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| ☐ | Soliciting Material | |
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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
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, 202123, 2024 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.
Lastly, Craig Jacobson has decided not to stand for re-election to the Board of Directors at the annual meeting. We thank Craig for his commitment to Charter and the many valuable contributions he has made during his tenure on the Board of Directors.
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
Chairman and Chief Executive Officer
March 18, 2021
| Eric L. Zinterhofer | Christopher L. Winfrey | |
Non-Executive Chairman of the Board | President and Chief Executive Officer, Director |
March 14, 2024
PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
| Charter Communications, Inc. 400 Stamford, CT |
Notice of Annual Meeting of Stockholders
of Charter Communications, Inc.
| Date: | Time: | Place: | ||||||||||||
| April | 8:30 a.m. (Mountain Daylight Time) | 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. An amendment increasing the number of shares in the Company’s 2019 Stock Incentive Plan; 3. An amendment to the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation; 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,
Corporate Secretary
March |
| Questions and Answers about Voting and the Annual Meeting | 1 | ||||||
| Proposal No. 1: Election of Directors | |||||||
| 15 | ||||||
| 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 | |||||||
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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
Charter Communications, Inc.
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to Be Held on April 27, 2021.23, 2024. The 20212024 notice and proxy statement and the 20202023 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, 2021.14, 2024.
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 increase the number of shares in the Company’s 2019 Stock Incentive Plan; |
Proposal 3: To vote on a stockholder proposal regarding lobbying activities;
| • | Proposal 3: To amend the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation; |
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, 2024; |
Proposal 5: To vote on a stockholder proposal regarding diversity and inclusion efforts;
| • | Proposal 5: To vote on a stockholder proposal regarding lobbying activities; |
Proposal 6: To vote on a stockholder proposal regarding disclosure of greenhouse gas emissions;
| • | Proposal 6: To vote on a stockholder proposal regarding political expenditures report; and |
| • | To vote on any other matters properly brought before the stockholders at the meeting. |
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 of the amendment increasing the number of shares in the Company’s 2019 Stock Incentive Plan; |
| • | FOR the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation; |
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, 2024; and |
| • | AGAINST each of the stockholder proposals. |
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, alltwelve of whom are currently serving on our boardBoard of directors.Directors and one new director-nominee, Carolyn J. Slaski. The thirteen directors who have been nominated by the boardBoard of directorsDirectors and agreed to serve as directors are Ms.Mses. Goodman and Slaski and Messrs. Conn, Jacobson, Maffei, Markley, Merritt, Meyer, Miron, Newhouse, Nair, Ramos, RutledgeWinfrey 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 | 20212024 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, 202123, 2024 (the “Record Date”), a total of 215,273,098161,279,328 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 144,386,152 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.16,893,176 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’s proposal as described aboveproposals 2 through 4 and “AGAINST” each of the stockholder proposals.
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”).applicable regulatory requirements. 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 orthrough 3 through 7.and 5 and 6. 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”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 | 2024 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.
With respect to each of the proposals 1, 2 and 4 through 6, 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 proposals 1, 2 and 4 through 6. With respect to proposal 3, broker non-votes and abstentions will have the applicable proposal.same effect as a vote “against” in determining whether the affirmative vote constitutes a majority of the outstanding shares of Class A common stock entitled to vote at the annual meeting.
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, 2 and 4 through 7.6. 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.
The affirmative vote of the holders of a majority of the outstanding shares of Class A common stock entitled to vote thereon is required for approval of proposal 3. Accordingly, assuming a quorum is present, abstentions, broker non-votes and a stockholder’s other failure to vote will have the same effect as a vote “against” on the outcome of proposal 3.
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 76 you can vote “FOR” a proposal voteor “AGAINST” a proposal, 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 and the Companyon proposal as noted above1, “FOR” proposals 2 through 4, and “AGAINST” each of the stockholder proposals 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, 2021.22, 2024. 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.
Charter Communications | 3 | 2024 Proxy Statement
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 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 20212024 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, 20th 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 Commission (“SEC”) 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 | 20212024 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 thirteentwelve members standing as nominees for election.election as well as one new director-nominee, Carolyn J. Slaski. 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, and that twelve of our thirteen director nominees are 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.
Mr. Rutledge retired from the role of Executive Chairman of the Company and the Board of Directors (“Executive Chairman”) effective November 30, 2023, but continues to serve as a director emeritus. Mr. Winfrey was appointed to the Board of Directors effective November 30, 2023 to fill the vacancy resulting from Mr. Rutledge’s retirement. The Board also appointed Eric L. Zinterhofer as Non-Executive Chairman of the Board effective November 30, 2023 upon the retirement of Mr. Rutledge as Executive Chairman. Craig Jacobson will not stand for reelection to the Board and his term of office will expire as of the end of the annual meeting. To fill the vacancy caused by Mr. Jacobson’s departure, Carolyn J. Slaski has been nominated by the Board of Directors, based on the recommendation of the Nominating and Corporate Governance Committee, for election to the Board of Directors at the upcoming annual meeting. Ms. Slaski was identified by a third party recruiting firm that the Nominating and Corporate Governance Committee engaged to assist in developing its pipeline of potential diverse director candidates.
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 and the director nominees named in this proxy statement, 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.director except new director-nominee Carolyn J. Slaski.
Directors | Position(s) | |
| Non-ExecutiveChairman | |
| ||
W. Lance Conn | Director | |
Kim C. Goodman | Director | |
| Director | |
| Director | |
| Director | |
| Director | |
| Director | |
| Director | |
| Director | |
| Director | |
| Director | |
Christopher L. Winfrey | Director |
Charter Communications | 65 | 20212024 Proxy Statement
|
|
|
Eric L. Zinterhofer
Committees: Compensation and Benefits, Nominating and Corporate Governance,
|
Biographical Information:
Mr. Zinterhofer |
Skills and Qualifications:
Mr. Zinterhofer’s qualifications to sit on Charter’s
|
Charter Communications | 7 | 2021 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
|
Charter Communications | 6 | 2024 Proxy Statement
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 | 8 | 2021 Proxy Statement
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 Atlanta Braves Holdings, Inc. since July 2023 and as President and Chief Executive Officer since December 2022. 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 | 97 | 20212024 Proxy Statement
John D. Markley, Jr. Independent Director Age: Committees: Nominating and Corporate 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 | 108 | 20212024 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
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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
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Charter Communications | 119 | 20212024 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 award-winning journalism, content and entertainment 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 | 1210 | 20212024 Proxy Statement
Mauricio Ramos Independent Director Age: Committees: Compensation and Benefits
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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. He was appointed Interim Chairman in September 2023. 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 |
Carolyn J. Slaski Independent Director-Nominee Age: 61 Director Since: N/A Committees: None |
Biographical Information: Ms. Slaski served as the Americas and US Vice-Chair of Talent of EY LLP from 2015 to 2021. Previously, Ms. Slaski was a Senior Audit Partner from 1984-2021 and, during that time, also served as the East Region Assurance Managing Partner from 2013 to 2015, New Jersey Office Managing Partner and Market Segment Leader from 2010-2013 and European Client Service Partner and Capital Markets Leader from 2002 to 2005. Ms. Slaski serves on the board of TELUS International where she sits on the Audit and HR committees. Ms Slaski holds a Bachelor of Arts in Economics (Honors) from Rutgers University, a Certified Public Accountant certification and has completed EY’s Strategic Leadership Program by Harvard University. |
Skills and Qualifications: Ms. Slaski’s qualifications to sit on Charter’s Board include her many years of experience as an audit and lead partner with a major accounting firm. As an experienced director and audit committee member with extensive accounting, financial reporting and audit committee experience, Ms. Slaski will bring a strong background in strategic leadership, risk management, information technology and information management to our Board. |
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Christopher L. Winfrey Director Age: 48 Director Since: 2023 Committees: None |
Mr. Winfrey was named President and Chief Executive Officer of Charter Communications in December 2022 and appointed to the Board of Directors in November 2023. 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 more than 25 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 Boards of the NCTA, CableLabs and National Urban League. He received a B.S. in accounting and an MBA from the University of Florida. |
Skills and Qualifications: Mr. Winfrey’s qualifications to sit on Charter’s Board include his many years of experience as an executive in the telecommunications industry, including as our President and Chief Executive Officer since December 2022. Mr. Winfrey is responsible for setting and executing the goals and strategies related to our business and provides the Board not only with a knowledge of our day-to-day operations, but also with the essential experience, insight and expertise that can be provided only by a person who is intimately involved in running our business.
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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 2020,2023, which all of thetwelve directors attended. Members of the boardBoard of directorsDirectors are encouraged to attend the annual meeting each year. In 2020,2023, the full boardBoard of directorsDirectors held thirteenfourteen meetings and acted two 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 2020.2023.
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 Corporate Governance and Finance Committees each have a charter that is available on the “Investor Relations”“Investors” 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 2020,2023, 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 20202023 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 fourfive times and acted two times by unanimous written consent in 2020.2023.
The Compensation and Benefits Committee reviews and approves the compensation of the senior management of the Company. During 2020,2023, 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 2020.2023. All members of the
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Compensation and Benefits Committee were determined by the boardBoard of directorsDirectors in 20202023 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 twothree times by unanimous written consent during 2020.in 2023.
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.matters, reviewing public policy priorities and political engagement strategy and overseeing lobbying activities. 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 2020,2023, 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 20202023 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.2023.
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 2020,2023, Messrs. Conn, Maffei, Merritt, Newhouse and Zinterhofer served on the Finance Committee. The Finance Committee met onceone time and acted eightfour times by unanimous written consent during 2020.in 2023.
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 2023 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, and a majority of the thirteen director nominees 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 have also determined that director-nominee Ms. Slaski is independent under NASDAQ rules. The Nominating and Corporate Governance Committee and the Board of Directors 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. RutledgeWinfrey is the ChairmanPresident and CEOChief Executive Officer 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.
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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 and the new director nominee 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 and the new director nominee 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 American, as well as a female candidate nominated for election at the 2024 annual stockholders’ meeting. In 2023, the Nominating and Corporate Governance Committee engaged a third party recruiting firm to further develop its newly formedpipeline of potential female director candidates, which resulted in the nomination of Ms. Slaski for election to the Board at the 2024 annual stockholders’ meeting.
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 20222025 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. In November 2023, Mr. Rutledge retired as Executive Chairman from the Board of Directors, but continues to serve as a director emeritus. As a director emeritus, Mr. Rutledge continues to attend Board meetings, but does not have a vote on matters presented.
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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 30, 2024) |
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Total Number of Directors: | 13 | |||||||
| Female | Male | |||||||
Part I: Gender Identity |
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Directors | 1 | 12 | ||||||
Part II: Demographic Background |
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African American or Black | 1 | |||||||
Alaskan Native or Native American | ||||||||
Asian | 1 | |||||||
Hispanic or Latino | 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 designated by either A/N or Liberty Broadband and one designee of each of A/N and Liberty Broadband. Neither A/N nor
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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 committee of the board of directors,Corporate Governance Committee, 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 Chairman of the board of directors and Mr. Zinterhofer is the Lead Independent Director. Although the Company previously separated the roles of CEO andNon-Executive Chairman of the board, in connection with the negotiationBoard. Mr. Winfrey, President and Chief Executive Officer of the Transactions, the Company determined that it was in the best interest of the combined company to combine the roles. The Chairman and CEOa Board member, is responsible for setting the strategic direction for the Company in consultation and with the day to daynecessary approvals of the Board of Directors and is responsible for the day-to-day leadership and performance of the Company, while the Lead Independent Director consults with theCompany.
The Non-Executive Chairman and CEO and presides over meetings of the boardBoard of Directors and executive sessions of independent directors when the Chairman and CEO is not present as well as providingprovides leadership for the non- A/non-A/N and non- Libertynon-Liberty Broadband directors. The Non-Executive Chairman serves as a liaison between the independent directors and the President and Chief Executive Officer and has authority to call meetings of the independent directors. The Non-Executive Chairman leads the Board’s annual evaluation of the President and Chief Executive Officer’s performance. If requested, the Non-Executive Chairman is available for consultation and direct communication with major stockholders and regulators under appropriate circumstances. The Non-Executive Chairman 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 unified Chairman and CEO, a clearly defined and significant lead independent directorNon-Executive Chairman 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,initiatives, which is to usefocus on the evolution of our network and products, expansion of our footprint, and the execution of high-quality operations, including customer service. It allows us to deliver high quality productsmaintain 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.
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In addition to discussions with management, our non-management directors meet regularly in executive sessions that are chaired by our Lead Independent DirectorNon-Executive Chairman with no membermembers of management present. Non-management directors use these executive sessions to discuss matters of concern, as well as evaluations of the CEOPresident and Chief Executive Officer 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.independence, as well as overseeing the Company’s public policy priorities, political engagement strategy and lobbying activities. The Government Affairs team manages the Company’s lobbying activities and reports directly to the President and Chief Executive Officer, with oversight from the Nominating and Corporate Governance Committee. While the Nominating and Corporate Governance Committee provides oversight, our Government Affairs Team is responsible for the activities, positions and daily decision-making consistent with this oversight. The Board has delegated authority and responsibility for state and local campaign contributions to the President and Chief Executive Officer, subject to the provisions of the Company’s Code of Conduct and any other applicable Company policies. Procedurally, corporate political spending plans and decisions are reviewed and approved by the President and Chief Executive Officer. The Nominating and Corporate Governance Committee receives an annual report from the Government Affairs team on the Company’s political engagement strategy, including lobbying activities and expenditures made during the past year and the framework for the coming year. The Board of Directors receives quarterly updates on regulatory activities and policy priorities and regular updates on significant policy issues facing the Company.
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 2023, 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 75% of the shares of our outstanding stock. We also engaged with stockholders who contacted us requesting engagement and have engaged with each of the stockholders who have submitted a proposal for consideration at the 2024 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/
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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, as well as a female candidate nominated for election at the 2024 annual stockholders’ meeting. In 2023, the Nominating and Corporate Governance Committee engaged a third party recruiting firm to further develop its pipeline of potential female director candidates, which resulted in the nomination of Ms. Slaski for election to the Board at the 2024 annual stockholders’ meeting.
The business case for significant gender representation on the Board of Directors driven by the adoption of a board diversity policy was raised by four stockholders (British Columbia Investment Management Corporation, Brunel Pension Partnership, Nest Corporation, and UBS Asset Management) in a proposal originally submitted for consideration at the 2024 annual stockholders’ meeting. We engaged with the stockholders who submitted the proposal, and during the engagement, the Company announced that the Board nominated Carolyn J. Slaski for election to the Board of Directors at the 2024 annual stockholders’ meeting to fill the vacancy created by Craig Jacobson’s decision not to stand for re-election. The Company also reaffirmed to these stockholders its ongoing commitment to ensure gender and other forms of diversity are considered in its director recruitment efforts as detailed in its Corporate Governance Guidelines and described elsewhere in this proxy statement. In exchange, each stockholder proposal proponent agreed to withdraw its proposal. This demonstrates the importance of achieving mutually beneficial outcomes through stockholder engagement efforts. We take seriously the views of our stockholders and take into consideration all the various input we receive, and we intend to continue our stockholder engagement efforts in 2024.
Lobbying Activities and Political Spend. 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 proposals. During our engagement discussions, some stockholders indicated they would appreciate increased disclosure describing the Company’s management and oversight of lobbying and political spend activities. In this regard, we reviewed our practices against the CPA-Zicklin Index of Corporate Political Disclosure and Accountability and as a result, adopted a Political Activities Policy Statement and amended our Nominating and Corporate Governance Committee Charter to provide the Committee with oversight of our lobbying and political contribution activity. The Nominating and Corporate Governance Committee receives an annual report from the Government Affairs team on the Company’s political engagement strategy, including lobbying activities and expenditures made during the past year and the framework for the coming year, and the Board receives quarterly updates on regulatory activities and policy priorities and regular updates on significant policy issues facing the Company. The Company maintains a public policy website that sets out the Company’s views as to regulatory and other policy issues around our business, including the Political Activities Policy Statement. 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 three 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. We received a similar proposal with respect to political spending. Our position on the lobbying activities and political spend proposals are set forth in greater detail under the description of the proposals 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.
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Frequency of a Vote on Executive Compensation. At the 2023 annual stockholders’ meeting, stockholders were presented with an advisory, nonbinding proposal on whether advisory, nonbinding votes on the Company’s executive compensation should be held every one, two or three years. The Company recommended and the stockholders’ voted in favor of a triennial vote. The Board of Directors approved a triennial vote on executive compensation and referred the frequency of holding an advisory vote on executive compensation to the Nominating and Corporate Governance Committee of the Board of Directors for further assessment and subsequent recommendation to the Board of Directors for further consideration. The Committee solicited input from management and key stakeholders on the topic and considered peer data. After consideration, the Committee concluded and recommended to the Board that the Company continue to hold a triennial vote.
EEO-1 Disclosure and Diversity, Equity and Inclusion Reporting. Two stockholder proposals were submitted for consideration at the 2023 annual stockholders’ meeting regarding EEO-1 disclosure and diversity, equity and inclusion reporting. 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 withdrew 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 2024.
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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20202023 Director Compensation
The non-employee director compensation package for 20202023 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,Non-Executive Chairman, 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 $20,000 per year. Mr. Rutledge,Winfrey, Charter’s ChairmanPresident and CEO, wasChief Executive Officer, is the only current director who was also an employee during 2020.2023.
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The following table sets forth information regarding the compensation paid or issued to those non-employee members of the boardBoard of directorsDirectors listed below, as well as to Mr. Rutledge as a non-employee Director Emeritus, for services rendered for the fiscal year ended December 31, 2020.2023.
Name | Fees Earned or Paid in Cash ($) (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 | 199,935 | 389,935 | ||||||||||||||||||
Kim C. Goodman | 30,000 | 299,186 | 329,186 | 30,000 | 319,830 | 349,830 | ||||||||||||||||||
Craig Jacobson | 20,000 | 299,186 | 319,186 | 20,000 | 319,830 | 339,830 | ||||||||||||||||||
Gregory B. Maffei | 45,000 | 299,186 | 344,186 | 45,000 | 319,830 | 364,830 | ||||||||||||||||||
John D. Markley, Jr. | 190,000 | 179,613 | 369,613 | 190,000 | 199,935 | 389,935 | ||||||||||||||||||
David Merritt | 200,000 | 179,613 | 379,613 | 200,000 | 199,935 | 399,935 | ||||||||||||||||||
James E. Meyer | 140,000 | 179,613 | 319,613 | 140,000 | 199,935 | 339,935 | ||||||||||||||||||
Steven A. Miron | 25,000 | 299,186 | 324,186 | 25,000 | 319,830 | 344,830 | ||||||||||||||||||
Balan Nair | — | 299,186 | 299,186 | — | 319,830 | 319,830 | ||||||||||||||||||
Michael Newhouse | 160,000 | 179,613 | 339,613 | |||||||||||||||||||||
Michael A. Newhouse | 160,000 | 199,935 | 359,935 | |||||||||||||||||||||
Mauricio Ramos | 145,000 | 179,613 | 324,613 | 25,000 | 319,830 | 344,830 | ||||||||||||||||||
Thomas M. Rutledge (Director Emeritus) | — | 127,985 | 127,985 | |||||||||||||||||||||
Eric Zinterhofer | 65,000 | 449,536 | 514,536 | 65,000 | 469,700 | 534,700 | ||||||||||||||||||
| (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 | 18 | 2021 Proxy Statement
| (2) | Represents the grant date fair value of restricted stock grants for directors, which were granted on April |
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Executive Officers
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.
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Kevin D. Howard | Executive Vice President, Chief Accounting Officer and Controller | |
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R. Adam Ray | Executive Vice President, | |
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Information regarding our executive officers, and our other senior company leaders, other than Mr. RutledgeWinfrey who also serves as a director, is set forth below. Information regarding our other senior company leaders is available on the “Investors” section of our website at ir.charter.com.
President, Product and
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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.
has been President, Product and Technology of the Company since December 2022. Mr. DiGeronimo oversees Charter’s product, engineering, software development and information technology, 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, Executive Vice President, Chief Product Officer, and he was appointed Chief Product and Technology Officer |
Mr. DiGeronimo is Chief Product and Technology Officer at Charter Communications. 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. He was appointed to his current position 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. 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 primaryin 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, a 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.
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Mr. Dykhouse has served as Executive Vice President, General Counsel and Corporate Secretary since 2013 having previously been Senior Vice President, General Counsel since January 2011 and a Vice President of Charter from 2006 to 2011. 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.
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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, 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.
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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, Business Intelligence 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.
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Executive Vice President, General Counsel and Corporate
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Mr. Fisher is Executive Vice President, Corporate Finance & Development 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. Mr. Fisher’s responsibilities expanded in 2019 to include providing more dedicated corporate development leadership for Spectrum Enterprise and Spectrum Reach, and were expanded again in 2021 to include oversight of all Treasury activities. From 2019 to 2021, Mr. Fisher also had responsibility for managing Charter’s investor relations and procurement functions. Mr. Fisher joined Charter in 2013 from Guggenheim Partners, 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 and in the U.S. Navy. He received a B.S. in engineering from the United States Naval Academy.
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Mr. Kline serves as Charter’s Executive Vice President, and President 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. MarchandHaughton joined Charter as Executive Vice President, Human ResourcesGeneral Counsel and Corporate Secretary in 2015.2023. Mr. Marchand is responsible for all human resources strategies, policiesHaughton serves as Charter’s chief legal officer and practices for all employees. He oversees all aspectslegal functions across a broad range of HRdisciplines including recruitment, trainingcorporate, commercial, transactional, litigation, product, and development, HR operations including payroll, HR shared services and HR systems,programming, as well as compensation and benefits.regulatory legal matters. Mr. MarchandHaughton 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.
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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 CablevisionMadison Square Garden Entertainment Corp. (MSG Entertainment), where he served as Seniorthe Company’s Executive Vice President, OperationsGeneral Counsel and Business Planning. He spent 27 years at Cablevision in several business planning positions at theCorporate Secretary, working closely with 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, internetleadership to support MSG Entertainment’s long-term direction 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.growth. 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.
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MSG Entertainment, 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 recentlyHaughton served as Senior Vice President and General Counsel at Samsung Electronics America, Inc. He served as Samsung’s chief legal officer for the U.S. and was responsible for providing counsel to the CEO and senior leadership on all legal matters affecting Samsung and its subsidiaries. Mr. Haughton spent 10 years at Cablevision Systems Corporation 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 of increasing responsibility. In his last role at Time Warner Cable, includingCablevision as GroupSenior Vice President, Associate General Counsel and Assistant Secretary, Mr. Haughton provided ongoing legal counsel to the Board of Commercial EngineeringDirectors and Operations, Vice President of Commercial Engineering for Time Warner Cable’s West Region,senior executive management on corporate governance, public company reporting, corporate finance and Directormajor strategic company-wide corporate transactions, including Cablevision’s sale to Altice USA in 2016. Mr. Haughton began his legal career in the Texas Region.New York office of Cravath, Swaine & Moore LLP, where he spent seven years in the firm’s Corporate Practice where he specialized in domestic and cross-border mergers and acquisitions, corporate finance, and securities law matters. Mr. Srinivasan beganHaughton has been recognized with several industry honors including Chambers’ “Global Top 100 GC Influencers” (2019). Mr. Haughton received his career at Sprint in a series of engineering roles with increased responsibility. He received a B.S.J.D. from Anna University, a master’s degreeYale Law School and doctorate in materials sciencehis B.A. from Kansas State University, and a master’s degree in business administration from the Graduate School of Business at the University of Kansas.Michigan.
Kevin D. Howard Executive Vice President, Chief Accounting Officer and Controller Age: 54 |
Mr. Howard is Executive Vice President, Chief Accounting Officer and Controller at Charter. He joined Charter in 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. Howard is responsible for Charter’s operational and technical accounting, taxes, financial reporting, payables, business continuity and enterprise resource planning operations. Mr. Howard joined Charter from Arthur Andersen LLP, where he served as an auditor in the audit division for nearly a decade. He is a certified public accountant and a certified managerial accountant. He received a B.S. in finance and economics from the University of Missouri-Columbia. |
R. Adam Ray Executive Vice President, Chief Commercial Officer Age: 48 |
Mr. Ray is Executive Vice President, Chief Commercial Officer at Charter. He oversees all residential and SMB marketing and sales activity for Charter, including inbound and outbound telesales, retention, direct and digital sales channels. He is also responsible for Cable Operations Business Planning, Spectrum stores and retail partners, sales analytics and Spectrum Community Solutions, which provides residential TV, Spectrum Internet® and voice services to apartments, condos, and gated single-family community developments. Mr. Ray joined Charter in 2005 and has held several leadership positions, most recently as EVP, Spectrum Community Solutions. Prior to that he served as Regional Vice President of Field Operations for the Florida Region. He also 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 | 2522 | 20212024 Proxy Statement
Compensation Committee Interlocks
and Insider Participation
During 2020, no member of Charter’s2023, the Compensation and Benefits Committee consisted of Messrs. Conn, Maffei, Miron, Ramos and Zinterhofer, none of which was an officer or employee of Charter or any of its subsidiaries. During 2020, Mr. Zinterhofer served as Lead Independent DirectorSee “Certain Relationships and Mr. Rutledge served as Chairman and CEO.Related Transactions” below for information on related party transactions.
During 2020:2023: (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
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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 2020.2023. 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 20202023 Named Executive Officers
Thomas M. Rutledge, Chairman and Chief Executive Officer
| • | Christopher L. Winfrey, President and Chief Executive Officer |
John Bickham, President and Chief Operating Officer
| • | Richard J. DiGeronimo, President, Product & Technology |
Rich DiGeronimo, Chief Product & Technology Officer
| • | Jessica M. Fischer, Chief Financial Officer |
David G. Ellen, Senior Executive Vice President
| • | Kevin D. Howard, EVP, Chief Accounting Officer & Controller |
| • | R. Adam Ray, EVP, Chief Commercial Officer |
Christopher L. Winfrey, Chief Financial Officer
| • | Thomas M. Rutledge, Board Member Emeritus (previously served as Executive Chairman until his retirement effective November 30, 2023) |
Fiscal 20202023 Operational and Financial Highlights
Despite the significant challenges posed by the COVID-19 pandemic over the course of 2020,In 2023, Charter continued to successfully serve its customers and operate its business as a provider of connectivity services. In response to the pandemic, Charter tookachieved a number of significant actions duringimportant successes with respect to its multi-year network evolution and expansion initiatives. First, we added 295,000 new subsidized rural passings, with a penetration rate of nearly 50% (after 12 months) that continues to grow. Second, we continued to enhance our network to deliver multi-gig speeds across our entire footprint, with work on track to be completed by the year:end of 2026 at a low cost of approximately $100 per passing. Finally, we further advanced the development and convergence of our product offerings, including:
| • | Continued strong performance of the high-value Spectrum One bundle of internet and mobile products; and |
Offered customers a Remote Education Offer pursuant
| • | The launch of our industry-leading Xumo platform that allows customers across our entire footprint to access linear and direct-to-consumer content within an easy-to-use interface. |
These accomplishments position Charter well for future growth through the delivery of high-quality connectivity and video products to which new customers with students or educators in the household were eligible to receive Charter’s Internet serviceconsumers and, 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. For the fiscal year ended December 31, 2020:2023, translated into the following operational and financial performance milestones:
Total customer relationships grew by 1,895,000, or 6.5%
| • | Mobile lines grew by 2.5 million, Internet customers by 155,000; 13% of Internet customers now have Spectrum Mobile |
Mobile lines grew by 1,293,000, 345,000 more than in the prior year
| • | Revenue grew by 1.1% to $54.6 billion |
Revenue grew by 5.1% to $48.1 billion
| • | Adjusted EBITDA grew by 1.3% to $21.9 billion(1) |
Adjusted EBITDA grew by 9.9% to $18.5 billion
| • | Generated free cash flow of $3.5 billion(1) |
| • | Charter also purchased approximately 9.0 million shares of Charter Class A common stock and Charter Holdings common units for approximately $3.6 billion in 2023 at an average price per share of $396.65. |
Free cash flow grew by $2.5 billion or 53.4%
| (1) | See “Non-GAAP Financial Measures” in Appendix A. |
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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.
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 tracked2023 (the Secondary Peer Group is not included on the graph. The changes to peer group companies are discussedgraph). See “Compensation Peer Groups” section below for further in this Compensation Discussion & Analysis.details on Charter’s Primary and Secondary Peer Groups.
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
Each year, the Committee works closely with the CEO, management and the Committee’s consultants in talent planning and managing executive transitions for the Company’s executive officers. The work conducted includes promoting or hiring executives in connection with the expansion and transition of responsibilities, conducting talent development processes to support such activity, and crafting the proper compensation packages and incentives. The Committee believes this process has been effective at progressing Charter’s highly experienced management team and maintaining the focus to deliver on Charter’s strategies for growth and value creation. Following significant talent activity in 2022, including the transition of the CEO role from Mr. Rutledge to Mr. Winfrey and the promotion of Mr. DiGeronimo to President, Product & Technology, there were no promotions or role changes among the Named Executive Officers in 2023, with the exception of Mr. Rutledge’s retirement effective November 30, 2023 as previously planned and pursuant to his employment agreement and his appointment as Board Member Emeritus effective November 30, 2023.
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 20202023 and the key outcomes demonstrating theresulting alignment between compensation realized by our NEOs and results achieved by the Company.
2020Summary of 2023 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.
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.
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.
Program Designs
Annual Incentive Plan
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| • | Annual cash incentive with target opportunities based on a percentage of base salary and representing a meaningful portion of the overall cash compensation mix — all NEOs participated in the annual incentive plan with target bonus opportunities ranging from 85% to 250% of base salary, tying a substantial portion of cash compensation to the achievement of financial results and strategic business objectives. |
| • | Threshold bonus payout level set at 60% of target and maximum bonus payout level set at 150% of target —payout range balances downside and upside earnings potential to create a strong incentive for the achievement of sustainable financial and operational performance, delivered through the execution of Charter’s growth-oriented strategy. |
| • | 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. For all NEOs, the metrics were total revenue (excluding mobile device related revenue) weighted at 20%, total Adjusted EBITDA weighted at 60%, and Strategic Objectives weighted at 20%. For 2023, Strategic Objectives related to the execution of Charter’s network evolution and expansion initiatives and the effective management of capital and free cash flow. |
| • | Challenging, meaningful performance objectives — performance levels are set to align with budget and drive strong revenue and Adjusted EBITDA results. |
2016 Performance-based Program (Messrs. Rutledge, Bickham, Ellen and Winfrey*)
Annual Long-Term Incentive Plan
Five-year long-term incentive program (the “2016 Performance-based Program”) — awards to participants were granted in 2016 and designed to provide value for the five-year period of the grants.
| • | Annual equity grants with target opportunities set as a fixed dollar value and representing the majority of the total annual compensation package — all NEOs participated in the annual long-term incentive plan, which generally awards annual equity grants to participants in January of each year, with a target award value representing between 59% to 76% of total compensation and delivered in a mix of stock options and RSUs. |
Award mix that emphasizes stock price appreciation — grants generally delivered in a mix of 90% stock options and 10% RSUs. 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. Winfrey serving as President and CEO and Mr. Rutledge serving as Executive Chairman until his retirement).•
| • | Grants with multi-year time-based vesting period — grants 100% vest on the third anniversary of the grant date (3-year cliff vesting), ensuring that performance achievement and value delivered under the program are tied to a long-term time horizon. |
5-Year Performance-Based Equity Program (the “2023 Performance Equity Program”)
| • | Special equity program providing multiple years of long-term incentive value in a single grant, aligning with multi-year strategic business initiatives — all NEOs except for Mr. Rutledge participated in the 2023 Performance Equity Program, with awards made to program participants in February. Under the program, each participant received a target award value equal to 5x their annual long-term incentive guideline, less value already delivered through the annual long-term incentive plan in January. By combining equity award value that would ordinarily be granted in future years into a single grant with vesting tied to continued service and stock price achievement, the 2023 Performance Equity Program creates additional incentive for participants to drive sustained stock price growth. 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 provide converged gigabit connectivity across Charter’s entire footprint – the successful execution of which are key drivers of stock price growth. The 2023 Performance Equity Program is comparable in design to the program Charter adopted in 2016, which was also intended to incentivize management through a multi-year, transformational period, specifically the integration of multiple businesses following the Transactions completed in that year. |
| • | Option-heavy award mix that mirrors the annual long-term incentive plan and emphasizes stock price appreciation — all participants received grants such that, of the total number of options and units granted, 90% of such total was stock options and 10% was RSUs. This is comparable to the mix for the annual long-term incentive plan (which uses a |
Charter Communications | 26 | 2024 Proxy Statement
mix of 90% stock options and 10% RSUs, based on the allocation of value between the different vehicles versus the overall number of options and units granted) and ties the substantial majority of value realized to stock price appreciation. |
| • | Time-based vesting period of 3 to 5 years, longer than the 3-year cliff vesting schedule used in the annual long-term incentive plan and aligning with the 5-year period over which the program is intended to deliver value — grants are subject to time-based vesting criteria with equal components of the award becoming eligible to vest (subject to additional performance criteria) on each of the third, fourth and fifth anniversaries of the grant date. This vesting structure provides a longer time horizon over which awards are earned relative to the annual long-term incentive plan, consistent with the multiple years of award value delivered under the program. |
| • | Performance-based vesting criteria that tie vesting to the achievement of targeted levels of stock price appreciation — in addition to time-based vesting criteria, awards under the 2023 Performance Equity Program require the achievement of significant increases to Charter’s stock price in order to vest, with each tranche of stock options and RSUs having an associated stock price hurdle that must be achieved in order for that tranche to vest. There are a total of six price hurdles ranging from $507 to $1,000 and representing between 28% to 152% stock price growth relative to the February 10, 2023 closing stock price of $396.94 (the reference point used by the Committee and the Board when approving performance objectives for the program). These levels of price appreciation correspond to 5-year compound annual growth rates between 5% and 20%, and if a price hurdle is not achieved by the sixth anniversary of the grant date then the associated stock options and RSUs will be forfeited. The specific time and performance-vesting requirements of stock options and RSUs under the 2023 Performance Equity Program, along with other relevant terms and conditions of these awards, are described further in the Long-Term Incentives section of this CD&A. |
| • | No accelerated vesting upon any involuntary termination or voluntary resignation occurring outside of a change in control — accelerated vesting is only provided in circumstances where the associated price hurdle has been achieved and either (i) the termination is due to death or disability, or (ii) an involuntary termination without cause or voluntary resignation for good reason in connection with a change in control. This treatment is an important shareholder protection mechanism and ensures that participants only recognize value from the program in connection with the achievement of stock price appreciation over a multi-year time horizon. |
Long-Term Incentive Program Aligns Pay and Performance
Since the completion of the Transactions, Charter has had the same general approach to incentive design. Specifically, 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. These long-term awards have either been delivered through annual grants were delivered in aof time-vested awards or as part of special, multi-year performance-based equity programs. In each case, awards utilize an option-heavy mix, and the multi-year programs further incentivize price appreciation by granting multiple years of 90% stock optionsvalue up-front and 10% RSUs.
Multi-year time-based vesting period — eligibility for vesting ranges from 3tying such value to 5 years after grant.
Performance-based vesting criteria tied to significant levels ofadditional stock price appreciation — in additionhurdle vesting requirements. Over time, Charter’s consistent approach to time-based criteria, the vesting of all awards is further contingent upon 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-basedlong-term incentive design has created a strong linkage between compensation realized by NEOs 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 ifsustained 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 appreciation was required for participants to realize value atlong-term. From 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 completiontime of the Transactions, Charter’s stock price was $227.41 per share with a total market capitalization of $70.2 billion.performance can be summarized as follows:
| • | Over an approximately 5-year period, Charter achieved significant stock price growth, 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 (the closing stock price on September 2, 2021). |
As of December 31, 2020,
| • | Over the following year, driven by an overall reduction in equity market valuations (in part due to an inflationary macroeconomic environment and rising interest rates) and a slowdown in growth resulting largely from the post-pandemic reduction in move volume and increased competition, the stock price declined by 63% to a low of $303.35 (the closing stock price on September 30, 2022). |
| • | Charter’s stock price subsequently moved higher as Charter remained focused on the execution of multi-year network evolution and expansion initiatives that are critical drivers of future value, increasing by 28% to $388.68 (the closing stock price on December 29, 2023). |
Over this same time period, the closing priceconsistent application of Charter’s Class A common stock was $661.55 withlong-term incentive design philosophy has resulted in both a total market capitalizationsignificant degree of $143.1 billion representingperformance accountability as well as a balanced forward-looking incentive profile for our NEOs. Of currently outstanding, unvested NEO equity awards:
| • | The 2021 and 2022 annual stock option grants (vesting in 2024 and 2025) are underwater with grant prices of $625.55 and $588.825 and require price appreciation of 61% and 51% (from Charter’s December 29, 2023 closing |
Charter Communications | 27 | 2024 Proxy Statement
stock price), respectively, to be at-the-money. These stock options, which represented at least 90% of the long-term incentive mix in each year, demonstrate how the long-term incentive plan creates accountability for sustained stock price growth, with future shareholder returns needing to meet and exceed previously achieved levels in order for NEOs to realize value from these historical awards. |
| • | The 2023 annual stock option awards (vesting in 2026) have a grant price of $387.375, approximately equal to the December 29, 2023 closing stock price. These stock options therefore provide NEOs with an incentive to drive stock price growth from current levels, in particular relative to the 2021 and 2022 awards which will not generate value until Charter’s stock price has grown substantially above current levels. |
| • | Stock options granted under the 2023 Performance-Based Equity Program (eligible to vest over 2026 – 2029) have a grant price of $380.53 and have vesting tied to the achievement of price hurdles ranging from $507 to $1,000. These stock options provide significant earnings opportunity for price appreciation from current levels, but such value can only be realized upon the achievement of specific price appreciation objectives between 3 to 5 years after the grant date. |
Charter believes that the above stock price increaseperformance and long-term incentive outcomes demonstrate the desired alignment between NEO compensation opportunities and long-term shareholder value creation. This alignment is further illustrated in the Pay Versus Performance disclosure on page 79 of 191%this proxy statement.
Mix of Pay
Charter’s compensation structure for the 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 a total market capitalization increase of 104% or $72.9 billion.without taking into account the performance-based incentives derived from previously vested equity awards. The compensation mix delivered in 2023 to the CEO, other NEOs, and the Executive Chairman, based on the values disclosed in the Summary Compensation Table, was as follows:
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Were awards under the 2023 Performance Equity Program to be annualized over 5-years (i.e., through the last vesting date), the mix was as follows for the CEO and Other NEOs (excluding Mr. Rutledge who did not participate in the program):
|
Compensation Actions in 20202023
The Committee’s 2020Committee established 2023 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 20202023 fiscal year. The actions undertaken by the Committee for 2023 included the following:
| 1. | Amended the employment agreements for Messrs. Winfrey and DiGeronimo effective February 22, 2023 in connection with equity awards made under the 2023 Performance Equity Program on the same date. |
The amendments to the employment agreements for Messrs. Winfrey and DiGeronimo removed references to future annual equity grants and excluded grants made under the 2023 Performance Equity Program from the section that related to the treatment of certain equity incentive awards upon termination. Specifically, the amendments clarified that 2023 Performance Equity Program grants are not subject to comparable treatment upon termination as other awards made pursuant to the original employment agreements. Such awards are generally subject to full vesting upon death or disability and accelerated pro rata vesting for a termination without cause or resignation for good reason and, for Mr. Winfrey, continued vesting for a termination due to non-renewal following the expiration of the term of his employment agreement. Per the terms of the respective grant agreements, the 2023 Performance Equity Program awards are only eligible for accelerated vesting upon death or disability or upon a termination without cause or resignation for good reason in connection with a change in control, and in each case only to the extent that the associated price hurdles have been satisfied as of such date. For all NEOs,Mr. Winfrey, upon a termination in connection with the non-renewal of his employment agreement, the 2023 Performance Equity Program awards also remain subject to continued vesting for an additional two years following such termination, but contingent upon the time-based and performance vesting criteria being achieved during that period.
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| 2. | Entered into a new employment agreement with Ms. Fischer in connection with her continued service as Chief Financial Officer. |
In December 2022, the Committee approved entering into a formulaicnew employment agreement with Ms. Fischer, increasing her long-term incentive opportunity from $3.5 million to $5.5 million effective with the annual equity grant on January 17, 2023 and increasing her base salary to $800,000 as of the February 5, 2023 effective date of the new employment agreement. Ms. Fischer’s annual bonus opportunity remained at 150% of base salary. The agreement has an initial term through February 5, 2025, and Ms. Fischer’s resulting annual compensation package is as follows:
Pay Element | Prior | New | ||
Base Salary | $700,000 | $800,000* | ||
Annual Incentive | 150% of base salary | 150% of base salary | ||
Long-Term Incentive | $3.5 million | $5.5 million** |
| * | Effective as of the February 5, 2023 effective date of the new employment agreement. |
| ** | Effective for the annual equity grant on January 17, 2023. |
| 3. | Established the 2023 annual incentive plan. |
Under Charter’s 2023 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 (All NEOs) | Threshold / Maximum Performance (% of Target) | ||
Revenue | 20.0% | 98.0% / 101.0% | ||
Adjusted EBITDA | 60.0% | 96.5% / 102.0% | ||
Strategic Objectives | 20.0% | N/A |
Strategic objectives related to Capital and Free Cash Flow Management and the execution of Network Evolution and Network Expansion Initiatives for all NEOs.
| 4. | Granted annual equity awards to Messrs. Winfrey, DiGeronimo, Howard, Ray and Rutledge and Ms. Fischer on January 17, 2023. |
All NEOs received grants under Charter’s annual equity program on January 17, 2023 based on their long-term incentive opportunities then in effect. Messrs. Winfrey, DiGeronimo, and Rutledge’s long-term incentive opportunities were as set forth in their employment agreements dated September 20, 2022. The individual grant values and equity mixes were as follows:
Executive | Annual LTI Grant Guideline | Equity Mix | ||
Christopher L. Winfrey | $17.0 million | 100% stock options | ||
Richard J. DiGeronimo | $10.0 million | 90% stock options / 10% RSUs | ||
Jessica M. Fischer | $5.5 million | 90% stock options / 10% RSUs | ||
Kevin D. Howard | $1.5 million | 90% stock options / 10% RSUs | ||
R. Adam Ray | $3.0 million | 90% stock options / 10% RSUs | ||
Thomas M. Rutledge | $15.0 million | 100% stock options | ||
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| 5. | Granted equity awards under the 2023 Performance Equity Program to Messrs. Winfrey, DiGeronimo, Howard, Ray and Ms. Fischer on February 22, 2023. |
ForExcept for Mr. Rutledge, all NEOs participated in advance ofand received grants under Charter’s 5-year performance-based equity program on February 22, 2023. The value granted to each NEO was equal to 5x their annual LTI grant guideline less the expiration of his current employment agreementvalue granted under the annual equity program on MayJanuary 17, 2021,2023. The individual grant values under 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 andprogram were as follows:
Executive | Annual LTI Grant Guideline | 5-Year LTI Value | Net Value Granted under 2023 Performance Equity Program | |||||||
Christopher L. Winfrey | $17.0 million | $85.0 million | $68.0 million | |||||||
Richard J. DiGeronimo | $10.0 million | $50.0 million | $40.0 million | |||||||
Jessica M. Fischer | $ 5.5 million | $27.5 million | $22.0 million | |||||||
Kevin D. Howard | $ 1.5 million | $ 7.5 million | $ 6.0 million | |||||||
R. Adam Ray | $ 3.0 million | $15.0 million | $12.0 million | |||||||
Apart from the Company may mutually agree upon him transitioningactions described above, there were otherwise no changes 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 agreement vest in full on the third anniversary of the date of grant and have a 10-year term to exercise, and the number of stock options granted is based on the Black-Scholes value of the stock options at grant.
For Mr. Bickham, in advance of the expiration 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 $1,875,000long-term incentive compensation 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 of 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 value of the stock options at grant. NEOs.
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 madeCompensation Actions in 2024
In addition to theirthe above, in December 2023 the Committee approved a two-year renewal of Mr. Ray’s employment agreement, increasing his base salary annual incentive orfrom $625,000 to $725,000 and his target long-term incentive opportunities. As participants inopportunity from $3.0 million to $3.75 million as of the 2016 Performance-based Program described above, Messrs. Ellen and Winfrey did not receive awards underJanuary 19, 2024 effective date of the 2020 annual equity program in which most other senior executives, includingamended agreement. In connection with the increase to Mr. DiGeronimo, participated. However, at the time the 2020 annual equity program was approved,Ray’s long-term incentive opportunity, the Committee also approved an off-cycleequity awardsaward of $7.5 million and $9 million for Messrs. Ellen and Winfrey, respectively. These awards were granted at$750,000, equal to the same time annual grants occurred onincrease in his target long-term incentive opportunity, with a January 15, 2020 and were otherwise structured the same as for other senior executives who participated in the annual equity program, with awards19, 2024 grant date. The award was 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 fullvests on the third anniversary of the grant date of grant withand provides 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,number of stock options granted equals 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 expirationportion 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 anticipatedexecutive’s grant value allocated 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
Charter Communications | 30 | 2021 Proxy Statement
90% stock options and 10% RSUs (with the number of awards granted being based ondivided by the Black-Scholes value ofper stock optionsoption at grant, and the number of RSUs granted equals the portion of the grant value allocated to RSUs divided by the grant price (the average of RSUs)the high and vests in fulllow prices of Charter common stock on the third anniversary of the date of grant with a 10-year term to exercise the stock options.
Compensation Actions in 2021grant).
In addition toDecember 2023, the above, in December 2020 the Committee also approved the Company’s annual equity program for 2021,2024, with awards under thisthe program granted on January 15, 202116, 2024 to all eligible employees and including allemployees. However, none of the NEOs except for Mr. Bickham. Pursuant to the terms of their respective employment agreements, Mr. Rutledge received a grant of $30 million in stock options and Mr. Bickham did not receive an equity award as his grant for 2021 was included in the award made upon the execution of his amended employment agreement on December 23, 2020. Messrs. Ellen and Winfrey received grants of $5 million and $6 million, respectively, and these represented their first awards under the annual equity program since the commencement of the 2016 Performance-based Program (in which they participated in lieu ofdue to their participation in the annual2023 Performance Equity Program. When determining and approving equity program forawards to executives, 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 underCommittee has consistently authorized the annual equity program were deliveredawards to be effective in a mixmid-January of 90% stock options and 10% RSUs (with the number of awards granted being based on the Black-Scholes value of stock optionseach year, and the grantCommittee has not taken into account any fluctuations in Charter’s stock price of RSUs). All grantswith respect to the NEOs vest in full on the third anniversarytiming of the date of grant with a 10-year term to exercise stock options.annual awards or any other equity awards granted.
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.
Charter Communications | 31 | 2024 Proxy Statement
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, 2020,2023, 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, including the design of the 2023 Performance Equity Program and the amount of compensation delivered through the program. The Committee has determined that there was no conflict of interest between its compensation consultant and the Committee during the year ended December 31, 2020.2023.
Charter Communications | 31 | 2021 Proxy Statement
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 |
| 3. | Long-term equity |
|
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
|
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
|
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:
North American publicly traded companies, in particular internet providers and organizations in the video programming distribution, wireless communication or advertising spaces
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, the Committee reviewed the compositionmembers of the peer group and approved four changes to the 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..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 $14 billion to $216 billion in annual revenue (0.25x to 4.0x Charter’s revenue) |
Charter Communications | 32 | 2021 Proxy Statement
| • | Relevant Industries: Cable & Satellite, Integrated Telecommunication Services and Wireless Telecommunications, Movies & Entertainment and Broadcast |
In addition to the peer group,Primary 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 reviewSecondary Peer Group.
Charter Communications | 32 | 2024 Proxy Statement
In 2023, the Committee reviewed the composition of the secondarypeer groups, including the impact of merger and acquisition activity on companies within the groups, and determined that no changes to either 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.were necessary.
| Primary Peer Group | ||||||
| AT&T Inc. | Fox Corp. | Paramount Global | Warner Bros. Discovery, Inc. | |||
| Cisco Systems, Inc. | Liberty Global Plc | The Walt Disney Company | ||||
| Comcast Corporation | Lumen Technologies, Inc. | T-Mobile US, Inc. | ||||
| DISH Network Corp. | Netflix, Inc. | Verizon Communications Inc. | ||||
| Secondary Peer Group | ||||||
| IBM | ||||||
| Johnson & Johnson | ||||||
| Merck & Co., Inc. | ||||||
| Mondelez International, Inc. | ||||||
| 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 in Mr. Rutledge’s salary from $2,000,000 to $2,500,000 in connection2023, with the amendmentonly base salary change in 2023 relating to Ms. Fischer, whose base salary increased from $700,000 to $800,000 as of his employment agreement and with such increase effective October 27, 2020 (thethe February 5, 2023 effective date of his amendedher new employment agreement). Mr. Rutledge’sagreement with the Company. In setting Ms. Fischer’s new base salary, had been at the $2,000,000 levelCommittee considered the factors noted above, in particular her performance and contributions since he joinedassuming the Companyrole of Chief Financial Officer in 2012. The Committee also approved an increase in Mr. Bickham’s salary from $1,500,000 to $1,875,000, effective January 1, 2021 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, compensation levels for comparable roles 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.October 2021. 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, 2023 | Change from Prior Year | ||||
Christopher L. Winfrey | $1,700,000 | None | ||||
Richard J. DiGeronimo | $1,450,000 | None | ||||
Jessica M. Fischer | $ 800,000 | 14.3% increase from $700,000 effective February 5, 2023 | ||||
Kevin D. Howard | $ 600,000 | None | ||||
R. Adam Ray | $ 625,000 | None | ||||
Thomas M. Rutledge | $1,250,000 | * | None | |||
| * |
|
|
Charter Communications | 33 | 20212024 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 2020,2023, 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% for Mr. Rutledge20%) and 20% for the other NEOs) and cabletotal Adjusted EBITDA (weighted 37.5% 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 10%) and the execution of Network Evolution and Expansion Initiatives (weighted 10%).
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.
Based on Charter’s 2020 cable2023 performance achievement against the Annual Incentive Plan’s revenue and cableAdjusted EBITDA goals and strategic objectives, the Committee approved an overall incentive payout of 82.35% of the target annual incentives for the NEOs. With respect to the financial performance objectives, Charter’s 2023 revenue and Adjusted EBITDA results represented strong year-over-year growth, especiallyboth fell below targeted levels under the plan. Revenue results fell slightly below threshold with actual performance representing 97.8% of target versus the plan threshold of 98.0% of target, and, in lightconsideration of the COVID-19 pandemic. Thebusiness and economic environment in which such revenue performance was achieved, the Committee considereddecided to pay out the financial impactrevenue component of the plan at 55.62% of target (versus the 60% of target threshold payout level), extrapolating the payout below threshold on a straight-line basis in proportion to the Company from COVID-19 by reviewing the financial impacts disclosedcorresponding revenue achievement relative to the Company’s investors since the beginning of the pandemic. Given the extraordinary efforts of management 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 cablethreshold. Adjusted EBITDA performance metrics forresults fell between the COVID-19 impacts, with adjustments capped such that adjusted results could not exceed 100% of target for either metric. Factoring in these adjusted results, cable revenue achievement fell betweenplan’s threshold and target performance levels
Charter Communications | 34 | 2021 Proxy Statement
resulting in and the Committee approved a payout level of 91.78% of target, and cable Adjusted EBITDA achievement was at target, resulting in a payout of 100%75.38% of target. The
In determining payout levels for the strategic objectives regarding Network Evolution and Expansion and Capital and Free Cash Flow Management, the Committee considered the below COVID-19 impacts toevaluated the Company’s cable revenue and cable Adjusted EBITDA:2023 performance achievement against these objectives, considering the following in particular:
$ 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 | ) | |||
| • |
|
| • | Continued to build and staff the construction teams necessary to expand Charter’s footprint, including further development of the underground construction team established in 2022 and the creation of a new aerial construction team. |
| • | Completed the initial wave of the high split project in certain targeted markets. |
| • | In October 2023, launched the new Xumo product, which allows customers to access linear and direct-to-consumer video content in an easy-to-use interface and serves as Charter’s go-to-market platform for |
| • | Actively managed our balance sheet and free cash flow in anticipation of |
| • | Calibrated share buybacks within leverage targets to reflect higher investments in the |
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.
The Committee also evaluated the Company’s 2020 performance achievement withWith 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 $2.5 billion greater than 2019, representing a 53.4% increase year-over-year.
For Mr. Rutledge, the management of the Company’s talent over the course of the year and achievements associated with managing business operations and implementing strategies in response to the COVID-19 pandemic, including acceleration of the self-installation program, adoption of self-help tools by customers, implementation of remote working strategies, and the successful response to and engagement with various government agencies and officials throughout the pandemic.
For NEOs other than the CEO, a payout of 110.00% was approved with respect to the Mobile product strategic objective and a payout of 115.00% was approved with respect to130% for the Capital and Free Cash Flow Management objective and 130% for the Network Evolution and Expansion strategic objective. For Mr. Rutledge’sobjective, resulting in an overall strategic objectives which included additional objectives relating to talent planning and the management of the Company’s response to the COVID-19 pandemic, the Committee determined that a payout of 103.00% was appropriate.130% for NEOs. The resulting overall annual incentive payouts were 100.47% of Mr. Rutledge’s target annual incentive and 100.86% oftables below detail the target annual incentive for the other NEOs; without the COVID-19 adjustments and assuming the Committee would not have made a different determination on the performance of the strategic objectives, the payouts would have been 96.24% of target and 94.09% of target, respectively. The annual incentive calculations for Mr. Rutledge and the other NEOs are detailed in the tables below.NEOs.
2020
Charter Communications | 34 | 2024 Proxy Statement
2023 Annual Incentive Payout – CEO
Metric | Target ($ 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 | $53,845 | $52,650 | 55.62 | % | 20.0 | % | 11.12 | % | ||||||||||||
Adjusted EBITDA | $22,376 | $21,894 | 75.38 | % | 60.0 | % | 45.23 | % | ||||||||||||
Strategic Objectives | Discretionary Assessment | 130.00 | % | 20.0 | % | 26.00 | % | |||||||||||||
Total | 100.0 | % | 82.35 | % | ||||||||||||||||
2020 Annual Incentive Payout – All Other NEOs
Metric | Target ($ 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 | % | ||||||||||
Strategic Objectives | Discretionary Assessment | 112.50 | % | 20.0 | % | 22.50 | % | |||||||||||||
Total | 100.0 | % | 100.86 | % | ||||||||||||||||
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 revenue, and Adjusted EBITDA does not include such revenue or mobile device 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 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,Mr. Rutledge’s 2023 target annual incentive was prorated to reflect his retirement on November 30, 2023, but 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 2023 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 | ||||||||||||||||||||||||||||||
Christopher L. Winfrey | $1,700,000 | 250 | % | $ | 4,250,000 | 82.35 | % | $ | 3,499,875 | |||||||||||||||||||||||||||||||
Richard J. DiGeronimo | $1,450,000 | 200 | % | $ | 2,900,000 | 82.35 | % | $ | 2,388,150 | |||||||||||||||||||||||||||||||
Jessica M. Fischer | $ 800,000 | 150 | % | $ | 1,200,000 | 82.35 | % | $ | 988,200 | |||||||||||||||||||||||||||||||
Kevin D. Howard | $ 600,000 | 85 | % | $ | 510,000 | 82.35 | % | $ | 419,985 | |||||||||||||||||||||||||||||||
R. Adam Ray | $ 625,000 | 150 | % | $ | 937,500 | 82.35 | % | $ | 772,031 | |||||||||||||||||||||||||||||||
Thomas M. Rutledge | $ | 2,500,000 | 300 | % | $ | 6,270,492 | * | 100.47 | % | $ | 6,299,963 | $1,250,000 | 300 | % | $ | 3,431,507 | (1) | 82.35 | % | $ | 2,825,846 | |||||||||||||||||||
John Bickham | $ | 1,500,000 | 200 | % | $ | 3,000,000 | 100.86 | % | $ | 3,025,800 | ||||||||||||||||||||||||||||||
Richard J. DiGeronimo | $ | 1,000,000 | 160 | % | $ | 1,600,000 | 100.86 | % | $ | 1,613,760 | ||||||||||||||||||||||||||||||
David G. Ellen | $ | 1,250,000 | 160 | % | $ | 2,000,000 | 100.86 | % | $ | 2,017,200 | ||||||||||||||||||||||||||||||
Christopher L. Winfrey | $ | 1,000,000 | 160 | % | $ | 1,600,000 | 100.86 | % | $ | 1,613,760 | ||||||||||||||||||||||||||||||
Represents Mr. Rutledge’s target annual incentive amount |
The CEO is also authorized by the Committee 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. Discretionary bonus awards are recommended by management based upon management’s judgment of a participant’s performance and contribution to the Company, and are in addition to payments made under the Annual Incentive Plan. For 2020, 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 align 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. Since 2016,performance, competitive pay levels observed among peer and general industry organizations, and how such designs align with overall business financial and strategic objectives. In 2023, the Committee has administeredNEOs participated in two long-term incentive program designsprograms established by the Committee: the annual long-term incentive plan and the 2023 Performance Equity Program.
Annual Long-Term Incentive Plan
Under the annual long-term incentive plan, participants receive annual grants of equity in mid-January (the “annual grant date”), delivered in a mix of stock options and RSUs and with the particular mix determined by the participant’s level, vesting in full on the third anniversary of the grant date (i.e., 3-year cliff vesting), and having a 10-year term to exercise stock options. Each year, the Committee determines the long-term incentive opportunities for our NEOs and approves annual equity grants
Charter Communications | 35 | 2024 Proxy Statement
based uponon that opportunity. 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 Charter common stock on the grant date). All NEOs received grants under the 2023 annual long-term incentive plan on the January 17, 2023 annual grant date, based on their corresponding level within Charter.
approved long-term incentive opportunities. The value and mix of the long-term incentive awards for Messrs. Winfrey, DiGeronimo and Rutledge Bickham, Ellenwere as set forth in their employment agreements in effect at that time, with Messrs. Winfrey and Winfrey participateRutledge receiving their awards 100% in the 2016 Performance-based Program.form of stock options and Mr. DiGeronimo and all other NEOs receiving their awards in a mix of 90% stock options and 10% RSUs. The grant details under the annual long-term incentive plan for each NEO are as follows:
2023 Annual Long-Term Incentive Plan Award Details
| Executive Officer | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||
| Christopher L. Winfrey | $17.0 million | 100% Stock Options | $ | 387.375 | 124,922 | — | ||||||||||
| Richard J. DiGeronimo | $10.0 million | 90% Stock Options /10% RSUs | $ | 387.375 | 66,135 | 2,581 | ||||||||||
| Jessica M. Fischer | $ 5.5 million | 90% Stock Options /10% RSUs | $ | 387.375 | 36,374 | 1,420 | ||||||||||
| Kevin D. Howard | $ 1.5 million | 90% Stock Options /10% RSUs | $ | 387.375 | 9,920 | 387 | ||||||||||
| R. Adam Ray | $ 3.0 million | 90% Stock Options /10% RSUs | $ | 387.375 | 19,841 | 774 | ||||||||||
| Thomas M. Rutledge | $15.0 million | 100% Stock Options | $ | 387.375 | 110,225 | — | ||||||||||
For changes to long-term incentive opportunities occurring during the year after the annual grant date, the Committee approvedgenerally 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 changes occurring in the 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. There were no off-cycle equity awards granted under thisthe annual long-term incentive plan in 2023 to any of the NEOs.
2023 Performance Equity Program
In February 2023, the Committee also approved the 2023 Performance Equity Program in consideration of Charter’s commitment to a number of multi-year transformational and industry-leading network expansion and evolution initiatives. Under the program, participants received 5x their annual long-term incentive grant value, less the value already issued in 2016,January 2023 under the annual long-term incentive plan. Awards were delivered in a mix of 90% stock options and 10% restrictedRSUs, subdivided into 18 tranches of stock units. These awards vest subject to the achievementoptions and 12 tranches of pre-established stock price hurdlesRSUs, each with additionala time-based vesting applying over a minimum ofrequirement ranging from 3 to 5 years after grant;the grant date and performance-based vesting requirement in the form of a stock price hurdle. There are a total of six price hurdles under the program, representing between 5% to 20% compound annual stock price growth over a 5-year period, and the achievement of each price hurdle is determined based on the 60-trading day average closing stock price of Charter common stock. In order to vest, both the time and performance vesting criteria for a tranche must be satisfied, and if a stocktranche’s associated price hurdle is not met within 6 years afterachieved by the sixth anniversary of the grant the associated awarddate, that 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 asFurthermore, no awards under the program vest.
For Mr. DiGeronimo,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 Committee determined that he should continue to participate in the Company’s annual equity program for 2020, commensurate with other executivesprice hurdle is satisfied at the same level. This program provides participants an annual long-term incentive award, the value and mixtime of which is based on the executive’s level, delivered in a mix oftermination are eligible to vest. All stock options and restricted stock units that vest fully ongranted under the third anniversary of the date of grant.2023 Performance Equity Program have a 10-year term to exercise.
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Details regarding 2020 equity awards toThe table below summarizes 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 valuesvesting requirements for all grants made under the 2016 Performance-based Program were determined by the Committee using an analysis of potential realizable compensation (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 of stock options and restricted stock units granted 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 mixboth the time and performance-vesting criteria for each tranche must be satisfied in order for the associated tranche to vest.
Vesting Structure of 90% stock options and 10% restricted stock units.2023 Performance Equity Program Awards
Vesting Structure | Price Growth(3) | |||||||||||||||
Approximate(1) % of Stock Options Eligible to Vest | Approximate(1) % of RSUs Eligible to Vest | Price Hurdle Vesting Requirement | Total | 5-Year CAGR | ||||||||||||
On or After 3rd Anniversary of the Grant Date | On or After 4th Anniversary of the Grant Date | On or After 5th Anniversary of the Grant Date | On or After 3rd Anniversary of the Grant Date | On or After 4th the Grant Date | On or After 5th the Grant Date | |||||||||||
6.7% | 6.7% | 6.7% | — | — | — | $507 / $564(2) | 28% / 42% | 5% / 7% | ||||||||
6.7% | 6.7% | 6.7% | — | — | — | $639 | 61% | 10% | ||||||||
6.7% | 6.7% | 6.7% | 11.1% | 11.1% | 11.1% | $798 | 101% | 15% | ||||||||
6.7% | 6.7% | 6.7% | 11.1% | 11.1% | 11.1% | $870 | 119% | 17% | ||||||||
3.3% | 3.3% | 3.3% | 5.6% | 5.6% | 5.6% | $988 | 149% | 20% | ||||||||
3.3% | 3.3% | 3.3% | 5.6% | 5.6% | 5.6% | $1,000 | 152% | 20% | ||||||||
| (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. |
| (3) | Equals stock price growth – both as a total percentage increase and a compound annual growth rate (CAGR) over a 5-year period – relative to Charter’s February 10, 2023 closing stock price of $396.94. |
All NEOs except Mr. Rutledge participated in the 2023 Performance Equity Program. The number of stock options and restrictedRSUs granted to each participant was based upon: (i) the target grant value of the award, (ii) the value per each stock units to be granted were then divided intooption and RSU for each tranche, as calculated by a Monte Carlo model of the value of such awards, and (iii) the 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 inRSUs required to deliver the exhibits below.
Undertargeted grant value such that 90% of 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 astotal combined number of February 26, 2021. As a result, two-thirds of the stock options and RSUs granted was comprised of stock options and 10% of the total combined number of stock options and RSUs granted was comprised of RSUs. Grants under the program have vested. Based2023 Performance Equity Program were made on February 22, 2023, and the achievementgrant details for each NEO were as follows:
2023 Performance Equity Program Award Details
| Executive Officer | Target Award Value | Equity Award Mix | Grant / Strike Price | # of Stock Options Granted | # of RSUs Granted | |||||||||||
| Christopher L. Winfrey | $68.0 million | 90% Stock Options / 10% RSUs | $380.53 | 531,840 | 59,093 | |||||||||||
| Richard J. DiGeronimo | $40.0 million | 90% Stock Options / 10% RSUs | $380.53 | 310,996 | 34,555 | |||||||||||
| Jessica M. Fischer | $22.0 million | 90% Stock Options / 10% RSUs | $380.53 | 171,048 | 19,005 | |||||||||||
| Kevin D. Howard | $ 6.0 million | 90% Stock Options / 10% RSUs | $380.53 | 46,649 | 5,184 | |||||||||||
| R. Adam Ray | $12.0 million | 90% Stock Options / 10% RSUs | $380.53 | 93,299 | 10,366 | |||||||||||
As noted above, all NEOs except for Mr. Rutledge (who, pursuant to the terms of these price targets, and assuming thathis employment agreement, only received an award under 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 withannual long-term incentive plan) received a total market capitalizationtarget award value equal to 5x their annual long-term incentive opportunity from the combined grants under the annual long-term incentive plan and the 2023 Performance Equity Program. Total target award values delivered over the course 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 Period2023 were therefore as follows:
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Proportion of Restricted Stock Units Vesting by Stock Price Hurdle and Time-Based Vesting Period
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| • | Kevin D. Howard - $7.5 million |
| • | R. Adam Ray - $15.0 million |
| • | Thomas M. Rutledge - $15.0 million |
The target award values described above differ from the corresponding values in the Summary Compensation Table and Grants of Plan-Based Awards Table due to: (i) rounding to the nearest whole stock option and RSU when converting award
Charter Communications | 37 | 2024 Proxy Statement
values into a number of stock options and RSUs to be granted, and (ii) variation between the initial Monte Carlo value estimates used to calculate the number of stock options and RSUs to be granted under the 2023 Performance Equity Program and the finalized Monte Carlo values calculated after the grant date for purposes of expensing and disclosing the value of such awards.
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, 13,840,6162023, 5,113,241 million shares remained available for future grants under the 2019 Plan. As of December 31, 2020,2023, there were 3,7785,690 participants in the 2019 Plan and there remained 2,976371 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 2023, Charter amended the employment agreements for Messrs. Winfrey and DiGeronimo effective February 22, 2023, removing references to future annual equity grants and excluding grants under the 2023 Performance Equity Program from the sections of their employment agreements relating to the treatment of certain equity incentive awards upon termination. Charter also entered into amendednew employment agreements with Ms. Fischer and Mr. Rutledge,Ray, with Ms. Fischer’s agreement effective October 27, 2020February 5, 2023 and extending hisMr. Ray’s agreement executed on December 21, 2023 with a January 19, 2024 effective date. The agreements with Ms. Fischer and Mr. Ray renewed the terms of their employment for an additional two years from each agreement’s respective effective date. Ms. Fischer’s prior employment agreement was effective February 5, 2021 with a term through December 31, 2024,February 5, 2023 and Mr. Bickham,Ray’s prior employment agreement was effective December 23, 2020 and extending hisJuly 1, 2022 with a term through December 31, 2022. Messrs. Ellen and Winfrey continue to be covered by theJuly 1, 2024. There were otherwise no new employment agreements that they entered into with an NEO or amendments to existing employment agreements during the Company in 2016, at the time awards were made under the 2016 Performance-based Program.year. 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).
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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 grant date of grant using the Black-Scholes option-pricing model and the fair value of equity awards with market conditions is estimated on the grant 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, 20202023 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
ThePrior to October 1, 2023, Charter’s Compensation Recovery Policy provides(the “Prior Policy”) provided that all executive officers, including the NEOs, as well as all members of Company management with the title of executive vice president, 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 iswas a three-year look back period for compensation recovery and it appliesapplied regardless of whether or not the individual was at fault in the circumstances leading to the restatement. However,In addition, the Prior Policy granted the Committee has been granted greater authority to recover any outstanding equity basedequity-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.
On October 24, 2023, the Committee adopted a new Compensation Recovery Policy (the “New Policy”), which was effective October 1, 2023 (applying to compensation received after such date) and designed to comply with NASDAQ Listing Rule 5608 relating to such policies (with such listing rule itself having been adopted as required by SEC rules adopted pursuant to the Dodd-Frank Act). The New Policy applies to Charter’s executive officers, including the NEOs, and provides for the repayment of certain incentive compensation received over a covered period if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws. The covered period under the New Policy is the three full fiscal years prior to the date the Company is required to prepare an accounting restatement. Compensation subject to recovery is the amount of incentive-based compensation received that exceeds the amount of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts, which would include (i) the portion of bonuses received over the covered period due to the financial misstatement, and (ii) performance-based equity vested over the covered period due to the financial misstatement.
In connection with the adoption of the New Policy, the Committee also approved phasing out the Prior Policy, which continues to apply for executive officers and executive vice presidents subject to the Prior Policy as of September 30, 2023, with only compensation realized prior to October 1, 2023 being subject to recovery under the Prior Policy.
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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 20172023 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%51% of the votes cast in favor of the triennial frequency proposal. The most recentAt this same meeting, the stockholders also considered an advisory vote on executive compensation was held atfor the 2020 annual stockholders’ meeting. AsNEOs and, as the Board of Directors recommended, the stockholders approved the 20202023 executive compensation program with approximately 91%71% of the votes cast voting in favor of the proposal. At the annual stockholder’sstockholders’ meeting in 2023,2026, stockholders will be asked to consider twoan advisory votes relative to executive compensation. One will address the frequency of advisory votesvote on the Company’s executive compensation and the other will address executive compensation as described in the Compensation Discussion and Analysis.
Charter’sCharter designs its 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 values and carefully considers the feedback we receive from our stockholders. In 2020, we engaged in constructive dialogue with our leading institutional stockholders. We reached out to and offered to have discussions with stockholders holding approximately 69.6% of the shares of our outstanding stock. 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. Stockholder feedback, including through direct discussions and prior stockholder votes, is reported to our Nominating and Corporate Governance Committee periodically throughout the year. In addition, the Nominating and Corporate Governance Committee was provided an overview of governance positions of institutional investors that are more proactive on governance matters. 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.
ESG Reporting. Last year 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 the date of the 2021 annual stockholders’ meeting, and the report will include the greenhouse gas target. We will continue to engage internal and external stakeholders in ESG discussions, reviewing the initiatives of other companies, and reviewing the means and opportunities for further carbon emission reductions in the future. The Company also expects to respond to the CDP (formerly the Carbon Disclosure Project) questionnaire for a private score in 2021, the Company’s first year of participation in CDP.
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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 diversity of the board) will be one 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 occurs 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.
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The following table sets forth compensation information for our named executive officers (“NEOs”) that were identified as such as of December 31, 2020.2023.
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 | 2023 | 1,700,000 | — | 8,696,687 | 74,956,650 | 3,499,875 | — | 223,866 | 89,077,078 | |||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
Richard J. DiGeronimo President, Product and Technology | 2023 | 1,450,000 | — | 6,085,226 | 43,139,414 | 2,388,150 | — | 251,010 | 53,313,800 | |||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
Jessica M. Fischer Chief Financial Officer | 2023 | 734,615 | — | 3,347,020 | 23,726,633 | 988,200 | — | 23,188 | 28,819,656 | |||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
Kevin D. Howard EVP, Chief Accounting Officer and Controller | 2023 | 600,000 | — | 912,843 | 6,470,815 | 419,985 | — | 23,646 | 8,427,289 | |||||||||||||||||||||||||||
R. Adam Ray EVP, Chief Commercial Officer | 2023 | 625,000 | — | 1,825,353 | 12,941,899 | 772,031 | — | 25,014 | 16,189,297 | |||||||||||||||||||||||||||
Thomas M. Rutledge Former Executive Chairman | 2023 | 1,250,000 | — | — | 14,999,418 | 2,825,846 | — | 390,357 | 19,465,621 | |||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
| (1) |
|
| (2) | Ms. Fischer received a $250,000 lump sum payment made in connection with her relocation in 2021. |
| (3) | Amounts reported in this column reflect the aggregate grant date fair value of restricted stock unit grants, if any, to each NEO during the applicable fiscal years set forth above. Amounts reported represent the aggregate grant date fair value based on the average of the high and low stock prices on the applicable grant date. For more information on accounting guidance regarding stock compensation, see |
Amounts reported in this column were calculated in accordance with GAAP and reflect the aggregate grant date fair value of options granted to each NEO during the applicable fiscal years set forth above. For more information on accounting guidance regarding stock compensation, see |
The amounts reported under this column for |
|
Charter Communications | 4341 | 20212024 Proxy Statement
The |
Name | Personal Use of Corporate Airplane ($)(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 ($) | Group Life ($) | Executive Long- Term Disability Premiums ($) | Gross-up for Executive Long Term Disability ($) | Other ($) | ||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | ||||||||||||||||||||||||||||||||||||||||||||||||
Richard J. DiGeronimo | ||||||||||||||||||||||||||||||||||||||||||||||||
Jessica M. Fischer | ||||||||||||||||||||||||||||||||||||||||||||||||
Kevin D. Howard | ||||||||||||||||||||||||||||||||||||||||||||||||
R. Adam Ray | ||||||||||||||||||||||||||||||||||||||||||||||||
Thomas M. Rutledge | 259,209 | — | 29,718 | 1,029 | 1,929 | — | ||||||||||||||||||||||||||||||||||||||||||
John Bickham | 285,970 | — | 11,124 | 1,029 | 1,929 | — | ||||||||||||||||||||||||||||||||||||||||||
Rich DiGeronimo | — | 17,100 | 540 | 1,029 | 1,929 | — | ||||||||||||||||||||||||||||||||||||||||||
David Ellen | — | 14,692 | 2,322 | 1,029 | 1,929 | 28 | ||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | 102,269 | 17,100 | 810 | 1,029 | 1,929 | 72 | ||||||||||||||||||||||||||||||||||||||||||
| (a) | As set forth in more detail below under the section titled |
|
Charter Communications | 4442 | 20212024 Proxy Statement
20202023 Grants of Plan Based Awards
Name | Grant Date(1) |
Estimated Future Payouts | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($)(6) | Grant Date Fair Value of Stock and Option Awards ($)(7) | Grant Date(1) |
Estimated Future Payouts | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($)(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) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas M. Rutledge | — | — | 6,270,492 | 9,405,738 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 11/3/2020 | — | — | — | — | 195,022 | 597.16 | 30,005,695 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Bickham | — | — | 3,000,000 | 4,500,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12/23/2020 | — | — | 188,909 | 646.31 | 31,495,475 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rich DiGeronimo | — | — | 1,600,000 | 2,400,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/15/2020 | — | — | — | 781 | — | — | 399,917 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/15/2020 | — | — | — | — | 24,781 | 512.06 | 3,600,060 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David G. Ellen | — | — | 2,000,000 | 3,000,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/15/2020 | — | — | — | 1,465 | — | — | 750,165 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/15/2020 | — | — | — | — | 46,465 | 512.06 | 6,750,203 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Winfrey | — | — | 1,600,000 | 2,400,000 | — | — | — | — | — | — | 4,250,000 | 6,375,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 1/15/2020 | — | — | — | 1,758 | — | — | 900,198 | 1/17/2023 | — | — | — | — | 124,922 | 387.375 | 16,999,386 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1/15/2020 | — | — | — | — | 55,758 | 512.06 | 8,100,243 | 2/22/2023 | — | — | — | — | 531,840 | 380.53 | 57,957,264 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | 59,093 | — | — | 8,696,687 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard J. DiGeronimo | — | — | 2,900,000 | 4,350,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | — | 66,135 | 387.375 | 8,999,651 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | 2,581 | — | — | 999,815 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | — | 310,996 | 380.53 | 34,139,763 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | 34,555 | — | — | 5,085,411 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jessica M. Fischer | — | — | 1,200,000 | 1,800,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | — | 36,374 | 387.375 | 4,949,774 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | 1,420 | — | — | 550,073 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | — | 171,048 | 380.53 | 18,776,859 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | 19,005 | — | — | 2,796,947 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin D. Howard | — | — | 510,000 | 765,000 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | — | 9,920 | 387.375 | 1,349,914 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | 387 | — | — | 149,914 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | — | 46,649 | 380.53 | 5,120,901 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | 5,184 | — | — | 762,929 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Adam Ray | — | — | 937,500 | 1,406,250 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | — | 19,841 | 387.375 | 2,699,963 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | 774 | — | — | 299,828 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | — | 93,299 | 380.53 | 10,241,936 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2023 | — | — | — | 10,366 | — | — | 1,525,525 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas M. Rutledge | — | — | 3,431,507 | 5,147,261 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/17/2023 | — | — | — | — | 110,225 | 387.375 | 14,999,418 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) |
|
| (2) | These columns show the range of payouts under the |
| (3) | Mr. Rutledge’s target annual incentive amount |
Charter Communications | 43 | 2024 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 |
Charter Communications | 4544 | 20212024 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, 2020.2023. In connection with the closing of the Transactions the merger exchange ratio of .90420.9042 was applied to the exercise price and performance targets (divided by .9042)0.9042) and the number of restricted stock units and stock options (multiplied by .9042)0.9042) for all equity awards outstanding on May 18, 2016.
| 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) | |||||||||||||||||||||||||||||||
Thomas M. Rutledge | 147,905 | (2) | — | — | 150.88 | 1/15/2024 | — | — | — | — | ||||||||||||||||||||||||||||||
| 136,188 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | |||||||||||||||||||||||||||||||
| 602,800 | (4) | — | 301,400 | (4) | 222.92 | 4/25/2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| 482,240 | (4) | — | 241,120 | (4) | 232.34 | 4/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 195,022 | (5) | 597.16 | 11/3/2030 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 60,282 | (6) | $ | 39,879,557 | ||||||||||||||||||||||||||||||
John Bickham | 78,364 | (4) | — | 195,910 | (4) | 221.25 | 6/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||
| 18,084 | (4) | — | 45,210 | (4) | 242.30 | 7/25/2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | 188,909 | (7) | — | 646.31 | 12/23/2030 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 26,793 | (6) | $ | 17,724,909 | ||||||||||||||||||||||||||||||
Rich DiGeronimo | — | 23,620 | (8) | — | 353.20 | 1/16/2028 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | 27,151 | (9) | — | 292.31 | 1/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | 6,760 | (10) | — | 378.67 | 8/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | 24,781 | (11) | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | — | 2,542 | (12) | $ | 1,681,660 | — | — | ||||||||||||||||||||||||||||||
David G. Ellen | 164,370 | (4) | — | 135,630 | (4) | 221.25 | 6/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 46,465 | (11) | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 15,072 | (6) | $ | 9,970,882 | ||||||||||||||||||||||||||||||
| — | — | — | — | — | 1,465 | (13) | $ | 969,171 | — | — | ||||||||||||||||||||||||||||||
Christopher L. Winfrey | 36,976 | (2) | — | — | 150.88 | 1/15/2024 | — | — | — | — | ||||||||||||||||||||||||||||||
| 34,046 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | |||||||||||||||||||||||||||||||
| 24,064 | (14) | — | — | 183.87 | 1/15/2026 | — | — | — | — | |||||||||||||||||||||||||||||||
| 331,539 | (4) | — | 165,770 | (4) | 221.25 | 6/17/2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | 55,758 | (11) | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 18,420 | (6) | $ | 12,185,751 | ||||||||||||||||||||||||||||||
| — | — | — | — | — | 1,758 | (13) | $ | 1,163,005 | — | — | ||||||||||||||||||||||||||||||
| 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) | |||||||||||||||||||||||||||||
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 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 124,922 | (12) | — | 387.38 | 1/17/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | 531,840 | (13) | 380.53 | 2/22/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | 1,119 | (14) | 434,933 | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 59,093 | (15) | 22,968,267 | |||||||||||||||||||||||||||||
Richard J. DiGeronimo | 23,620 | (16) | — | — | 353.20 | 1/16/2028 | — | — | — | — | ||||||||||||||||||||||||||||
| 27,151 | (17) | — | — | 292.31 | 1/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||
| 6,760 | (18) | — | — | 378.67 | 8/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||
| 24,781 | (6) | — | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 21,212 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 4,462 | (9) | — | 714.99 | 10/19/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 41,296 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 6,146 | (11) | — | 342.24 | 9/22/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 66,135 | (12) | — | 387.38 | 1/17/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | 310,996 | (13) | 380.53 | 2/22/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | 4,953 | (19) | 1,925,132 | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 34,555 | (15) | 13,430,837 | |||||||||||||||||||||||||||||
Jessica M. Fischer | 5,765 | (17) | — | — | 292.31 | 1/15/2029 | — | — | — | — | ||||||||||||||||||||||||||||
| 3,289 | (6) | — | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 2,815 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 4,610 | (20) | — | 621.71 | 2/5/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 2,231 | (9) | — | 714.99 | 10/19/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 18,067 | (10) | 588.83 | 1/18/2032 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | 36,374 | (12) | — | 387.38 | 1/17/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | 171,048 | (13) | 380.53 | 2/22/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | 2,478 | (21) | 963,149 | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 19,005 | (15) | 7,386,863 | |||||||||||||||||||||||||||||
Kevin D. Howard | 6,131 | (4) | — | — | 183.87 | 1/15/2026 | — | — | — | — | ||||||||||||||||||||||||||||
| 4,371 | (22) | — | — | 299.61 | 1/17/2027 | — | — | — | — | |||||||||||||||||||||||||||||
| 2,058 | (23) | — | — | 340.44 | 4/24/2027 | — | — | — | — | |||||||||||||||||||||||||||||
| 6,495 | (16) | — | — | 353.20 | 1/16/2028 | — | — | — | — | |||||||||||||||||||||||||||||
| 7,467 | (17) | — | — | 292.31 | 1/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||
| 1,593 | (24) | — | — | 289.52 | 1/28/2029 | — | — | — | — | |||||||||||||||||||||||||||||
| 6,195 | (6) | — | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 5,303 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 5,162 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 1,452 | (25) | — | 478.38 | 7/26/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 9,920 | (12) | — | 387.38 | 1/17/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | 46,649 | (13) | 380.53 | 2/22/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | 769 | (26) | 298,894 | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 5,184 | (15) | 2,014,917 | |||||||||||||||||||||||||||||
Charter Communications | 45 | 2024 Proxy Statement
| 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) | |||||||||||||||||||||||||||||
R. Adam Ray |
|
5,015 |
(16) |
|
— |
|
|
— |
|
|
353.20 |
|
|
1/16/2028 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||
| 5,765 | (17) | — | — | 292.31 | 1/15/2029 | — | — | — | — | |||||||||||||||||||||||||||||
| 3,289 | (6) | — | — | 512.06 | 1/15/2030 | — | — | — | — | |||||||||||||||||||||||||||||
| 3,802 | (27) | — | — | 515.62 | 7/1/2030 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 9,280 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 2,570 | (28) | — | 702.13 | 6/23/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 12,905 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 2,602 | (29) | — | 581.19 | 1/19/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 19,841 | (12) | — | 387.38 | 1/17/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | 93,299 | (13) | 380.53 | 2/22/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | 1,645 | (30) | 639,379 | — | — | |||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | 10,366 | (15) | 4,029,057 | |||||||||||||||||||||||||||||
Thomas M. Rutledge | 62,051 | (3) | — | — | 175.76 | 1/15/2025 | — | — | — | — | ||||||||||||||||||||||||||||
| 904,200 | (5) | — | — | 222.92 | 4/25/2026 | — | — | — | — | |||||||||||||||||||||||||||||
| 723,360 | (5) | — | — | 232.34 | 4/26/2026 | — | — | — | — | |||||||||||||||||||||||||||||
| 195,022 | (31) | — | — | 597.16 | 11/3/2030 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 176,770 | (7) | — | 625.55 | 1/15/2031 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 172,067 | (10) | — | 588.83 | 1/18/2032 | — | — | — | — | |||||||||||||||||||||||||||||
| — | 110,225 | (12) | — | 387.38 | 1/17/2033 | — | — | — | — | |||||||||||||||||||||||||||||
| (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. |
| (8) | Amounts shown reflect time-vesting stock options granted on July 15, 2021 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
| (9) | Amounts shown reflect time-vesting stock options granted on October 19, 2021 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
| (10) | Amounts shown reflect time-vesting stock options granted on January 18, 2022 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
| (11) | Amounts shown reflect time-vesting stock options granted on September 22, 2022 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
| (12) | Amounts shown reflect time-vesting stock options granted on January 17, 2023 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
Charter Communications | 46 | 20212024 Proxy Statement
Amounts shown reflect grants of performance-vesting |
Amounts shown reflect time-vesting |
Amounts shown reflect grants of performance-vesting RSUs granted on February 22, 2023 that vest subject to achievement of certain price per share thresholds measured based on the average of the per share closing price of the Company’s Class A common stock on the NASDAQ Global Select for sixty (60) consecutive trading days. |
| (16) | Amounts shown reflect time-vesting stock options granted on January 16, 2018 under the 2009 Stock Incentive Plan that fully |
Amounts shown reflect time-vesting stock options granted on January 15, 2019 under the 2009 Stock Incentive Plan that fully |
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. |
| (19) | Amounts shown reflect time-vesting RSUs granted January 15, 2021, October 19, 2021, January 18, 2022, September 22, 2022 and January 17, 2023 under the 2019 Stock Incentive Plan that fully vest on the third anniversary of the grant date. |
| (20) | 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. |
Amounts shown reflect time-vesting RSUs granted on January 15, 2021, February 5, 2021, October 19, 2021, January 18, 2022 and January 17, 2023 under the 2019 Stock Incentive Plan that fully vest on the third anniversary of the grant date. |
| (22) | Amounts shown reflect time-vesting stock options granted on January |
| (23) | Amounts shown reflect time-vesting stock options granted on April 24, 2017 under the 2019 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
| (24) | Amounts shown reflect time-vesting stock options granted on January 28, 2019 under the 2019 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
| (25) | Amounts shown reflect time-vesting stock options granted on July 26, 2022 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
Amounts shown reflect time-vesting RSUs granted on January |
Amounts shown reflect time-vesting stock options granted on July 1, 2020 under the 2019 Stock Incentive Plan that fully vested and became exercisable on the third anniversary of the grant date. |
| (28) | Amounts shown reflect time-vesting stock options granted on June 23, 2021 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
| (29) | Amounts shown reflect time-vesting stock options granted on January 19, 2022 under the 2019 Stock Incentive Plan that fully vest and become exercisable on the third anniversary of the grant date. |
| (30) | Amounts shown reflect time-vesting RSUs granted on January 15, |
Amounts shown reflect time-vesting stock options granted on |
Charter Communications | 47 | 20212024 Proxy Statement
20202023 Options Exercised and Stock Vested
The following table provides information on option awards exercised and restricted stock and stock unit awards that vested during 20202023 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(2) | — | — | 1,758 | 680,030 | ||||||||||||||
Richard J. DiGeronimo(3) | — | — | 781 | 302,106 | ||||||||||||||
Jessica M. Fischer(4) | — | — | 311 | 120,301 | ||||||||||||||
Kevin D. Howard(5) | — | — | 195 | 75,430 | ||||||||||||||
R. Adam Ray(6) | — | — | 419 | 159,931 | ||||||||||||||
Thomas M. Rutledge(7) | 222,042 | 57,435,134 | — | — | ||||||||||||||
| (1) | Amount attributed to the average high and low market values of the stock on the day of vesting. |
| (2) |
|
| (3) |
|
| (4) |
|
| (5) | Mr. |
Charter Communications | 48 | 2021 Proxy Statement
|
| (6) | Mr. Ray had 311 time vesting RSUs vest on January 13, 2023 and 112 shares were withheld to cover taxes at a market value of $386.82 (the average of the high and low trading prices on that day). Mr. Ray had 108 time vesting RSUs vest on June 30, 2023 and 34 shares were withheld to cover taxes at a market value of $366.94 (the average of the high and low trading prices on that day). |
| (7) | Mr. Rutledge exercised 147,905 shares that were set to expire on January 15, 2024 on a net exercise basis at an exercise price of $150.88 per option on November 14, 2023 at a market value of $417.855 with 97,197 shares withheld to cover the exercise price and taxes. Mr. Rutledge exercised 74,137 shares that were set to expire on January 15, 2025 on a net exercise basis at an exercise price of $175.76 per option on November 14, 2023 at a market value of $417.855 with 51,089 shares withheld to cover the exercise price and taxes. |
Retirement Benefits
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, the present value of2023, Mr. Rutledge’s and Mr. Bickham’sRutledge no longer had an accrued benefit under the Pension PlansPlan as it was $1,624,327, and $1,481,437, respectively, 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, valued as if paid as a life annuity, (b) 28.58 and 8.75 years, respectively, of benefit service to Legacy TWC during their tenure there, and (c) are consistent with the assumptions usedout in the calculationsum of $1,535,429 on December 8, 2023 in connection with Mr. Rutledge’s retirement as Executive Chairman of the Company’s benefit obligations as disclosed in Note 22 to the audited consolidated financial statementsBoard of Directors of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.effective November 30, 2023.
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
Charter Communications | 48 | 2024 Proxy Statement
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 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 payments made during the last fiscal year to Mr. Rutledge. Number of years of credited service and the present value of Mr. Rutledge’s and Mr. Bickham’s accumulated benefit under the Pension Plans computedare not shown as of December 31, 2020, the pension plan measurement date used for financial statement reporting purposes2023 because Mr. Rutledge received a lump sum distribution of his entire accrued benefit in the Company’s audited consolidated financial statements foramount of $1,535,429 on December 8, 2023 in connection with his retirement as Executive Chairman of the year ended December 31, 2020.Board of Directors of the Company effective November 30, 2023.
Name | 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 | ||||||
| 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 | ||||||||
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | Payments During Last Fiscal Year(1) | ||||||||||
Thomas M. Rutledge | Time Warner Cable Pension Plan | — | — | $1,535,429 | ||||||||||
| (1) |
|
Charter Communications | 50 | 2021 Proxy Statement
|
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 Rutledge Agreement has a term ending December 31, 2024 and provides that Mr. Rutledge will serve as the Chairman of the Charter board of directors and Chief Executive Officer of Charter and will have duties commensurate with such positions. Under the Rutledge Agreement, Mr. Rutledge is to receive a current base salary of $2,500,000 during the term commencing October 27, 2020, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Mr. Rutledge is eligible to participate in the Executive Bonus Plan with a target bonus equal to 300% of base salary. 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 125 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.
John Bickham
Effective as of January 1, 2021, Charter entered into an amended and restated employment agreement with John Bickham (the “Bickham Agreement”). The BickhamWinfrey 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 andeffective 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, 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 (the “DiGeronimo Agreement”). The DiGeronimo Agreement provides that Mr. DiGeronimo shall beWinfrey became employed in an executive capacity as President and Chief Product and TechnologyExecutive Officer with such responsibilities, duties and authority as are customary for such role, at a base salary of $1,000,000at least $1,700,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. Pursuant to the Winfrey Agreement, Mr. Winfrey was appointed as a member of the Board of Directors effective November 30, 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. 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
Charter Communications | 49 | 2024 Proxy Statement
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.
Richard J. DiGeronimo
Effective as of September 20, 2022, Charter and Mr. DiGeronimo entered into an employment agreement which was amended effective as of February 22, 2023 (collectively, the “DiGeronimo Agreement”). The DiGeronimo Agreement provides that effective December 1, 2022, Mr. DiGeronimo became employed in an executive capacity as President, Product and Technology with such responsibilities, duties and authority as are customary for such role, at a base salary of $1,450,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. 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. 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. The DiGeronimo Agreement has an initial term from the effective date through July 1, 2022 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 | 51 | 2021 Proxy Statement
David G. Ellen
Effective as of July 1, 2016, Charter entered into an employment agreement with David G. Ellen (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 following business and corporate functions: Programming, Policy (in partnership with Government Affairs), Spectrum Networks (including RSNs and the local news 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. 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. EllenDiGeronimo is entitled to use Company aircraft for such travel and for up to 3040 hours of discretionary personal use per calendar year (without carryover). The EllenDiGeronimo 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 DiGeronimo 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. She 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.
Kevin D. Howard
Effective as of July 26, 2022, Charter and Mr. Winfrey receivedHoward entered into an annualemployment agreement (the “Howard Agreement”). The Howard Agreement provides that Mr. Howard shall be employed in an executive capacity as Executive Vice President, Chief Accounting Officer and Controller with such responsibilities, duties and authority as are customary for such role, at a base salary of $600,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. The Howard Agreement provides that Mr. Howard is eligible to participate in 2019 to $1,000,000 and an increase in histhe Executive Bonus Plan with a target bonus to 160%of 85% of his annual base salary. 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. WinfreyHoward for all reasonable and necessary expenses incurred in connection with the performance of his duties. The WinfreyHoward Agreement has an initial term from the effective date through May 18, 2021July 26, 2024 provided that the term can be extended by the Company for unlimited one-year periods. The WinfreyHoward Agreement contains a two-year non-compete provision and a oneone-year non-solicitation clause.
R. Adam Ray
Effective as of January 19, 2024, Charter and Mr. Ray entered into an employment agreement (the “Ray Agreement”). The Ray Agreement provides that Mr. Ray shall be employed in an executive capacity as Executive Vice President, Chief Commercial Officer with such responsibilities, duties and authority as are customary for such role, at a base salary of $725,000 per year during the term, subject to annual review and, in its discretion, increase by the Compensation and Benefits Committee. The Ray Agreement provides that Mr. Ray is eligible to participate in the Executive Bonus Plan with a target bonus of 150% of his annual base salary. 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. Ray for all reasonable and necessary expenses incurred in connection with
Charter Communications | 50 | 2024 Proxy Statement
the performance of his duties. The Ray Agreement has an initial term from the effective date through January 19, 2026 provided that the term can be extended by the Company for unlimited one-year periods. The Ray Agreement contains a two-year non-compete provision and a one-year non-solicitation clause.
On September 20, 2022, Charter and Mr. Rutledge entered into an amended and restated employment agreement (the “Rutledge Agreement”). The Rutledge Agreement had a term ending November 30, 2023. Effective November 30, 2023, Mr. Rutledge transitioned from Executive Chairman to the role of director emeritus of the Board of Directors. Under the Rutledge Agreement, Mr. Rutledge’s base salary was $1,250,000 effective December 1, 2022, in connection with his transition to the role of Executive Chairman. The Rutledge Agreement also provided for continued eligibility to participate in the Executive Bonus Plan with a target bonus equal to 300% of his base salary. Mr. Rutledge was also eligible to participate in other employee benefit plans, programs and arrangements available to other senior executives through November 30, 2023. In addition, Charter had to reimburse Mr. Rutledge for all reasonable and necessary expenses incurred in connection with the performance of his duties, and Mr. Rutledge was entitled to use Company aircraft for such travel and for commuting and up to 65 hours of discretionary personal use per calendar year (without carryover). The Rutledge Agreement contained a two-year non-compete provision and a two-year non-solicitation clause, which will expire on November 30, 2025.
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$388.68 per share, the closing price of Charter’s Class A common stock on the NASDAQ Global Select Market on December 31, 2020.29, 2023. The paragraphs that follow describe the payments that each NEO would have received assuming the applicable termination event occurred on December 31, 2020.2023. Mr. Rutledge, whose employment with Charter ended on November 30, 2023 in connection with the expiration of his employment agreement, is only included in the section pertaining to such a termination; for sections relating to other termination events, all references to NEOs exclude Mr. Rutledge. 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 | 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
Charter Communications | 51 | 2024 Proxy Statement
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 2023 Executive Bonus Plan for a termination occurring on December 31, 2023. 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, willwould 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 Mr. 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 Mr. 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, Howard and Ray, “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 ($)(4) | Total ($) | ||||||||||||||||
Christopher L. Winfrey | — | 4,250,000 | — | — | 4,250,000 | |||||||||||||||
Richard J. DiGeronimo | — | 2,900,000 | — | — | 2,900,000 | |||||||||||||||
Jessica M. Fischer | — | 1,200,000 | — | — | 1,200,000 | |||||||||||||||
Kevin D. Howard | — | 510,000 | — | — | 510,000 | |||||||||||||||
R. Adam Ray | — | 937,500 | — | — | 937,500 | |||||||||||||||
| (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 2023 Executive Bonus Plan, which would be earned but unpaid for all NEOs upon a termination on December 31, 2023; 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. |
| (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. |
| (4) | Upon a termination by Charter for cause or a voluntary resignation by the executive without good reason, all unvested restricted stock unit grants made to our NEOs will be forfeited and cancelled. |
Termination in Connection with Expiration of Term
Under the employment agreements, equity award agreements and Company policies applicable to our NEOs, we may be required to make certain payments to, or allow pro rata or continued equity vesting for, Messrs. Winfrey, DiGeronimo and Rutledge if they are terminated in connection with the expiration of the term of their employment agreements. Unless their respective employment agreement is otherwise renewed or extended, Mr. Winfrey’s employment will terminate immediately upon the expiration of the term of the agreement on December 1, 2025, and Mr. DiGeronimo may terminate his employment for any reason within thirty (30) days following the expiration of the term of his employment agreement on December 1, 2025. In each case, no severance is payable to Messrs. Winfrey and DiGeronimo, but they are entitled to a pro rata bonus in the year
Charter Communications | 52 | 2024 Proxy Statement
of termination. In addition, Mr. Winfrey’s stock options granted on or after September 22, 2022 and pursuant to his employment agreement would continue to vest and such stock options would remain exercisable through their original expiration date. Any unvested performance-vesting stock options and RSUs granted to him on February 22, 2023 would remain outstanding and eligible to vest through the second anniversary of the date of termination, contingent upon the applicable time and performance-vesting criteria of such awards being satisfied during that time, and any performance-vesting stock options vested as of the date of termination will remain exercisable for 12 months following such date and performance-vesting stock options vesting after the date of termination will remain exercisable for 12 months following the date of vesting, but in no event will any such option remain exercisable past the original expiration date. Mr. DiGeronimo’s stock options and RSUs granted on or after September 22, 2022 and pursuant to his employment agreement would pro rata vest and such vested stock options would remain exercisable until the fifth anniversary of the date of his termination, or the original expiration date, if earlier. Any unvested performance-vesting stock options granted to him on February 22, 2023 would be forfeited. Mr. Rutledge’s employment terminated upon the expiration of his employment agreement on November 30, 2023, and he was entitled to the amounts set forth in the table below and descried in the corresponding footnotes. As the respective terms for Messrs. Winfrey and DiGeronimo’s employment agreements expire after 2024, no payment or benefit amounts would apply as of December 31, 2023 and they are therefore not included in the table below.
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($) | Total ($) | ||||||||||||||||
Thomas M. Rutledge | — | 3,431,507 | 1,405,920 | — | 4,837,427 | |||||||||||||||
| (1) | No severance is payable in the event of a termination in connection with the expiration of the term of an employment agreement. |
| (2) | “Bonus” is the bonus payable under the 2023 Executive Bonus Plan. Mr. Rutledge is entitled to a pro rata bonus in the year of termination if terminated in connection with the expiration of the term of his employment agreement as described above. The bonus amount for Mr. Rutledge is prorated based on his November 30, 2023 termination date. |
| (3) | All of Mr. Rutledge’s stock options granted pursuant to his employment agreement continue to vest following his termination on November 30, 2023, will remain exercisable through the original expiration date, and are valued in the table above at the November 30, 2023 closing stock price of $400.13. |
Termination due to Death or Disability
Under the current employment agreements, equity award agreements and Company policies, as applicable, for each of our NEOs, we may be required to make certain payments to, or allow full equity vesting for, these executives or their estates or beneficiaries in the event that the executive is terminated as a result of death or “disability.” Under the equity award agreements with our NEOs, vested stock options generally may be exercised for a period of eighteen months following a termination due to death or disability, or through the original expiration date, if earlier.
An executive is deemed to have a “disability” if, due to illness or injury: the executive is unable to perform his or her duties without accommodation for a certain period of time; or the executive is considered disabled for the purposes of receiving long term disability benefits under a participating plan or policy. In the event there is a period of time during which aan NEO is not being paid annual base salary and not receiving long-term disability insurance payments, the executive will receive interim payments equal to such unpaid disability insurance payments until commencement of disability insurance payments.
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Severance ($)(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 ($) | ||||||||||||||||
Christopher L. Winfrey | — | 4,250,000 | 955,979 | 434,933 | 5,640,912 | |||||||||||||||
Richard J. DiGeronimo | — | 2,900,000 | 371,757 | 1,925,132 | 5,196,889 | |||||||||||||||
Jessica M. Fischer | — | 1,200,000 | 47,468 | 963,149 | 2,210,617 | |||||||||||||||
Kevin D. Howard | — | 510,000 | 12,946 | 298,895 | 821,841 | |||||||||||||||
R. Adam Ray | — | 937,500 | 25,893 | 639,379 | 1,602,772 | |||||||||||||||
| (1) | No severance is payable in the event of a termination based on death or disability of any |
Charter Communications | 53 | 2024 Proxy Statement
| (2) | “Bonus” is the |
|
| (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. Of70 (with a minimum of 5 years of service required for grants made in or after 2021). Under the current employment agreements, equity award agreements and Company policies applicable to our NEOs, only Mr. Rutledge and Mr. Bickham meetin the “rule of 70”event that an NEO terminates his or employment with Charter due to retirement, qualification, however, neither of them hadno severance is payable to any time-vesting awardsNEO but each NEO 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 a bonus under the 2023 Executive Bonus Plan for a termination occurring on December 31, 2020 that would qualify for2023. In addition, time-vesting stock option and RSU grants made prior to 2021 are subject to pro rata vesting.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, for grants made in or after 2021, unvested time-vesting stock option and RSU 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. Unvested performance-vesting stock option and RSU grants made on February 22, 2023 would be forfeited and cancelled as of the date of termination. For a retirement at or above age 60, all vested time-vesting and performance-vesting stock option awards remain exercisable for five years after the termination date or, in the case of stock options that continue to vest, the vesting date, but in no event will stock options remain exercisable beyond the original expiration date. For a retirement at or above age 55 but below age 60, stock options remain exercisable for three years after the termination date or through the original expiration date, if earlier. None of the other NEOs were eligible for retirement atas of December 31, 2020.2023.
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 termination without cause or resignation for good reason, or through the original expiration date, if earlier.
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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. Winfrey, DiGeronimo, Howard and Ray); any change in reporting structure such that the executive no longer reports directly to the Board (for Mr. Winfrey); or any failure by a successor company to assume the executive’s employment agreement following a change in control.
Charter Communications | 54 | 2024 Proxy Statement
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 ($)(3) | Restricted Stoc kand Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Christopher L. Winfrey | 14,875,000 | 4,250,000 | 388,190 | 418,649 | 19,931,839 | |||||||||||||||
Richard J. DiGeronimo | 8,700,000 | 2,900,000 | 148,512 | 985,097 | 12,733,609 | |||||||||||||||
Jessica M. Fischer | 3,700,000 | 1,200,000 | 15,072 | 495,172 | 5,410,244 | |||||||||||||||
Kevin D. Howard | 2,220,000 | 510,000 | 4,110 | 161,667 | 2,895,777 | |||||||||||||||
R. Adam Ray | 3,125,000 | 937,500 | 8,221 | 357,988 | 4,428,709 | |||||||||||||||
| (1) | All NEOs as of December 31, 2023 are entitled to severance in accordance with the terms and conditions of each executive’s respective employment agreement with the Company or the Company’s policies, as applicable. |
| (2) |
|
| (3) |
|
| (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.
For a definition of “for cause,” see the prior section titled “Termination by Charter for Cause or a Voluntary Termination by the Executive without Good Reason.”
For a definition of “good reason”, see the prior section titled “Termination by the Company without Cause or by the Executive for Good Reason (other than for a Change in Control)”.
Charter Communications | 55 | 2024 Proxy Statement
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 | |||||||||||||||
Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Total ($) | ||||||||||||||||
Christopher L. Winfrey | 14,875,000 | 4,250,000 | 955,979 | 434,933 | 20,515,912 | |||||||||||||||
Richard J. DiGeronimo | 8,700,000 | 2,900,000 | 371,757 | 1,925,132 | 13,896,889 | |||||||||||||||
Jessica M. Fischer | 3,700,000 | 1,200,000 | 47,468 | 963,149 | 5,910,617 | |||||||||||||||
Kevin D. Howard | 2,220,000 | 510,000 | 12,946 | 298,895 | 3,041,841 | |||||||||||||||
R. Adam Ray | 3,125,000 | 937,500 | 25,893 | 639,379 | 4,727,772 | |||||||||||||||
| (1) | All NEOs as of December 31, 2023 are entitled to severance in accordance with the terms and conditions of each executive’s respective employment agreement with the Company or the Company’s policies, as applicable. |
| (2) |
|
| (3) | All unvested time-vesting stock option grants made to our NEOs are subject to full |
| (4) | All unvested time-vesting |
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 | 5756 | 20212024 Proxy Statement
Charter Class A Common Stock
The following table sets forth information as of February 26, 202123, 2024 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, director nominee 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 | 46,056,001 | 28.56 | % | |||||
Advance/Newhouse Partnership(3) One World Trade Center, 44th Floor New York, NY 10007 | 20,029,687 | 12.42 | % | |||||
Dodge & Cox(4) 555 California Street, 40th Floor San Francisco, CA 94104 | 8,399,842 | 5.21 | % | |||||
The Vanguard Group(5) 100 Vanguard Blvd. Malvern, PA 19355 | 8,251,684 | 5.12 | % | |||||
Directors and Executive Officers: | ||||||||
W. Lance Conn(6) | 6,194 | * | ||||||
Kim C. Goodman(7) | 5,388 | * | ||||||
Craig A. Jacobson(8) | 10,249 | * | ||||||
Gregory B. Maffei(9) | 6,379 | * | ||||||
John D. Markley, Jr.(10) | 15,629 | * | ||||||
David C. Merritt(11) | 9,918 | * | ||||||
James E. Meyer(12) | 2,619 | * | ||||||
Steven A. Miron(13) | 10,144 | * | ||||||
Balan Nair(14) | 7,023 | * | ||||||
Michael A. Newhouse(15) | 3,835 | * | ||||||
Mauricio Ramos(16) | 6,223 | * | ||||||
Thomas M. Rutledge(17) | 2,290,883 | 1.42 | % | |||||
Carolyn J. Slaski | — | * | ||||||
Eric L. Zinterhofer(18) | 48,327 | * | ||||||
Christopher L. Winfrey(19) | 848,258 | * | ||||||
Richard J. DiGeronimo(20) | 109,331 | * | ||||||
Jessica M. Fischer(21) | 17,669 | * | ||||||
Kevin D. Howard(22) | 44,462 | * | ||||||
R. Adam Ray(23) | 27,911 | * | ||||||
All executive officers and directors as a group (18 persons) (24) | 1,179,559 | 0.73 | % | |||||
| * | less than 1% |
Charter Communications | 57 | 2024 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 | 58 | 2024 Proxy Statement
the basis that he is not, individually, a party to any agreement, arrangement or understanding relating to the voting or disposition of any such shares. Decisions with respect to the voting or disposition of any Charter shares owned by Liberty Broadband are made by Liberty Broadband’s |
| (3) | Based on a Schedule 13D/A, Amendment No. |
| (4) | Based on a Schedule 13G/A filed by |
| (5) |
|
| (6) | Includes |
| (7) | Includes |
| (8) | Includes 971 shares of restricted stock that are not yet vested but eligible to be voted. |
| (9) | Includes 971 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 |
| (18) | Includes 1,426 shares of restricted stock that are not yet vested but eligible to be voted. |
| (19) | Includes |
|
Charter Communications | 59 | 2024 Proxy Statement
Revocable Trust; (iii) |
| (20) | Includes 103,524 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 | 60 | 20212024 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 TransactionTransactions 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 TransactionTransactions Policy.
The following sets forth certain transactions in which we are involved and in which the directors,a director, executive officers and affiliatesofficer or other Related Party 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 designated 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 Chairman of the board of Charter.
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 2023, 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$156 million to A/N as tax distributions under the LLC agreementAgreement and $607,000$14 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 | 61 | 2021 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
Charter Communications | 61 | 2024 Proxy Statement
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% ofa 48.9% 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 6.6% 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. Maffei owns approximately 0.4 million shares of the Series A common stock and approximately 9.6 million shares of the Series B common stock of Qurate and has a 40.9%20.1% 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, 2020,2023, the Company recorded revenue in aggregate of approximately $50.0$47.0 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 20202023 or may involve amounts in excess of $120,000 for 2021.2024. 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 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 48.8% voting interest in Liberty Media, which owns 30.29% of the Live Nation equity) is a customer of Spectrum Enterprise and Spectrum Reach and purchased approximately $2.0 million of services during 2023. |
Charter Communications | 62 | 2024 Proxy Statement
Proposal No. 2: Increase the Number of Shares in the Company’s 2019 Stock Incentive Plan
(Item 2 on Proxy Card)
Our Board of Directors recommends that stockholders approve an amendment to the 2019 Plan (the “Plan Amendment”) to increase the number of shares of Class A common stock available for issuance under the 2019 Plan by 7.0 million shares. The Board adopted the Plan Amendment on January 30, 2024 upon recommendation of the Board;Compensation and Dr. Malone has a 47.9% voting interest in Liberty Media, which owns 32.36%Benefits Committee. The Plan Amendment will only become effective if approved by stockholders at the annual meeting. If approved, the effective date of the Live Nation equity) is a customerPlan Amendment will be April 23, 2024.
The 2019 Plan was approved by shareholders on April 23, 2019 with an initial share authorization of Spectrum Enterprise and Spectrum Reach and purchased16.0 million shares. Over the approximately $151,000 of services during 2020.
Balan Nair isfive-year period from adoption through January 31, 2024, the President and Chief Executive Officer of Liberty Latin America (“LLA”). In 2020, Charter entered into an agreement with LLA under which Charter would sell certain excess equipment of a type Charter no longer re-employs to LLA over a three-year period with aggregate proceedsCompany made awards of approximately $1.7 million.14.2 million shares under the 2019 Plan. Of these awards, approximately 0.8 million shares have been forfeited or cancelled and approximately 0.3 million shares have been withheld for payment of taxes and exercise prices, leading to approximately 2.9 million shares remaining for future awards. See “Long-Term Incentives” in the Compensation Discussion and Analysis, above, for a description of the 2019 Plan and awards made under the 2019 Plan.
Our long-term incentive award compensation program is designed to recognize scope of responsibilities, reward demonstrated performance and leadership, motivate future superior performance, align the interests of our executives with that of our stockholders, and incentivize and retain our executives through the term of the awards. We believe that performance-based incentives help to drive our performance through their direct linkage to controllable business results while, at the same time, rewarding executives for the value created through stock price appreciation. Approval of the Plan Amendment would allow the Compensation and Benefits Committee to continue making awards to participants as the Committee deems appropriate. The 2,871,620 million shares currently available for future grant under the 2019 Plan represents approximately 1.6% of the Company’s outstanding shares on a fully diluted basis. Approval of the Plan Amendment would result in the Company having 9,871,620 million shares available for future grants under the 2019 Plan, representing approximately 5.5% of the Company’s outstanding shares on a fully diluted basis.
If the Plan Amendment is approved by stockholders, we intend to file with the SEC a registration statement on Form S-8 to register the increased number of shares issuable under the 2019 Plan pursuant to the Plan Amendment.
Material Terms of the 2019 Plan
The following summary of the material terms of the 2019 Plan, as amended by the Plan Amendment, is qualified in its entirety by the full text of the 2019 Plan, a copy of which is filed with our Annual Report on Form 10-K for the year ended December 31, 2023, as amended by the Plan Amendment, a copy of which is attached to this Proxy Statement as Appendix B. You also may obtain a copy of the 2019 Plan, as amended, free of charge, by writing to the Company, 400 Washington Boulevard, Stamford, CT 06902, Attention: Investor Relations.
Effective Date; Duration of the 2019 Plan
The 2019 Plan became effective upon approval by the Company’s stockholders on April 23, 2019 and no awards were granted under the 2019 Plan prior to such approval. Except with respect to awards then outstanding, unless sooner terminated, the 2019 Plan will expire on January 29, 2029, the tenth anniversary of the date it was adopted by the Board, and no further awards may be granted after such date.
2019 Plan Administration
The 2019 Plan is administered by the Compensation and Benefits Committee or, in the Board’s discretion, by the Board. The Compensation and Benefits Committee has the authority to, among other things, interpret the 2019 Plan, determine who will be granted awards under the 2019 Plan, prescribe the terms and conditions of each award, interpret, administer, reconcile any inconsistency in, correct any defect in and supply any omission in the 2019 Plan, and exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the 2019 Plan.
Charter Communications | 6263 | 20212024 Proxy Statement
Eligibility
The Board in its discretion selects participants from among the employees, consultants and directors of the Company and its affiliates and other individuals designated by the Compensation and Benefits Committee who are reasonably expected to become employees, consultants and directors and who, in such capacities, are reasonably expected by the Board to contribute to the Company’s success. Only employees are eligible to receive incentive stock options. Approximately 101,300 employees, twelve non-employee directors and two non-employee director emeriti, and 6,600 consultants are eligible to participate in the 2019 Plan as of January 31, 2024, however, historically the Company has limited awards to a select number of individuals. For example, as of January 31, 2024, only 5,660 eligible persons held awards issued under the 2019 Plan. We do not currently anticipate granting any awards under the 2019 Plan to independent contractors of our Company.
Shares Available for Awards; Limits on Awards
The Company initially reserved an aggregate of 16.0 million shares of Class A common stock to be awarded under the 2019 Plan (the “Initial Share Reserve”) at the time of its adoption, and upon approval the Plan Amendment would reserve an additional 7.0 million shares of Class A common stock to be awarded under the 2019 Plan (the “Additional Share Authorization”). Both the Initial Share Reserve and Additional Share Authorization were determined after reviewing the comprehensive assessment of our annual executive compensation program relative to our peer groups and broader industry data prepared by Semler Brossy, which included advice regarding the design of the executive compensation program and the reasonableness of individual compensation targets and awards. The Initial Share Reserve was intended to be sufficient to cover awards granted over a five-year period through the annual grants in January 2024, and the Additional Share Authorization is intended to cover the remaining five-year period through the January 29, 2029 expiration date of the 2019 Plan. Following the Additional Share Authorization, up to 23.0 million of shares (the “Total Share Reserve”) could be issued under the 2019 Plan, in the aggregate, through the exercise of incentive stock options. No non-employee director or director emeritus may be granted awards under the 2019 Plan, during any fiscal year, that have a total value that exceeds $3.0 million (calculating the value of any awards based on the grant date fair value for financial reporting purposes).
If any outstanding award expires or is canceled, forfeited, or terminated without issuance of the full number of shares of common stock to which the award related, then the number of shares available under the 2019 Plan is increased by the portion of the award that expired, or was canceled, forfeited or terminated. Shares tendered in payment of the option exercise price or delivered or withheld by the Company to satisfy any tax withholding obligation, or shares covered by a stock-settled stock appreciation right or other awards that were not issued upon the settlement of the award also again become available for future grants under the 2019 Plan. Awards may be granted under the 2019 Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines. The Compensation and Benefits Committee may make appropriate adjustments to these limits to prevent dilution or enlargement of the rights of participants under the 2019 Plan (see Adjustments Upon Changes in Stock).
Available Awards
Awards that may be granted under the 2019 Plan include stock options (including both incentive stock options (ISOs) and nonqualified stock options), stock appreciation rights (SARs), dividend equivalent rights, restricted stock, restricted stock units (RSUs), performance awards and other stock-based awards. The terms of each award will be set forth in a written agreement.
Stock Options
A stock option is the right to purchase shares of Class A common stock at a future date at a specified price per share called the exercise price. An option may be either an ISO or a nonqualified stock option. ISOs and nonqualified stock options are taxed differently, as described under Federal Income Tax Treatment of Awards Under the 2019 Plan. Except in the case of options granted pursuant to an assumption or substitution for another option, the exercise price of a stock option may not be less than the fair market value (or in the case of an ISO granted to a ten percent stockholder, 110% of the fair market value) of a share of common stock on the grant date. Full payment of the exercise price must be made at the time of such exercise in cash, shares of Class A common stock, withholding of shares of Class A common stock deliverable upon exercise or in another manner approved by the Compensation and Benefits Committee. No stock option may be exercisable for a period of more than ten (10) years following the grant date of the stock option (or in the case of an ISO granted to a ten percent stockholder, for a period of more than five (5) years following the grant date). As of January 31, 2024, 10,128,003 options have been granted under the Plan.
Charter Communications | 64 | 2024 Proxy Statement
A SAR is the right to receive payment of an amount equal to the excess of the fair market value of a share of common stock on the date of exercise of the SAR over the exercise price. The exercise price of a SAR may not be less than the fair market value of a share of common stock on the grant date. SARs may be granted alone (“freestanding rights”) or in tandem with options (“related rights”).
Dividend Equivalent Rights
Dividend Equivalent Rights represent the right to receive all or some portion of the dividends that are or would be payable with respect to shares of Class A common stock, payable in either cash or shares of Class A common stock.
Restricted Stock
A restricted stock award is an award of actual shares of common stock which are subject to certain restrictions for a period of time determined by the Compensation and Benefits Committee. Restricted stock may be held by the Company in escrow or delivered to the participant pending the release of the restrictions. The participant generally has the rights and privileges of a stockholder as to such restricted stock during the restricted period, including the right to vote the restricted stock and the right to receive dividends.
Restricted Stock Units
An RSU is an award of hypothetical common stock units having a value equal to the fair market value of an identical number of shares of common stock, which are subject to certain restrictions for a period of time determined by the Compensation and Benefits Committee. No shares of common stock are issued at the time an RSU is granted, and the Company is not required to set aside any funds for the payment of any RSU award. Prior to settlement of an RSU award and the receipt of shares, the participant does not have any rights as a stockholder with respect to such shares. The Compensation and Benefits Committee may grant RSUs with a deferral feature, whereby settlement of the RSU is deferred beyond the vesting date until a future payment date or event set out in the participant’s award agreement. The Compensation and Benefits Committee has the discretion to credit RSUs with dividend equivalents.
Performance Awards
A performance award is an award that is only earned if certain conditions are met. Performance awards may be denominated in shares of Class A common stock or in cash. The Compensation and Benefits Committee has the discretion to determine: the number of shares of common stock or stock-denominated units subject to a performance share award; the applicable performance period; the conditions that must be satisfied for a participant to earn an award; and the other terms, conditions and restrictions of the award. Whether a participant earns all or a portion of a performance award depends on the extent to which the performance goals established by the Compensation and Benefits Committee are attained within the applicable performance period. The Compensation and Benefits Committee has the discretion to determine whether the performance award is paid in shares of Class A common stock, cash or a combination of both.
Other Stock-Based Awards
The Compensation and Benefits Committee may grant other stock-based awards, either alone or in tandem with other awards, in amounts and subject to conditions as determined by the Compensation and Benefits Committee as set out in an award agreement.
Vesting
The 2019 Plan allows for awards subject to either time-based vesting or performance-based vesting, or both. The Compensation and Benefits Committee has the authority to determine the vesting schedule of each award, and to accelerate the vesting and exercisability of any award. The Company’s practice with respect to employee grants over the last five years has been to grant awards with a minimum of three years before any part of the award vests. Please see the Compensation Discussion and Analysis for information regarding the Company’s grant practices and outstanding awards for its Named Executive Officers.
Charter Communications | 65 | 2024 Proxy Statement
Adjustments Upon Changes in Stock
In the event of changes in the outstanding common stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the grant date of any award, awards granted under the 2019 Plan and any award agreements, the exercise price of options and SARs, the maximum number of shares of common stock subject to all awards may be equitably adjusted or substituted, as to the number, price or kind of a share of common stock or other consideration subject to such awards to the extent necessary to preserve the economic intent of the award.
Unless the Compensation and Benefits Committee specifically determines that such adjustment is in the best interests of the Company or its affiliates, the Compensation and Benefits Committee will, in the case of non-qualified stock options, ensure that any adjustments will not constitute a modification of such non-qualified stock options within the meaning of Code Section 409A. Any adjustments will be made in a manner which does not adversely affect the exemption provided under Rule 16b-3 under the Exchange Act. The Company will give participants notice of any adjustment.
Change in Control
Unless otherwise provided in an award agreement, in the event of a participant’s termination of service without cause or for good reason, in either case, during the 30-day period prior to or 13-month period following a change in control, the vesting of all awards will fully accelerate and all outstanding options and SARs will become immediately exercisable as of the date of the participant’s termination of service. In the case of performance awards, in the event of a participant’s termination of service without cause or for good reason, in either case, during the 30-day period prior to or 13-month period following a change in control, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions will be deemed met as of the date of the participant’s termination of service.
In the event of a change in control, the Compensation and Benefits Committee may in its discretion cancel any outstanding awards and pay to the holders the value of the awards based upon the price per share of Class A common stock received or to be received by other stockholders of the Company in the event. In the case of any option or SAR with an exercise price that equals or exceeds the price paid for a share of common stock in connection with the change in control, the Compensation and Benefits Committee may cancel the option or SAR without the payment of any consideration.
Unless otherwise provided in an award agreement, a change in control is defined generally as (a) the acquisition by one person or more than one person acting as a group, of beneficial ownership of Class A common stock representing more than 50% of the total voting power of the Company’s stock; (b) a majority of the members of the Board are replaced by directors whose appointment or election is not endorsed by a majority of the Board; (c) a merger, consolidation, reorganization or similar transaction involving the Company or in which securities of the Company are issued unless the Company’s stockholders before the transaction beneficially own at least 50% of the voting power of the resulting company’s equity and at least a majority of the Board prior to the transaction represent a majority of the board of the resulting company; or (d) the sale of all or substantially all of the assets of the Company.
Amendment or Termination of the 2019 Plan
The Board may amend or terminate the 2019 Plan. However, except in the case of adjustments upon changes in Class A common stock, no amendment will be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy any applicable laws or stock exchange rules. The 2019 Plan shall terminate on January 29, 2029, unless previously terminated by the Board.
Amendment of Awards
The Board may amend the terms of any one or more awards. However, the Board may not affect any amendment which would otherwise constitute an impairment of the rights under any award unless the Company requests the consent of the participant and the participant consents in writing.
Clawback and Recoupment
The Company may cancel any award or require the participant to reimburse any previously paid compensation provided under the 2019 Plan or an award agreement in accordance with (a) any Company recoupment policy (including the Charter
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Communications, Inc. Compensation Recovery Policy, as amended from time to time), (b) any other agreement or arrangement with a participant, or (c) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Securities Exchange Act of 1934, as amended, and any applicable rules and regulations promulgated under that act.
Repricing
The 2019 Plan, as amended, prohibits the repricing of options without shareholder approval, including reducing the exercise price per share of any outstanding option, permitting the cancellation, forfeiture or tender of outstanding options in exchange for other awards or for new options with a lower exercise price per share, or repricing or replacing any outstanding options by any other method. While the 2019 Plan initially authorized repricing, the 2019 Plan was amended by the Board on January 28, 2020 to prohibit repricing without shareholder approval and no such repricing has occurred under our equity plans to date.
Federal Income Tax Consequences of Awards
The following is a summary of the U.S. federal income tax consequences of awards granted under the 2019 Plan. This summary is based on U.S. federal income tax laws and regulations in effect on the date of this Proxy Statement and is not a complete description of the U.S. federal income tax laws. This summary is not intended to be exhaustive and does not constitute legal or tax advice. This summary does not address municipal, state or foreign income tax consequences of awards, or federal employment taxes.
Nonqualified Stock Options
The grant of a nonqualified stock option will not result in taxable income to the participant. The participant will recognize ordinary income at the time of exercise equal to the excess of the fair market value of the shares on the date of exercise over the exercise price and the Company will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon the sale of the shares acquired on exercise will be treated as capital gains or losses.
Incentive Stock Options (ISOs)
The grant of an ISO will not result in taxable income to the participant. The exercise of an ISO will not result in taxable income to the participant if at the time of exercise the participant has been employed by the Company or its subsidiaries at all times beginning on the date the ISO was granted and ending not more than 90 days before the date of exercise. However, the excess of the fair market value of the shares on the date of exercise over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum tax liability for the year the shares are sold.
If the participant does not sell the shares acquired on exercise within two years from the date of grant and one year from the date of exercise then on the sale of the shares any amount realized in excess of the exercise price will be taxed as capital gain. If the amount realized in the sale is less than the exercise price, then the participant will recognize a capital loss. If these holding requirements are not met, then the participant will generally recognize ordinary income at the time the shares are sold in an amount equal to the lesser of (a) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (b) the excess, if any, of the amount realized on the sale of the shares over the exercise price, and the Company will be entitled to a corresponding deduction.
SARs
The grant of a SAR will not result in taxable income to the participant. The participant will recognize ordinary income at the time of exercise equal to the amount of cash received or the fair market value of the shares received and the Company will be entitled to a corresponding deduction for tax purposes. If the SARs are settled in shares, then when the shares are sold the participant will recognize capital gain or loss on the difference between the sale price and the amount recognized at exercise. Whether it is a long-term or short-term gain or loss depends on how long the shares are held.
Restricted Stock and Performance Awards
Unless a participant makes an election to accelerate the recognition of income to the grant date (as described below), the grant of restricted stock or performance awards will not result in taxable income to the participant. When the restrictions
Charter Communications | 67 | 2024 Proxy Statement
lapse, the participant will recognize ordinary income on the excess of the fair market value of the shares on the vesting date over the amount paid for the shares, if any, or the amount received in the case of awards paid in cash and the Company will be entitled to a corresponding deduction. If the participant makes an election under Code Section 83(b) within thirty days after the grant date, the participant will recognize ordinary income as of the grant date equal to the fair market value of the shares on the grant date over the amount paid, if any, and the Company will be entitled to a corresponding deduction. Any future appreciation will be taxed at capital gains rates. However, if the shares are later forfeited, the participant will not be able to recover any taxes paid.
RSUs
The grant of an RSU will not result in taxable income to the participant. When the RSU vests, the participant will recognize ordinary income equal to the fair market value of the shares or the cash provided on settlement and the Company will be entitled to a corresponding deduction. Any future appreciation will be taxed at capital gains rates.
Section 409A
Code Section 409A imposes complex rules on nonqualified deferred compensation arrangements, including requirements with respect to elections to defer compensation and the timing of payment of deferred amounts. Depending on how they are structured, certain equity-based awards may be subject to Code Section 409A, while others are exempt. If an award is subject to Code Section 409A and a violation occurs, the compensation is includible in income when no longer subject to a substantial risk of forfeiture and the participant may be subject to a 20% penalty tax and, in some cases, interest penalties. The 2019 Plan and awards granted under the 2019 Plan are intended to be exempt from or conform to the requirements of Code Section 409A.
Section 162(m) and the Company’s Deduction
Generally, whenever a participant recognizes ordinary income under the 2019 Plan, a corresponding deduction is available to the Company provided that the Company complies with certain reporting requirements. However, under Code Section 162(m), the Company will be denied a deduction for compensation paid to certain senior executives that exceeds $1.0 million. Beginning January 1, 2018, with the passage and signing of the Tax Cuts and Jobs Act (the “Act”), this limitation will apply to the Company’s Chief Executive Officer, Chief Financial Officer, the Company’s other named executive officers, and anyone who was a covered person after December 31, 2016. Prior to January 1, 2018, certain performance-based compensation was excluded from the $1.0 million deduction limit. With the passage and signing of the Act, beginning January 1, 2018 (with an exception for certain grandfathered arrangements), the Company will be denied a deduction for any compensation exceeding $1.0 million for such covered individuals, regardless of whether the compensation is performance-based compensation.
New Plan Benefits
As of the record date, the closing price of our common stock was $299.42. No determination has yet been made as to the awards, if any, that any eligible individuals will be granted in the future and, therefore, the future benefits to be awarded under the 2019 Plan as amended by the Plan Amendment, which are subject to the discretion of the Committee, are not determinable at this time. The following table, however, sets forth the aggregate value of benefits or amounts that were received by or allocated to each of the following persons or groups, in each case, under the 2019 Plan with respect to fiscal year 2023:
Name and position | Dollar value ($)(1) | Number of units (#)(1) | ||||||
Christopher L. Winfrey, President and Chief Executive Officer | 8,696,687 | 715,855 | ||||||
Richard J. DiGeronimo, President, Product & Technology | 6,085,226 | 414,267 | ||||||
Jessica M. Fischer, Chief Financial Officer | 3,347,020 | 227,847 | ||||||
Kevin D. Howard, EVP, Chief Accounting Officer & Controller | 912,843 | 62,140 | ||||||
R. Adam Ray, EVP, Chief Commercial Officer | 1,825,353 | 124,280 | ||||||
Thomas M. Rutledge, Board Member Emeritus (Former Executive Chairman)(2) | — | 110,225 | ||||||
Executive Group | 20,867,129 | 1,654,614 | ||||||
Non-Executive Directors Group(2) | 3,516,369 | 10,609 | ||||||
All Employees Group (including all current officers who are not executive officers) | 539,826,845 | 4,184,675 | ||||||
Charter Communications | 68 | 2024 Proxy Statement
| (1) | Such units are inclusive of all awards granted in fiscal 2023, inclusive of restricted stock units, restricted stock and stock options. Restricted stock and restricted stock units are valued based on the closing price on the date of grant. No dollar value is ascribed to stock options. |
| (2) | Restricted stock awards granted to Mr. Rutledge after his retirement and in connection with his role as Board Member Emeritus are included in the values for the Non-Executive Directors Group. |
Securities Authorized for Issuance Under Equity Compensation Plans
The following information is provided as of December 31, 2023 with respect to equity compensation plans:
Plan Category | Number of Securities to be Issued Upon Exercise of | Weighted Average Exercise Price of | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | |||||||||
Equity compensation plans approved by security holders | 15,029,325 | (1) | $403.81 | 5,113,241 | (1) | |||||||
Equity compensation plans not approved by security holders | — | $ — | — | |||||||||
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TOTAL | 15,029,325 | (1) | 5,113,241 | (1) | ||||||||
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| (1) | This total does not include 10,609 shares issued pursuant to restricted stock grants made under our 2019 Stock Incentive Plan to our non-employee directors, which are subject to vesting based on continued service. |
For information regarding outstanding equity awards granted to our NEOs, see the information contained in the “Outstanding Equity Awards at Fiscal Year End” table in this proxy statement.
Required Vote
Approval of this Proposal No. 2:2 requires the affirmative vote of the holders of a majority of the votes cast at the annual meeting. 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 approval of this Proposal No. 2.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” INCREASING THE NUMBER OF SHARES IN THE COMPANY’S 2019 STOCK INCENTIVE PLAN.
Charter Communications | 69 | 2024 Proxy Statement
Proposal No. 3: Amend the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware Law Provisions Regarding Officer Exculpation
(Item 3 on Proxy Card)
In 2022, the State of Delaware enacted legislation that enables Delaware companies to limit the liability of certain of their officers in limited circumstances. In light of this update, we are proposing to amend the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to add a provision exculpating certain of the Company’s officers from liability in specific circumstances, as permitted by Delaware law. The new Delaware legislation only permits, and our proposed amendment would only permit, exculpation for direct claims (as opposed to derivative claims made by stockholders on behalf of the corporation) and would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. The rationale for so limiting the scope of liability is to strike a balance between stockholders’ interest in accountability and their interest in the Company being able to attract and retain quality officers.
The Nominating and Corporate Governance Committee believes that there is a need for directors and officers to remain free of the risk of financial ruin as a result of an unintentional misstep. Further, the Nominating and Corporate Governance Committee noted that the proposed provision would not negatively impact stockholder rights. Therefore, taking into account the narrow class and type of claims for which officers’ liability would be exculpated, and the benefits the Nominating and Corporate Governance Committee believes would accrue to the Company and its stockholders in the form of an enhanced ability to attract and retain talented officers, the Nominating and Corporate Governance Committee recommended to the Board an amendment to the Certificate of Incorporation to provide such exculpation to the extent permitted by Delaware law. Based on this recommendation, the Board determined that it is in the best interests of the Company and our stockholders to amend the Certificate of Incorporation as described herein.
Accordingly, we ask our stockholders to vote on the following resolution:
“RESOLVED, that the Company’s stockholders approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to add a new Article TWELFTH, which shall read in its entirety as follows:
ARTICLE TWELFTH
OFFICER EXCULPATION
No officer of the Corporation shall have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as an officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. No amendment, alteration or repeal of this Article TWELFTH shall eliminate or reduce the effect thereof in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article TWELFTH would accrue or arise, prior to such amendment, alteration or repeal.”
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO AMEND THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
Charter Communications | 70 | 2024 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 2021.2024. 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 2021.2024.
Charter Communications | 6371 | 20212024 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 2021.2024.
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 the years ended December 31, 20202023 and 2019,2022, 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$7 million and $8 million, respectively.
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.2023 and 2022.
Tax Fees
Charter incurred tax fees to KPMG of approximately $1 million and $2 million during each of the years ended December 31, 20202023 and 2019, respectively.2022.
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, 20202023 and 2019.2022. The Audit Committee considered whether the provision of non-audit services was compatible with KPMG’s independence. Each year, including 2020,2023, 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”“Investors” section of our website at ir.charter.com.ir.charter.com.
Charter Communications | 6472 | 20212024 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 20202023 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”“Investors” 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 fourfive meetings in 2020.2023.
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, 2020.2023. 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(Communications with Audit Committees), with KPMG, the independent registered public accounting firm for the Company’sCompany���s audited financial statements for the year ended December 31, 2020.2023.
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, 20202023 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 2021.2024.
DAVID C. MERRITT
KIM C. GOODMAN
JOHN D. MARKLEY, JR.
Charter Communications | 6573 | 20212024 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: 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’ best interests.
RESOLVED: theResolved, 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, territorial, 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
Full disclosure of Charter’s lobbying activities and expenditures is needed to assess whether Charter’s lobbying is consistent with its expressed goals and stockholder interests. Charter spent $58,985,000$92,185,000 from 2010 – 20192022 on federal lobbying. This does not include state lobbying expenditures, where Charter also lobbies but disclosure is uneven or absent. Forextensively, for example Charter had at least 310 lobbyists in 28 states in 2019 (followthemoney.org) and spent $1,595,285spending over $3.4 million on lobbying in New YorkCalifornia from 2015 – 2022.
Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.1 Unlike many of its peers, Charter fails to disclose its payments to trade associations and social welfare groups (SWGs), or the amounts used for 2017 and 2018.
lobbying, to stockholders. Charter serves on the board of NCTA – The Internet & Television Association, which spent $160,250,000$203,440,000 on lobbying from 2010 – 2019,2022, and is a member of Broadband for America, which was behind a campaignsupports SWGs that “misappropriated names and personal information as part of a bid to submit more than 1.5 million statements favorable to their cause” tolobby like the FCC on net neutrality.1RATE Coalition. Charter also 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 tosponsoring the American Legislative Exchange Council (ALEC).2
We are concerned that 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 has lobbied against net neutrality.23 Charter reportedly ran “a fake consumer group in Maine that’s killing community broadband.”4 As Charter paid zero federal taxes in 2020,55 the RATE Coalition lobbied against raising taxes to pay for health care, education and safety net programs.6 And Charter’swhile Charter is committed to diversity and inclusion, over 300 groups have asked Charter to leave ALEC membership has drawn press scrutiny,because of its voter restriction efforts.37 and over 110 companies have publicly left ALEC.
We believeIn the reputational damage stemming fromlast three years, this misalignment harms long-term value creation byproposal received majority support of outside stockholders. Charter which has been named to several “America’s Most Hated Companies” lists.4 Therefore, we urge Charter toshould 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/. |
| 5 | https://www.citizen.org/news/ |
| 6 | https://www.washingtonpost.com/us-policy/2021/08/31/business-lobbying-democrats-reconciliation/. |
| 7 | https://www.commoncause.org/press-release/common-cause-fair-fight-action-and-over-300-organizations-call-on-corporations-to-cut-ties-with-alec/. |
Charter Communications | 6674 | 20212024 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, including the publication of our new Political Activities Policy Statement, 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 policiesAs further detailed in our Company’s Political Activities Policy Statement, available on our website at: https://policy.charter.com, our Government Affairs team manages the Company’s political engagement strategy and procedures in place to ensure that all lobbying activities and reports directly to the President and Chief Executive Officer, with oversight from the Nominating and Corporate Governance Committee of our Board of Directors, which is comprised exclusively of independent directors. The Board has delegated authority and responsibility for state and local campaign contributions to the President and Chief Executive Officer, subject to the provisions of the Company’s Code of Conduct and any other applicable Company policies. The Nominating and Corporate Governance Committee receives an annual report from the Government Affairs team on the Company’s political contributions conducted byengagement strategy, including lobbying activities and expenditures made during the Companypast year and our employees comply with all applicable laws, including robust internal controlsthe framework for the coming year. The Board of Directors receives quarterly updates on regulatory activities and oversight. policy priorities and regular updates on significant policy issues facing the Company.
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. As further addressed in our Political Activities Policy Statement, our Company maintains memberships 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 our Political Activities Policy Statement, and 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 | 6775 | 20212024 Proxy Statement
Proposal No. 4:6: Stockholder Proposal Regarding
Chairman of the Board and CEO RolesPolitical Expenditures Report
(Item 46 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: ShareholdersResolved, that the shareholders of Charter Communications, Inc. (Charter), urge the Board of Directors (Board) to take the steps necessary to adopt a policy to require(“Charter” or “Company”) hereby request that the ChairmanCompany provide a report, updated semiannually, disclosing the Company’s:
| 1. | Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum. |
| 2. | Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: |
| a. | The identity of the recipient as well as the amount paid to each; and |
| b. | The title(s) of the person(s) in the Company responsible for decision-making. |
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the Board shallannual meeting. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term shareholders of Charter, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
A company’s reputation, value, and bottom line can be an independent memberadversely impacted by political spending. The risk is especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations – groups that routinely pass money to or spend on behalf of the Board. This policy would be phased in for the next CEO transition.
If the Board determinescandidates and political causes that a Chair who was independent when selected is no longer independent,company might not otherwise wish to support.
When the Conference Board shall selectreleased its 2021 “Under a Microscope” report8 it detailed these risks, and recommended the process suggested in this proposal. The organization also said, “a new Chair who satisfiesera of stakeholder scrutiny, social media, and political polarization has propelled corporate political activity-and the requirementsrisks that come with it-into the spotlight. Political activity can pose increasingly significant risks for companies, including the perception that political contributions-and other forms of the policy within a reasonable amount of time. Complianceactivity-are at odds with this policy is waived if no independent director iscore company values.”
Publicly 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. Whilerecords show Charter has appointedcontributed at least $3.9 million in corporate funds since the 2010 election cycle.
This proposal asks Charter to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations which may be used for electoral purposes – and are otherwise not public. This would bring our Company in line with a lead independent director,growing number of leading companies, including AT&T Inc., Comcast Corporation, and Verizon Communications Inc., which present this information on their websites.
Without knowing the lead director’s duties are not robust and do not include duties like approvalrecipients of Board meeting schedules and agendas,our company’s political dollars, we cannot sufficiently assess whether our company’s election-related spending aligns or approvalconflicts with its business strategy, corporate priorities, or other areas of information sent to the Board.
Shareholders have serious concerns regarding the Board’s persistent issues such as:concern. We urge your support for this critical governance reform.”
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.”
| 8 | https://www.conference-board.org/topics/corporate-poIiticaI-activity/Under-a-Microscope-A-New-Era-of-Scrutiny-for-Corporate-Political-Activity |
Charter Communications | 6876 | 20212024 Proxy Statement
Statement Against Stockholder Proposal Regarding Chairman of the Board and CEO RolesPolitical Expenditures Report
Our Board believes that our Company’s participation in the political, legislative and regulatory processes at all levels of Directors valuesgovernment enhances stockholder value. Our Company is committed to participating constructively in the flexibility of selectingpolitical process to increase shareholder value and in full compliance with applicable rules and regulations. Our Company’s political contributions and expenditures are made to further the structure of leadership best suited to meet the needsinterests of the Company and its stockholders. The Board, which consistsour stockholders and are made without regard to the personal political preferences of directorsindividual board members, officers, or employees. We are subject to extensive regulation at the federal and state levels and are involved in a number of legislative initiatives across a broad spectrum of policy areas that can have an immediate and dramatic effect on our business and operations. We ethically and constructively promote legislative and regulatory actions that further the business objectives of our Company and attempt to protect our Company from unreasonable, unnecessary, or burdensome legislative or regulatory actions at all levels of government.
We actively participate in the political process and maintain memberships with diverse experience, backgrounds, perspectivesa variety of trade associations with the ultimate goal of promoting and extensive knowledge aboutprotecting the economic future of our Company and our stockholders and employees. An important part of participating effectively in the political process is making prudent political contributions and focused lobbying expenditures – but only where permitted by applicable law.
Participation in the political process and as a member of various trade associations comes with the understanding that we may not always agree with all of the positions of the recipients, organizations, or organizations’ other members. However, as detailed in our Company’s Political Activities Policy Statement, available on our website at https://policy.charter.com, we believe that these recipients take many positions and address many issues of importance to our Company in a meaningful manner, and the associations take positions and address issues in a collective industry is best positioned to evaluate its optimal leadership structure. Given the dynamicmanner and competitive environment in which we operate, the Board believespredominantly advance positions consistent with company interests, that the right leadership structure may vary as circumstances warrant. The Board recommends a vote against this proposal because it believes it is inwill help us provide strong financial returns, enhance long-term stockholder value, and advance the best interests of our stockholders forCompany..
Our Board believes that the Boardinformation currently made available strikes the appropriate balance between transparency and excessive burden and cost, and that additional disclosures with respect to have the flexibilitylobbying and political expenditures would not provide useful information to determine the best person to serve as the Chairmanstockholders. The implementation of the Board, whetherproposal’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 personcould adversely affect stockholder interests, or require us to disclose proprietary information, putting us at a competitive disadvantage. For these reasons, additional disclosures regarding contributions to such organizations and associations would not provide useful information to stockholders.
Because parties with interests adverse to our Company also participate in the political process to their business advantage, any unilateral expanded disclosure, above what is a non-management director orrequired by law and equally applicable to all similar parties engaged in public debate, could benefit those parties while harming 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 circumstancesinterests 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.our stockholders. The Board believes any reporting requirements that itsgo beyond those required under existing law should be applicable to all participants in the process, rather than our Company alone (as the proponent requests).
In short, we believe our current structurepolicies and governance allows itprocedures governing political contributions, including our Political Activities Policy Statement, adequately protect our corporate brand, values and reputation, while allowing our Company to provide effective challengeactively and oversighteffectively participate in the political process with the ultimate goal 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, commitmentpromoting and protecting 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 forbest interests of the Company and our stockholders and employees. If adopted, the dayproposal would cause our Company to day leadershipincur undue cost 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 presentadministrative burden, as well as providing leadership forcompetitive harm given 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 memberlevel of management present. Non-management directors use these executive sessions to discuss various matters regarding the Companydetail it seeks and the Board, as well as evaluationscomplexity of the CEO and senior management, management and Board successions, matterspolitical advocacy process, without commensurate benefit 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 | 6977 | 20212024 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
“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’sAn assessment of program effectiveness,Charter’s pay versus performance alignment was conducted pursuant to Item 402(v) of Regulation
Supporting Statement
Investors seek quantitative, comparable data to understand the effectiveness“measurement period” throughout this Pay Versus Performance discussion).
Whereas: Numerous studiesAnalysis, Charter’s philosophy for NEO compensation is to provide the largest portion of pay in the form of long-term incentives that vest over a multi-year timeframe and are tied to stock price appreciation; it is Charter’s view that this creates the strongest possible alignment between executives and shareholders. When evaluating this philosophy through the lens of pay versus performance, actual compensation realized or earned by NEOs should therefore be primarily dependent upon Charter creating sustained stock price growth, with increases in executive pay from periods of stock price appreciation and decreases in executive pay from periods where the stock price declines. Furthermore, while financial performance achievement drives payouts under Charter’s annual bonus plan, such outcomes should have pointeda lesser impact than stock price performance given that – based on values disclosed in the Summary Compensation Table – 2023 bonus payouts represented 4% of Mr. Winfrey’s total compensation and 4% of total compensation for the other NEOs compared to the corporate benefitsvalue of a diverse workforce.equity awards granted in 2023 (including both awards under the annual long-term incentive plan and the 2023 Performance Equity Program) which represented 94% of Mr. Winfrey’s total compensation, and 93% of total compensation for the other NEOs.
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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 cultureexception 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 supportreflects actual payouts from the executive leadership of the Company. Our Chairmanannual bonus plan (versus target opportunities) and CEO leads our Executive Steering Committee, comprising all of the Company’s most senior leaders. The group regularly reviews progress against our diversityincludes certain other compensation 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 programsbenefits items not traditionally included 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 partnerstarget compensation, such 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 contributematching contributions to the Company’s success.
401(k) plan.
These efforts evidence thatyear.
Tabular Disclosure of Pay Versus Performance (1) | ||||||||||||||||||||
Value of Initial Fixed $100 Investment Based On: | ||||||||||||||||||||
Year | Summary Compensation Table Total for CEO (Rutledge) (2)(3) | Compensation Actually Paid to CEO (Rutledge) (2)(3) | Summary Compensation Table Total for CEO (Winfrey) (2)(3) | Compensation Actually Paid to CEO (Winfrey) (2)(3) | Average Summary Compensation Table Total for Other NEOs (2)(3) | Average Compensation Actually Paid to Other NEOs (2)(3) | Charter Total Shareholder Return | Primary Peer Group Total Shareholder Return | Net Income ($M) | Adjusted EBITDA ($M) | ||||||||||
| 2023 | n/a | n/a | $89,077,078 | $93,575,272 | $25,243,133 | $27,459,371 | $80 | $96 | $5,261 | $21,894 | ||||||||||
| 2022 | $39,213,350 | ($35,738,207) | $15,626,967 | ($7,482,444) | $7,482,328 | ($4,316,044) | $70 | $84 | $5,849 | $21,616 | ||||||||||
| 2021 | $41,860,263 | $39,859,417 | n/a | n/a | $8,196,657 | $11,663,225 | $134 | $114 | $5,320 | $20,630 | ||||||||||
| 2020 | $38,846,705 | $251,702,262 | n/a | n/a | $16,403,815 | $74,038,050 | $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. |
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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| (3) | The table below provides a reconciliation of the adjustments to |
Chief Executive Officer | Other Named Executive Officers | |||||||||||||||||||||||||||||
2020 (Rutledge) | 2021 (Rutledge) | 2022 (Rutledge) | 2022 (Winfrey) | 2023 (Winfrey) | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||
Summary Compensation Table Total | $38,846,705 | $41,860,263 | $39,213,350 | $15,626,967 | $89,077,078 | $16,403,815 | $8,196,657 | $7,482,328 | $25,243,133 | |||||||||||||||||||||
Less | ($176,085 | ) | ($59,302 | ) | $249,614 | $0 | $0 | ($33,655 | ) | ($11,136) | $0 | $0 | ||||||||||||||||||
Plus | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||||||||||||||||||||
Less | ($30,005,695) | ($30,004,409) | ($30,005,043) | ($12,001,909) | ($83,653,337 | ) | ($12,999,065) | ($4,000,613) | ($5,325,719) | ($22,689,724) | ||||||||||||||||||||
Plus year-end (a) | $39,025,852 | $32,007,744 | $9,911,059 | $5,490,586 | $87,091,096 | $16,074,306 | $4,093,165 | $2,034,016 | $23,621,816 | |||||||||||||||||||||
Plus year-end or the vesting date, if earlier(b) | $204,011,485 | ($3,944,879 | ) | ($55,107,188 | ) | ($16,598,088 | ) | $1,060,435 | $54,592,650 | $3,385,151 | ($8,506,669) | $1,284,147 | ||||||||||||||||||
Compensation Actually Paid (c) | $251,702,262 | $39,859,417 | ($35,738,207 | ) | ($7,482,444 | ) | $93,575,272 | $74,038,050 | $11,663,225 | ($4,316,044) | $27,459,371 | |||||||||||||||||||
| (a) | The values for each of years 2020 – 2022 have been adjusted from the amounts disclosed in our 2023 Proxy Statement, which incorrectly presented the change in fair value of such awards instead of the fair value at year end. |
| (b) | The 2020 value for Rutledge and the |
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| (1) | The ratio of Compensation Actually Paid to Summary Compensation Table Total is calculated based on the corresponding CEO and |
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 increasing 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 6.5x the Summary Compensation Table Total for the CEO and 4.5x 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 flat value for NEOs relative to the prior year. • 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 |
• Consistent with the change in stock price performance relative to 2020, Charter’s Compensation Actually Paid as a proportion of Summary Compensation Table Totals was much lower than in the prior year – declining from 6.5x to 1.0x for the CEO and 4.5x to 1.4x for the other NEOs. In addition, and consistent with Charter’s observed pay versus performance outcomes for 2021, Compensation Actually Paid should generally trend near 1.0x of Summary Compensation Table Totals for a short-term, single-year period of flat stock price performance, since the corresponding valuations of stock option and RSU awards should also remain flat over that period.• The higher ratio of Compensation Actually Paid to Summary Compensation Table Totals for other NEOs (1.4x) relative to Mr. Rutledge as CEO (1.0x) was driven primarily by • Financial performance results were strong in 2021 – 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. |
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., the net losses in equity value driven by the declining stock price exceeded the 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. |
2023 – The near-term positive stock price performance over the year did not immediately translate into growth in value for NEOs due to the long-term, performance-based nature of Charter’s compensation program. • Over the year, stock prices for both Charter and Primary Peer companies recovered from multi-year lows in 2022, with the value of an initial $100 investment made in Charter on 12/31/2019 increasing 14.6% over 2023 (from $70 to $80), approximately equal to the corresponding 15.0% increase (from $84 to $96) in such an investment among Primary Peers.• The increase in stock price did not translate into meaningfully higher Compensation Actually Paid levels relative to Summary Compensation Table Totals, with the ratio of Compensation Actually Paid to Summary Compensation Table Totals equal to 1.1x for the CEO and 1.0x for the other NEOs. This outcome was driven primarily by awards under the 2023 Performance Equity Program, which were granted in February 2023, providing value equivalent to 5.0x each participating NEO’s annual LTI target in a single grant (net of the grant value from time-vested awards delivered earlier in January 2023), and with vesting tied to the achievement of stock price hurdles over a 3 to 5-year period following the grant date. The grant value of these awards therefore represented the substantial portion of unvested equity value for NEOs (including unvested grants from prior years), but saw limited appreciation in their fair market value between the |
grant date and year-end due to (i) the longer-time horizon for vesting (between 3 to 5 years) and (ii) aggressive stock price hurdle vesting requirements, with the lowest stock price hurdle of $507 representing approximately 30% appreciation relative to the fair market value of Charter stock atyear-end ($390.73, equal to the average of Charter’s high and low stock price on December 29, 2023).• Charter’s Net Income decreased by 10.1% from $5.8 billion to $5.3 billion and Adjusted EBITDA increased 1.3% from $21.6 billion to $21.9 billion. As noted above, financial performance achievement only impacts Charter’s Compensation Actually Paid to the extent that such results translate into stock price performance. However, the mixed performance results reflected in these earnings measures – a $500 million decline in Net Income against a $300 million increase in Adjusted EBITDA – do align with the flat relationship between Compensation Actually Paid and Summary Compensation Table Totals. In particular, the limited change in equity value over 2023 resulted in Compensation Actually Paid that was approximately the same as the Summary Compensation Table Totals, and this is an appropriate outcome given the mixed earnings results.• The pay versus performance outcome in 2023 continues to demonstrate the high degree of performance accountability in Charter’s compensation program, with Compensation Actually Paid levels being comparable to Summary Compensation Table Totals in spite of stock price growth over the year (a similar outcome to 2021 but with positive versus flat stock price performance). In addition, given the multi-year nature of the 2023 Performance Equity Program – which is heavily tied to stock price performance through an option-heavy mix and stock price vesting hurdles – the awards made under the program will continue to be key drivers of pay versus performance outcomes in future years. |
| (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 – 2023 bonus designs for all NEOs | |||||||
| Capital and Free Cash Flow Management | Non-financial metric used in 2020 – 2023 bonus designs for all NEOs | |||||||
| Network Expansion and Evolution | Non-financial metric used in 2023 bonus design for all NEOs | |||||||
| (1) | Refer to the Compensation Discussion and Analysis for a description of Charter’s Primary Peer group and the annual bonus plan design and performance metrics. |
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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.
Disclosurefinal tranches 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 management2016 awards vested in 2020 and corporate strategy2021, 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 needstranches of the diverse communities we serve2023 awards were outstanding and how to implement our programs inunvested as of December 31, 2023. For valuation dates on which awards were outstanding and unvested, the most impactful way. Led by Charter’s Chief Diversity Officer,fair value was calculated using a Monte Carlo valuation analysis. For valuation dates on which awards were vesting, stock options were valued using 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 internshipBlack-Scholes option-pricing model with the company.
This commitment to diversity means buildingsame assumptions as noted above for time-vested stock options, 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 awarenessRSUs were valued at the average of the many identitieshigh and heritages that contribute tolow prices of Charter common stock on 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.
applicable valuation date.
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 20202023 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, 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 2017,2020, and the regulations require that a Median Employee be identified once every three years. The Median Employee for 20202022 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. As of December 31, 2023, Charter had 101,100 full and part-time active U.S. employees, other than the CEO.
In 2023, the Median Employee identified in 2022 for purposes of calculating our CEO Pay Ratio had no material change in role or compensation since the original analysis, and this individual therefore continued to be used as the Median Employee for purposes of calculating this year’s pay ratio. Our 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, our CEO Pay Ratio may not be comparable to the CEO pay ratios presented by other companies.
For 2020,2023, the Median Employee had total annual compensation of $56,568,$54,476, 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 as disclosed in the Summary Compensation Table relative to that of the Median Employee was as follows:
CEO Total Annual Compensation | $ | 38,846,705 | $ | 89,077,078 | ||||
Median Employee Total Annual Compensation | $ | 56,568 | $ | 54,476 | ||||
Ratio of CEO to Median Employee Total Annual Compensation | 686.7 | 1,635.2 |
As approximately 75% of the CEO’s compensation disclosed in the Summary Compensation Table was from equity awards made under the 2023 Performance Equity Program – which is intended to provide value over a multi-year period and described in further detail in the in the Compensation Discussion and Analysis – an alternative pay ratio was calculated by annualizing the value delivered under the program over the 5-year vesting period for such awards. The resulting alternative ratio of the CEO’s total annual compensation relative to that of the Median Employee would be as follows:
Alternative CEO Total Annual Compensation | $ | 35,753,917 | ||
Median Employee Total Annual Compensation | $ | 54,476 | ||
Alternative Ratio of CEO to Median Employee Total Annual Compensation | 656.3 |
Charter Communications | 85 | 2024 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”“Investors” 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, 2023, all applicable filings were timely made.
Charter Communications | 77 | 2021 Proxy Statement
Stockholder Proposals for 20222025 Annual Meeting
To be included in the proxy statement for the 20222025 annual meeting, a stockholder proposal must be delivered to the Corporate Secretary at the Company’s executive offices no later than November 18, 2021.14, 2024. 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 20222025 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, 2022the close of business on December 24, 2024 and no later than the close of business on January 26, 2022.23, 2025. 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 90 daysthe later of (i) close of business on the 90th day 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-K10-Q filed on May 19, 2016, together with the amendment filed as an exhibit to the Company’s Current Report on Form 8-K filed on July 30, 2018,October 27, 2023 and is available at the SEC Internet site (http://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 | 86 | 2024 Proxy Statement
Our Annual Report on Form 10-K for the year ended December 31, 20202023 is available without charge by accessing the “Investor Relations”“Investors” 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 20202023 Annual Report. The SEC has enacted a rule that allows the Company to deliver only one copy of our Proxy Statement and 20202023 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.(866) 540-7095. 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 | 7887 | 20212024 Proxy Statement
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:Appendix A: Non-GAAP Financial Measures
The NoticeCompany uses certain measures that are not defined by U.S. generally accepted accounting principles (“GAAP”) to evaluate various aspects of its business. Adjusted EBITDA and Proxy Statementfree cash flow are non-GAAP financial measures and Annual Reportshould be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are available at www.proxyvote.com.reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, below.
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 (expense), net and other operating (income) expense, 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 for each of the years ended December 31, 2023 and 2022.
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):
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
Net income attributable to Charter shareholders | $ | 4,557 | $ | 5,055 | ||||
Plus: Net income attributable to noncontrolling interest | 704 | 794 | ||||||
Interest expense, net | 5,188 | 4,556 | ||||||
Income tax expense | 1,593 | 1,613 | ||||||
Depreciation and amortization | 8,696 | 8,903 | ||||||
Stock compensation expense | 692 | 470 | ||||||
Other, net | 464 | 225 | ||||||
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Adjusted EBITDA | $ | 21,894 | $ | 21,616 | ||||
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Net cash flows from operating activities | $ | 14,433 | $ | 14,925 | ||||
Less: Purchases of property, plant and equipment | (11,115 | ) | (9,376 | ) | ||||
Change in accrued expenses related to capital expenditures | 172 | 553 | ||||||
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Free cash flow | $ | 3,490 | $ | 6,102 | ||||
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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.
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D38635-P50449-Z79225 Charter Communications | 88 | 2024 Proxy Statement
APPENDIX B
SECOND AMENDMENT TO
CHARTER COMMUNICATIONS, INC.
Annual Meeting2019 STOCK INCENTIVE PLAN
THIS SECOND AMENDMENT (this “Second Amendment”) to the Charter Communications, Inc. 2019 Stock Incentive Plan, as amended January 28, 2020 (the “Plan”), is dated as of StockholdersApril 23, 2024 (the “Amendment Effective Date”).
April 27, 2021 10:30 AM Eastern Daylight Time1. Stock Subject to the Plan; Grant Limitations. Section 4.2 of the Plan is hereby amended and restated as follows:
This proxySubject to adjustment pursuant to Section 13, the maximum number of Shares that may be made the subject of Options and Awards granted under the Plan is solicited23,000,000. Following the effective date of this Plan (as described in Section 20.3 hereof), no additional awards shall be made under the Amended and Restated 2009 Stock Incentive Plan, as amended through May 18, 2016. The Company shall reserve for the purposes of the Plan, out of its authorized but unissued Shares or out of Shares held in the Company’s treasury, or partly out of each, such number of Shares as shall be determined by the Board in its discretion. The aggregate number of DirectorsShares that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall not exceed 23,000,000 which number shall be calculated and adjusted pursuant to Section 13 only to the extent that such calculation or adjustment will not affect the status of any Option intended to qualify as an Incentive Stock Option under Code Section 422.
The stockholders hereby appoint Thomas M. Rutledge, Richard R. Dykhouse and Thomas E. Proost or any of them,2. Effective Date. This Amendment shall become effective 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. thatAmendment Effective Date. Except as expressly set forth herein, the stockholders are entitled to vote at the Annual Meeting of Stockholders to be held at 10:30 AM, Eastern Daylight Time on April 27, 2021, via virtual meeting at www.virtualshareholdermeeting.com/CHTR2021,Plan shall remain in full force 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 votedeffect in accordance with the Boardits terms.
[End of Directors’ recommendations.
Continued and to be signed on reverse side
Document]
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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-Z79225
CHARTER COMMUNICATIONS, INC.
Annual Meeting of Stockholders
April 27, 2021 10:30 AM Eastern Daylight Time
This proxy is solicited by the Board of Directors
The stockholders hereby appoint Thomas M. Rutledge, 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 10:30 AM, Eastern Daylight Time on April 27, 2021, via virtual meeting at www.virtualshareholdermeeting.com/CHTR2021, 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