OurHowever, due to the flexibility afforded by Item 402(u) in calculating the CEO Pay Ratio, Charter’s CEO Pay Ratio may not be comparable to the CEO pay ratios presented by other companies.
For 2020,2022, the Median Employee had total annual compensation of $56,568,$55,429, calculated using the same methodology as applied for the CEONEOs in the Summary Compensation Table. Full-time Charter employees in the U.S., including the Median Employee, are also eligible to participate in Company-sponsored retirement and health and welfare benefits programs and receive complimentary cable services, which provide significant additional value but are not included in the measure of total annual compensation used to calculate the pay ratio.
The ratio of the CEO’s total annual compensation to that of the Median Employee was as follows:
CEO Total Annual Compensation | $ | 38,846,705 | $ | 22,213,499 | ||||
Median Employee Total Annual Compensation | $ | 56,568 | $ | 55,429 | ||||
Ratio of CEO to Median Employee Total Annual Compensation | 686.7 | 400.8 |
Charter Communications | 76 | 2023 Proxy Statement
Code of Ethics
We have adopted a Financial Code of Ethics within the meaning of federal securities regulations for our employees, including all executive officers and directors. We also established a hotline and website for reporting alleged violations of the Financial Code of Ethics, established procedures for processing complaints and implemented educational programs to inform our employees regarding the Financial Code of Ethics. A copy of our Financial Code of Ethics is available on the “Investor Relations” section of our website at ir.charter.com.ir.charter.com.
Delinquent Section 16(a) Reports
To the Company’s knowledge, with respect to the fiscal year ended December 31, 2022, all applicable filings were timely made, except that A/N and Michael Newhouse each filed a Form 4 one business day late with respect to a monthly share repurchase transaction. The lateness was due to an administrative error.
Charter Communications | 77 | 2021 Proxy Statement
Stockholder Proposals for 20222024 Annual Meeting
To be included in the proxy statement for the 20222024 annual meeting, a stockholder proposal must be delivered to the Corporate Secretary at the Company’s executive offices no later than November 18, 2021.16, 2023. The federal proxy rules specify what constitutes timely submission and whether a stockholder proposal is eligible to be included in the proxy statement.
If a stockholder desires to bring business before the meeting that is not the subject of a proposal timely and properly submitted for inclusion in the proxy statement or to make a nomination of a person for election to the boardBoard of directors,Directors, the stockholder must follow procedures outlined in the Company’s Bylaws. One of the procedural requirements in the Bylaws is timely notice in writing of the business the stockholder proposes to bring before the meeting. To be timely with respect to the 20222024 annual meeting, such a notice must be delivered to the Company’s Corporate Secretary at the Company’s executive offices no earlier than January 1, 2022December 27, 2023 and no later than January 26, 2022.2024. However, in the event that the Company elects to hold its next annual meeting more than 30 days before or more than 70 days after the anniversary of this annual meeting, such stockholder proposals would have to be received by the Company not earlier than 120 days prior to the next annual meeting date and not later than the later of (i) 90 days prior to the next annual meeting date.date or (ii) the tenth day following the day on which public announcement of the date of such meeting is first made by the Company.
Such notice must include:include the information required by the Company’s Bylaws, including: (1) for a nomination for director, all information relating to such person that is outlined in the Company’s Bylaws, including all information required to be disclosed in a proxy for election of directors; (2) as to any other business, a description of the proposed business, the text of the proposal, the reasons therefore, and any material interest the stockholder may have in that business; and (3) certain information regarding the stockholder making the proposal. These requirements are separate from the requirements a stockholder must meet to have a proposal included in the Company’s proxy statement. In addition, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also comply with the additional requirements of Rule 14a-19(b).The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.
Any stockholder desiring a copy of the Company’s Bylaws will be furnished one without charge upon written request to the Corporate Secretary. A copy of the amended and restated Bylaws was filed as an exhibit to the Company’s CurrentQuarterly Report on Form 8-K filed on May 19, 2016, together with the amendment filed as an exhibit to the Company’s Current Report on Form 8-K10-Q filed on July 30, 2018,29, 2022 and is available at the SEC Internet site (http:(http://www.sec.gov)www.sec.gov).
At the date of mailing of this proxy statement, we are not aware of any business to be presented at the annual meeting other than the matters discussed above. If other proposals are properly brought before the meeting, any proxies returned to us will be voted as the proxyholder sees fit.
Charter Communications | 77 | 2023 Proxy Statement
Our Annual Report on Form 10-K for the year ended December 31, 20202022 is available without charge by accessing the “Investor Relations” section of our website at ir.charter.com.ir.charter.com. You also may obtain a copy of the Form 10-K, without exhibits, at no charge by writing to the Company at 400 Atlantic Street,Washington Blvd., Stamford, CT 06901,06902, Attention: Investor Relations.
In addition, certain financial and other related information, which is required to be furnished to our stockholders, is provided to stockholders concurrently with this Proxy Statement in our 20202022 Annual Report. The SEC has enacted a rule that allows the Company to deliver only one copy of our Proxy Statement and 20202022 Annual Report to multiple security holders sharing an address if they so consent. This is known as “householding.” The Householding Election,householding election, which appears on your proxy card, provides you with a means for you to notify us whether you consent to participate in householding. By marking “Yes” in the block provided, you will consent to participate in householding and by marking “no” you will withhold your consent to participate. If you do nothing, you will be deemed to have given your consent to participate in householding. Your consent to householding will be perpetual unless you withhold or revoke it. You may revoke your consent at any time by contacting Broadridge Financial Solutions (“Broadridge”), either by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or by calling (800) 542-1061. We will remove you from the householding program, following which you will promptly receive an individual copy of our Annual Report and this Proxy Statement. Even if your household receives only one Annual Report and one Proxy Statement, a separate proxy card will be provided for each stockholder. If you vote using the proxy card, please sign and return it in the enclosed postage-paid envelope. If you vote by Internet or telephone, there is no need to mail the proxy card.
All trademarks used in this report remain the property of their respective owners.
Charter Communications | 78 | 20212023 Proxy Statement
Appendix A: Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company’s businesses as well as other non-cash or special items, and is unaffected by the Company’s capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing. These costs are evaluated through other financial measures. Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures. Management and Charter’s Board of Directors use Adjusted EBITDA and free cash flow to assess Charter’s performance and its ability to service its debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under the Company’s credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the SEC). For the purpose of calculating compliance with leverage covenants, the Company uses Adjusted EBITDA, as presented, excluding certain expenses paid by its operating subsidiaries to other Charter entities. The Company’s debt covenants refer to these expenses as management fees, which were $1.4 billion and $1.3 billion for the years ended December 31, 2022 and 2021, respectively. A reconciliation of Adjusted EBITDA and free cash flow to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, is as follows (dollars in millions):
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The above schedule is presented in order to reconcile Adjusted EBITDA and free cash flow, non-GAAP measures, to the most directly comparable GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley Act. Charter Communications | 79 | 2023 Proxy Statement
CHARTER COMMUNICATIONS, INC. 400 WASHINGTON BLVD. STAMFORD, CT 06902
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 24, 2023 for shares held directly and by 11:59 p.m. Eastern Time on April 21, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on April 24, 2023 for shares held directly and by 11:59 p.m. Eastern Time on April 21, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V00503-P87861-Z84450 KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
CHARTER COMMUNICATIONS, INC. |
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The Board of Directors recommends you vote FOR the | ||||||||||||||||||||||||||||||
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1a. | W. Lance Conn | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1b. | Kim C. Goodman | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1c. | Craig A. Jacobson | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1d. | Gregory B. Maffei | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1e. | John D. Markley, Jr. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1f. | David C. Merritt | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1g. | James E. Meyer | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1h. | Steven A. Miron | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1i. | Balan Nair | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1j. | Michael A. Newhouse | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1k. | Mauricio Ramos | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1l. | Thomas M. Rutledge | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1m. | Eric L. Zinterhofer | ☐ | ☐ | ☐ |
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The Board of Directors recommends you vote 3 Years on the following proposal: | 3 Years | 2 Years | 1 Year | Abstain | ||||||||||||||||||||||||||||
3. An advisory vote on the frequency of holding an advisory vote on executive compensation.
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The Board of Directors recommends you vote FOR proposal 4: | ||||||||||||||||||||||||||||||||
4. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, | ||||||||||||||||||||||||||||||||
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The Board of Directors recommends you vote AGAINST proposal 5: |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) | Date |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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D38635-P50449-Z79225V00504-P87861-Z84450
CHARTER COMMUNICATIONS, INC.
Annual Meeting of Stockholders
April 27, 2021 10:25, 2023 8:30 AM EasternMountain Daylight Time
This proxy is solicited by the Board of Directors
The stockholders hereby appoint Thomas M. Rutledge,Christopher L. Winfrey, Richard R. Dykhouse and Thomas E. Proost or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Class A common stock of Charter Communications, Inc. that the stockholders are entitled to vote at the Annual Meeting of Stockholders to be held at 10:8:30 AM, EasternMountain Daylight Time on April 27, 2021, via virtual meeting25, 2023, at www.virtualshareholdermeeting.com/CHTR2021,6350 S. Fiddler’s Green Circle, 2nd Floor (Conference Room C), Greenwood Village, CO 80111, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side
CHARTER COMMUNICATIONS, INC.
400 WASHINGTON BLVD.
STAMFORD, CT 06902
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 24, 2023 for shares held directly and by 11:59 p.m. Eastern Time on April 21, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on April 24, 2023 for shares held directly and by 11:59 p.m. Eastern Time on April 21, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
CHARTER COMMUNICATIONS, INC. |
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The Board of Directors recommends you vote FOR the | ||||||||||||||||||||||||||||||
1. | Election of Directors | |||||||||||||||||||||||||||||
Nominees: | For | Against | Abstain | |||||||||||||||||||||||||||
1a. | W. Lance Conn | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1b. | Kim C. Goodman | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1c. | Craig A. Jacobson | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1d. | Gregory B. Maffei | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1e. | John D. Markley, Jr. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1f. | David C. Merritt | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1g. | James E. Meyer | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1h. | Steven A. Miron | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1i. | Balan Nair | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1j. | Michael A. Newhouse | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1k. | Mauricio Ramos | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1l. | Thomas M. Rutledge | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||
1m. | Eric L. Zinterhofer | ☐ | ☐ | ☐ |
| For | Against | Abstain | ||||||||||||||||||||||||||||||||
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The Board of Directors recommends you vote 3 Years on the following proposal: | 3 Years | 2 Years | 1 Year | Abstain | |||||||||||||||||||||||||||||||
3. An advisory vote on the frequency of holding an advisory vote on executive compensation. |
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The Board of Directors recommends you vote FOR proposal 4: | |||||||||||||||||||||||||||||||||||
4. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2023. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||
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The Board of Directors recommends you vote AGAINST | |||||||||||||||||||||||||||||||||||
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| NOTE: Such other business as may properly come before the meeting or any adjournment thereof in accordance with Charter’s bylaws. |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) | Date |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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D38637-P50449-Z79225V00506-P87861-Z84450
CHARTER COMMUNICATIONS, INC.
Annual Meeting of Stockholders
April 27, 2021 10:25, 2023 8:30 AM EasternMountain Daylight Time
This proxy is solicited by the Board of Directors
The stockholders hereby appoint Thomas M. Rutledge,Christopher L. Winfrey, Richard R. Dykhouse and Thomas E. Proost or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Class B common stock of Charter Communications, Inc. that the stockholders are entitled to vote at the Annual Meeting of Stockholders to be held at 10:8:30 AM, EasternMountain Daylight Time on April 27, 2021, via virtual meeting25, 2023, at www.virtualshareholdermeeting.com/CHTR2021,6350 S. Fiddler’s Green Circle, 2nd Floor (Conference Room C), Greenwood Village, CO 80111, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side