2nd UPDATE, 3:00 PM: Now here’s a response from NYC Comptroller John Liu to Cablevision’s response to him: “The Cablevision board may have helped the Dolan family shareowners extract great value over the past decade, thanks to the many family members on the payroll, their excessive pay, and pervasive related-party deals. The board hasn’t helped create superior value for public shareowners, however. Cablevision’s total shareowner returns substantially lag its peers over the past 10 years. These are among the reasons shareowners have repeatedly voted for boardroom change. It’s baffling that three directors who repeatedly failed to receive majority support remain on the board.”
UPDATE, WEDNESDAY 4:00 PM: Cablevision just offered this response to NYC Comptroller John Liu: “This is one of many letters that Mr. Liu sends to companies, and we are baffled because Cablevision board members have helped to create great value for Cablevision shareholders over the past decade. This strikes us as an attempt to distract attention from the indictment and ongoing trial of Mr. Liu’s campaign.”
PREVIOUS, WEDNESDAY 2:32 PM: The New York mayoral candidate will add drama to the company’s annual meeting May 23 on Long Island. Comptroller John Liu, who controls the city’s 532,020 Class A Cablevision shares, says in a letter to other investors that the five directors that public shareholders can elect have “failed as a group to provide effective, independent oversight.” That has resulted in poor performance, excessive executive pay, and “pervasive conflicts of interests” at the company run by the family of CEO Jim Dolan, he says. Liu wants other public investors to join him in withholding their votes for the Class A directors. The Dolan family’s ownership of the Class B shares gives it 12 of the board’s 17 seats. But Liu says that public shareholders will have unusual leverage if the Dolans decide to sell Cablevision — which Citibank analyst Jason Bazinet considers a real possibility. Directors without direct ties to management likely would have to oversee that process; all five of the Class A directors are considered “independent” compared with just two of the Class B directors. Public shareholders can’t defeat the Class A candidates, but withholding votes would “help to send a message that the Cablevision board can no longer ignore the need for boardroom change,” Liu says. His attack on Cablevision comes as city labor leaders allege that the Dolans refuse to bargain in good faith with unionized cable installers — a charge that the company rejects.
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