UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.    )

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o      Soliciting Material Pursuant to § 240.14a-12

COMCAST CORPORATION

 

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Notice of 2009 Annual Meeting of Shareholders of Comcast Corporation

 

 

All shareholders are cordially invited to attend the meeting. Travel directions can be found on page 74 of the attached proxy statement. At the meeting you will hear a report on our business and have an opportunity to meet our directors and executive officers.

 

Only shareholders of record on March 4, 2009 may vote at the meeting. Attendance at the meeting is limited to shareholders of record and one guest per shareholder. If the meeting is adjourned because a quorum is not present, those shareholders who attend the reconvened adjourned meeting shall constitute a quorum for the purpose of acting upon the matters presented at the adjourned meeting pursuant to the rules described in “Outstanding Shares and Voting Rights” in the attached proxy statement.

 

We are pleased to take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their shareholders via the Internet. We believe that the e-proxy process expedites shareholders’ receipt of proxy materials and lowers the costs and reduces the environmental impact of our annual meeting of shareholders. Accordingly, we have mailed to our shareholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials containing instructions on how to access the attached proxy statement and our Annual Report on Form 10-K via the Internet and how to vote online. The Notice of Internet Availability of Proxy Materials and the attached proxy statement also contain instructions on how you can receive a paper copy of the proxy materials. If you elect to receive a printed copy of our proxy materials, our 2008 Annual Report on Form 10-K will be mailed to you along with this proxy statement.

 

The Notice of Internet Availability of Proxy Materials is being mailed to our shareholders beginning on or about April 3, 2009. The attached proxy statement is being made available to our shareholders beginning on or about April 3, 2009.

 

Your vote is important. Please vote your shares promptly. To vote your shares, you can use the Internet as described in the Notice of Internet Availability of Proxy Materials, in the attached proxy statement and on your proxy card; call the toll-free telephone number as described in the attached proxy statement and on your proxy card; or complete, sign and date your proxy card and return your proxy card by mail.

 

ARTHUR R. BLOCK

Secretary

 

April 3, 2009

TABLE OF CONTENTS

 

 

* * *

 

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 13, 2009. Our proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 are available at www.proxyvote.com.

 

PROXY STATEMENT

 

 

Who May Vote

 

Holders of record of Comcast Corporation’s (“Comcast,” the “Company” or “our,” “we” or “us”) Class A and Class B common stock at the close of business on March 4, 2009 may vote at the annual meeting of shareholders. Holders of our Class A Special common stock are not entitled to vote at the meeting. This proxy statement is made available to holders of Class A Special common stock for informational purposes only. The Notice of Internet Availability of Proxy Materials is being mailed to our shareholders beginning on or about April 3, 2009. This proxy statement is being made available to our shareholders beginning on or about April 3, 2009.

 

How to Vote

 

You may vote in person at the meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting.

 

How Proxies Work

 

Our Board of Directors (the “Board”) is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct. You may vote for all, some or none of our director candidates. You may also vote for or against the other proposals or abstain from voting.

 

You can vote by proxy in any of the following ways:

 

 

If you vote via the Internet or by telephone, your vote must be received by 11:59 p.m. Eastern Daylight Time on May 12, 2009.

 

If you give us your signed proxy but do not specify how to vote, we will vote your shares in favor of the director candidates; the ratification of the appointment of our independent auditors; the approval of our 2002 Employee Stock Purchase Plan, as amended and restated; the approval of our 2002 Restricted Stock Plan, as amended and restated; the approval of our 2003 Stock Option Plan, as amended and restated; and against the four shareholder proposals.

 

If you hold shares in the Comcast Corporation Retirement-Investment Plan and vote, your shares will be voted as you specify on your proxy card. If you hold shares in the Comcast Corporation Retirement-Investment Plan and do not vote, or you sign and return your proxy card without voting instructions, the plan trustee will vote your shares in the same proportion on each matter as it votes shares held in the plan for which voting directions were received. To allow sufficient time for voting by the plan trustee, your voting instructions must be received by May 8, 2009.

Notice of Electronic Availability of Proxy Materials

 

Pursuant to the rules of the Securities and Exchange Commission (“SEC”), we are making this proxy statement and our Annual Report on Form 10-K available to our shareholders electronically via the Internet. Accordingly, in compliance with this e-proxy process, on or about April 3, 2009, we mailed to our shareholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this proxy statement and our Annual Report on Form 10-K via the Internet and how to vote online. As a result, unless otherwise required, you will not receive a copy of the proxy materials unless you request a copy. All shareholders will be able to access the proxy materials on a Web site referred to in the Notice and in this proxy statement and to request to receive a set of the proxy materials by mail or electronically, in either case, free of charge. If you would like to receive a printed or electronic copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice. See “Electronic Access to Proxy Materials and Annual Report on Form 10-K” on page 72 for further information on electing to receive proxy materials electronically. By participating in the e-proxy process, we will save money on the cost of printing and mailing documents to you and reduce the impact of our annual meeting of shareholders on the environment.

 

Matters to be Presented

 

We are not aware of any matters to be presented other than those described in this proxy statement. If any matters not described in this proxy statement are properly presented at the meeting, the proxies will use their own judgment to determine how to vote your shares. If the meeting is postponed or adjourned, the proxies will vote your shares on the new meeting date in accordance with your previous instructions, unless you have revoked your proxy.

 

Revoking a Proxy

 

You may revoke your proxy before it is voted by:

 

 

Attending in Person

 

Attendance at the meeting is limited to shareholders of record and one guest per shareholder. For safety and security reasons, video and audio recording devices and other electronic devices will not be allowed in the meeting. All meeting attendees may be asked to present a valid, government-issued photo identification, such as a driver’s license or passport, before entering the meeting, and attendees will be subject to security inspections.

 

Please bring an admission ticket with you to the meeting. Shareholders who do not present an admission ticket at the meeting will be admitted only upon verification of ownership. An admission ticket is attached to your proxy card. Your Notice of Internet Availability of Proxy Materials will also serve as an admission ticket.

 

Alternatively, if your shares are held in the name of your bank, brokerage firm or other nominee, the voting instruction form received from your bank, brokerage firm or other nominee will also serve as an admission ticket or you may bring to the meeting an account statement or letter from the nominee indicating that you beneficially owned the shares on March 4, 2009, the record date for voting. Such account statement or letter will serve as an admission ticket.

 

Registered shareholders may also request a replacement admission ticket by sending a written request to Comcast Corporation, in care of Broadridge Financial Solutions, Post Office Box 9160, Farmingdale, NY 11735.

Webcast of the Meeting

 

We are pleased to offer an audio webcast of the annual meeting of shareholders. If you choose to listen to the audio webcast of the meeting, you may do so via a link on our Web site at www.cmcsa.com or www.cmcsk.com.

 

Conduct of the Meeting

 

The Chairman of our Board has broad authority to conduct the annual meeting of shareholders in an orderly manner. This authority includes establishing rules of conduct for shareholders who wish to address the meeting, including limiting questions to the order of business and to a certain amount of time. Copies of these rules will be available at the meeting. To ensure that the meeting is conducted in a manner that is fair to all shareholders, the Chairman may also exercise broad discretion in recognizing shareholders who wish to speak, in determining the extent of discussion on each item of business and in managing disruptions or disorderly conduct.

 

Additional Information on the Annual Meeting of Shareholders

 

If you have questions or would like more information about the annual meeting of shareholders, you can contact us in any of the following ways:

 

 

Arthur R. Block, Secretary

Comcast Corporation

One Comcast Center

Philadelphia, PA 19103

 

Contacting Our Board, Board Committees or Directors

 

Our Board has provided a process for shareholders to communicate with its members. Shareholders and other interested parties who wish to communicate with our directors may address their correspondence to the Board, to the Presiding Director, to any other particular director, to the independent or nonemployee directors or to any other group of directors or committee of the Board, in care of Arthur R. Block, Secretary, Comcast Corporation, at the address given above. You may also send an e-mail in care of the Chair of the Audit Committee of the Board by using the following e-mail address: audit_committee_chairman@comcast.com. All such communications are promptly reviewed and, as appropriate, forwarded to either the Board, the relevant committee(s) of the Board or individual or group Board or committee member(s) based on the subject matter of the communication.

 

Corporate Governance

 

Our Board has adopted corporate governance guidelines. These guidelines address items such as the standards, qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, we have a code of ethics and business conduct which applies to all our employees, including our executive officers and our directors. Both the guidelines and the code are posted under the “Governance” section of our Web site at www.cmcsa.com or www.cmcsk.com. The charters of each of the Board’s Audit, Compensation and Governance and Directors Nominating Committees are also posted on our Web site. More information on our Board and its committees can be found beginning on page 11.

 

Outstanding Shares and Voting Rights

 

At the close of business on March 4, 2009, the record date, we had outstanding 2,061,875,000 shares of Class A common stock, 810,251,790 shares of Class A Special common stock and 9,444,375 shares of Class B common stock.

 

On each matter to be voted upon, the holders of Class A common stock and Class B common stock will vote together. As of the record date, each holder of Class A common stock is entitled to 0.1374 votes per share and each holder of Class B common stock is entitled to 15 votes per share. Holders of Class A Special common stock are not entitled to vote at the meeting.

 

All of the information in this proxy statement regarding shares outstanding, per share voting information, shares underlying option and stock awards and option exercise prices reflects the three-for-two stock split in the form of a 50% stock dividend, which was paid on February 21, 2007 to shareholders of record on February 14, 2007. In connection with the stock split, holders of Class A common stock received an additional 0.5 share of Class A common stock for each share held of record on February 14, 2007, and holders of Class A Special common stock and Class B common stock received an additional 0.5 share of Class A Special common stock for each share held of record on February 14, 2007. Each shareholder who owned an odd number of shares immediately before the stock split received cash in lieu of the fractional share to which such shareholder would otherwise have been entitled as a result of the stock split.

 

In order to carry on the business of the annual meeting of shareholders, we must have a quorum. This means that, for each matter presented, shareholders entitled to cast a majority of the votes that all shareholders are entitled to cast on that matter must be represented at the meeting, either in person or by proxy. If the meeting is adjourned for one or more periods aggregating at least five days due to the absence of a quorum, those shareholders who are entitled to vote and who attend the adjourned meeting, even though they do not constitute a quorum as described above, will constitute a quorum for the purpose of electing directors at such reconvened meeting. If the meeting is adjourned for one or more periods aggregating at least 15 days due to the absence of a quorum, shareholders who are entitled to vote and who attend the adjourned meeting, even though they do not constitute a quorum as described above, will constitute a quorum for the purpose of acting on any matter described in this proxy statement other than the election of directors.

 

The director candidates who receive the most votes will be elected to fill the available seats on our Board. Approval of the other proposals requires the favorable vote of a majority of the votes cast. Only votes for or against a proposal count. Abstentions and broker nonvotes count for quorum purposes but not for voting purposes. Broker nonvotes occur on a matter when a bank, brokerage firm or other nominee is not permitted by applicable regulatory requirements to vote on that matter without instruction from the owner of the shares and no instruction is given. Absent instructions from you, your broker may vote your shares on the election of directors and ratification of the appointment of our independent auditors, but may not vote your shares on the approval of our 2002 Employee Stock Purchase Plan, as amended and restated, the approval of our 2002 Restricted Stock Plan, as amended and restated, the approval of our 2003 Stock Option Plan, as amended and restated or the adoption of the four shareholder proposals. In addition, withheld votes in regard to the election of directors count for quorum purposes.

Principal Shareholders

 

This table sets forth information as of March 4, 2009 about persons we know to beneficially own more than 5% of any class of our voting common stock.

 

 

 

 

Security Ownership of Directors, Nominees and Executive Officers

 

This table sets forth information as of February 28, 2009 about the amount of common stock beneficially owned by our current directors (all of whom are also nominees for director), the named executive officers listed in the “Summary Compensation Table for 2008” found on page 49 and our directors and executive officers as a group.

 

 

 

*    Less than 1% of the outstanding shares of the applicable class.

 

 

 

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Our directors and executive officers file reports with the SEC indicating the number of shares of any class of our equity securities they owned when they became a director or executive officer and, after that, any changes in their ownership of our equity securities. These reports are required by Section 16(a) of the Exchange Act. We have reviewed copies of the reports we have and written representations from the individuals required to file the reports. Based on our review of these documents, we believe that all filings required to be made by our reporting persons for the period January 1, 2008 through December 31, 2008 were made on a timely basis, except as follows: restricted share units with respect to shares of Class A Special common stock held by Mr. David L. Cohen, one of our executive officers, which vested on January 2, 2008, were inadvertently not reported in a timely manner. This transaction was subsequently reported on a Form 4. In addition, on July 1, 2008, Mr. Gerald L. Hassell, one of our nonemployee directors, received a grant of shares of Class A common stock, which was inadvertently not reported in a timely manner. This transaction was also subsequently reported on a Form 4.

 

Based on the recommendation of our Board’s Governance and Directors Nominating Committee, our Board has nominated the director candidates named below, all of whom currently serve as our directors. All of our directors are elected annually.

 

If a director nominee becomes unavailable before the annual meeting of shareholders, your proxy authorizes the people named as proxies to vote for a replacement nominee if the Governance and Directors Nominating Committee names one.

 

Our Board has determined that each of our nonemployee directors, other than Mr. Bonovitz, who is married to a first cousin of Mr. Brian L. Roberts, is independent in accordance with the director independence definition specified in our corporate governance guidelines, which are posted under the “Governance” section of our Web site, www.cmcsa.com or www.cmcsk.com, and in accordance with applicable NASDAQ Global Select Market rules. Following the annual meeting of shareholders, if all director nominees are elected to serve as our directors, independent directors will constitute more than two-thirds of our Board. In making its independence determinations, our Board considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates, including those reported under “Related Party Transaction Policy and Certain Transactions” on page 70. In determining that each of our nonemployee directors, other than Mr. Bonovitz, is independent, our Board also considered such transactions and relationships, which it determined did not impair the directors’ independence. The Board considered that the Company and its subsidiaries in the ordinary course of business have during the current and past three fiscal years sold products and services to, and/or purchased products and services from, companies at which some of our directors are currently executive officers or controlling shareholders. In each case, the amount paid to or received from these companies was below 1% of the recipient company’s total consolidated gross revenues, which is far below the 5% limit prescribed by NASDAQ Global Select Market.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

 

Set forth below is information about each of the nominees for director.

 

Brian L. Roberts, 49, has served as a director since March 1988, as our President since February 1990, as our Chief Executive Officer since November 2002 and as our Chairman of the Board since May 2004. As of December 31, 2008, Mr. Roberts had sole voting power over approximately 33% of the combined voting power of our two classes of voting common stock. He is a son of Mr. Ralph J. Roberts. Mr. Roberts is also a director of Comcast Holdings Corporation, a director of the National Cable and Telecommunications Association and Chairman of CableLabs.

 

Ralph J. Roberts, 89, has served as a director since March 1969 and is now Founder and Chairman Emeritus of the Board. He served as the Chair of the Executive and Finance Committee of the Board, now the Finance Committee of the Board, from November 2002 until December 2008. From March 1969 to February 1990, Mr. Roberts served as our President, and from November 1984 to November 2002, he served as our Chairman of the Board. He is the father of Mr. Brian L. Roberts.

 

S. Decker Anstrom, 58, has served as a director since June 2001. From January 2002 to December 2008, Mr. Anstrom served as a director and President and Chief Operating Officer of Landmark Communications, Inc., a privately held multimedia company, the assets of which, prior to September 2008, included The Weather Channel. From August 1999 to December 2001, Mr. Anstrom served as President and Chief Executive Officer of The Weather Channel.

 

Kenneth J. Bacon, 54, has served as a director since November 2002. Mr. Bacon has served as the Executive Vice President of Housing and Community Development at Fannie Mae since July 2005 and as Senior Vice President of Multifamily Investment at Fannie Mae since 2000. From January 2005 to July 2005, he served as the interim Executive Vice President of Housing and Community Development. Mr. Bacon is a member of the Executive Leadership Council, the Real Estate Roundtable and the Urban Land Institute.

Sheldon M. Bonovitz, 71, has served as a director since March 1979. Mr. Bonovitz is currently Chairman Emeritus of Duane Morris LLP. From January 1998 to December 2007, he served as Chairman and Chief Executive Officer of Duane Morris LLP. Mr. Bonovitz is a director of eResearchTechnology, Inc. He is also a trustee of the Dolfinger-McMahon Charitable Trust and the Christian R. and Mary F. Lindbach Foundation and a member of the board of trustees of The Barnes Foundation, The Curtis Institute of Music, the Free Library of Philadelphia Foundation and the Philadelphia Museum of Art. He is a founder of the Foundation for Self-Taught American Artists, is the Foundation’s President and serves on the Foundation’s Board of Trustees.

 

Edward D. Breen, 53, has served as a director since June 2005 and has been our Presiding Director since May 2008. Since July 2002, Mr. Breen has served as Chairman and Chief Executive Officer of Tyco International Ltd. (“Tyco International”). From January 2002 to July 2002, Mr. Breen served as President and Chief Operating Officer of Motorola, Inc.; from January 2001 to January 2002, he served as Executive Vice President and President of Motorola’s Networks Sector; and from January 2000 to January 2001, he served as Executive Vice President and President of Motorola’s Broadband Communications Sector. Mr. Breen is also a director of Tyco International.

 

Julian A. Brodsky, 75, has served as a director since March 1969 and has been an employee of Comcast since 1964. Since May 2004, he has served as our non-executive Vice Chairman. From May 1987 to May 2004, he served as our Vice Chairman. In addition, he is a director of Amdocs Ltd., RBB Fund, Inc. and the Philadelphia Chamber Music Society, a director and Vice Chairman of the Philadelphia Museum of Art and a director emeritus of The Cable Center.

 

Joseph J. Collins, 64, has served as a director since October 2004. Mr. Collins currently serves as the Chairman of Aegis, LLC. From August 2001 to December 2003, he served as Chairman and Chief Executive Officer of AOL Time Warner Interactive Video. From 1989 to August 2001, Mr. Collins served as Chairman and Chief Executive Officer of Time Warner Cable.

 

J. Michael Cook, 66, has served as a director since November 2002. Mr. Cook is a director of Eli Lilly and Company and International Flavors & Fragrances, Inc. and is a Trustee of the Scripps Research Institute. Mr. Cook is also Chairman Emeritus of the board of Catalyst, Chairman of the Accountability Advisory Panel to the Comptroller General of the United States, Chairman of the Department of Defense Audit Advisory Committee, a member of the Advisory Council of the Public Company Accounting Oversight Board (PCAOB) and a member of the Accounting Hall of Fame.

 

Gerald L. Hassell, 57, has served as a director since May 2008. He is President of The Bank of New York Mellon (“BNYM”). Prior to the merger of The Bank of New York Company, Inc. and Mellon Financial Corporation in July 2007, Mr. Hassell was President of The Bank of New York Company, Inc. and The Bank of New York. Mr. Hassell is on BNYM’s Board of Directors. He is also Chairman of the Board of Visitors of The Fuqua School of Business at Duke University, a member of The Financial Services Roundtable and Financial Services Forum, a member of the board of the New York Philharmonic and Vice Chairman of Big Brothers/Big Sisters of New York.

 

Jeffrey A. Honickman, 52, has served as a director since December 2005. He has served since 1990 as the Chief Executive Officer of Pepsi-Cola and National Brand Beverages, Ltd., a bottling and distribution company, which includes among its affiliates Pepsi-Cola Bottling Company of New York and Canada Dry Bottling Companies from New York to Virginia. He is also the Vice President and Secretary of Antonio Origlio Inc., a beverage distributor based in Philadelphia, Pennsylvania, which does business as Origlio Beverages. He currently serves on the board of directors of the American Beverage Association and the Pepsi-Cola Bottlers Association, where he served as Chairman from 1999 to 2001. Mr. Honickman is a member of the board of trustees of Germantown Academy. He also serves on the board of governors of St. Joseph’s University Academy of Food Marketing, the board of trustees of the National Museum of American Jewish History, and the Dean’s Advisory Council of the Drexel University College of Business and Administration.

Dr. Judith Rodin, 64, has served as a director since November 2002. She is President of the Rockefeller Foundation. From 1994 to 2004, Dr. Rodin served as President of the University of Pennsylvania, as well as a professor of psychology and of medicine and psychiatry at the University of Pennsylvania. She also serves as a director of AMR Corporation and Citigroup Inc.

 

Michael I. Sovern, 77, has served as a director since November 2002. Mr. Sovern is Chairman of Sotheby’s. He is also President Emeritus and Chancellor Kent Professor of Law at Columbia University where he served as President for 13 years. He is President and a director of The Shubert Foundation and a director of The Shubert Organization. He is also a director of Sotheby’s.

 

About our Board and its Committees

 

 

 

 

Director Compensation

 

As has been the case for the last several years, in doing its work with respect to determining 2008 nonemployee director compensation, the Compensation Committee directs Mercer to provide analyses with respect to various nonemployee director compensation data. Mercer, however, does not recommend or determine compensation levels or elements. The 2008 nonemployee director compensation program approved by the Compensation Committee is described below.

 

Board and Committee Fees and Equity Awards

 

Directors who are our employees do not receive any fees for their services as directors, including for any service on any Board committee. Each nonemployee director receives a $60,000 annual retainer and $2,500 for each Board meeting or other meeting, except a Board committee meeting as described below, attended in his or her capacity as director or for any other business conducted on our behalf, $2,500 for each Audit, Compensation or Governance and Directors Nominating Committee meeting attended and $1,000 for each Finance Committee meeting attended. The Chair of the Audit Committee receives an additional annual retainer of $20,000, and the Chairs of the Compensation Committee and the Governance and Directors Nominating Committee receive an additional annual retainer of $10,000. Other members of the Audit Committee receive an additional annual retainer of $10,000 and other members of the Compensation Committee and the Governance and Directors Nominating Committee receive an additional annual retainer of $5,000. The Chair of the Finance Committee receives an additional annual retainer of $5,000 and the other members of this committee receive an additional annual retainer of $2,500. Fees received by a director may be deferred in whole or in part under our deferred compensation plans. Up to one-half of the Board annual retainer may be received, at the election of the nonemployee director, in shares of Class A common stock, the receipt of which may be deferred in whole or in part. If deferred, such shares accrue dividend equivalents during the deferral period.

 

Nonemployee directors are reimbursed for travel expenses for meetings attended. Nonemployee directors are provided with our video, high-speed Internet and digital phone services at no cost (if available in the area in which they live) during the time they serve on our Board and for five years thereafter.

 

Each nonemployee director is granted annually, on November 20, share units with respect to shares of Class A common stock having a fair market value on the date of grant of $125,000, the receipt of which may be deferred in whole or in part under our restricted stock plan. If deferred, such shares accrue dividend equivalents during the deferral period. These share units are fully vested on the grant date. It is the practice of our Board to review nonemployee director compensation on a biennial basis.

 

For details regarding director compensation for 2008, see the “Director Compensation for 2008” table on page 69.

 

Director Stock Ownership Policy

 

Our nonemployee director stock ownership policy requires our nonemployee directors to hold a number of shares of our common stock having a value equal to five times the director’s annual cash retainer. Each nonemployee director has a period of five years to reach this ownership requirement. For purposes of this policy, “ownership” is defined to include stock owned directly or indirectly by the director and shares underlying deferred stock units under our deferred stock option plan. In addition, 60% of each of the following types of ownership also count: the market value of the director’s stock fund under our deferred compensation plans, deferred shares under our restricted stock plan and the difference between the market price and exercise price of vested stock options. In determining compliance, the Compensation Committee may take into account any noncompliance that occurs solely or primarily as a result of a decline in the market price of our stock. Our nonemployee director stock ownership policy is posted under the “Governance” section of our Web site at www.cmcsa.com or www.cmcsk.com. All nonemployee directors satisfy the requirements of our stock ownership policy.

 

Transactions Between the Company and our Directors

 

For information regarding our related party transaction policy and details regarding certain related party transactions, please see “Related Party Transaction Policy and Certain Transactions” on page 70.

 

The Audit Committee has appointed Deloitte & Touche LLP to serve as our independent auditors for the fiscal year ending December 31, 2009. We are asking you to ratify this appointment, although your ratification is not required. A representative of Deloitte & Touche LLP will be present at the meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITORS.

 

Set forth below are the fees paid or accrued for the services of Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates in 2008 and 2007.

 

		2008				2007
		(in millions)
Audit fees		$	5.1			$	4.7
Audit-related fees		$	0.5			$	0.5
Tax fees		$	0.4			$	0.4
All other fees		$	0.1				—
		$	6.1			$	5.6

 

Audit fees consisted of fees paid or accrued for services rendered to us and our subsidiaries for the audits of our annual financial statements, audits of our internal control over financial reporting (as required by Section 404 of the Sarbanes-Oxley Act of 2002), reviews of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

 

Audit-related fees consisted primarily of fees paid or accrued for attestation services related to contractual and regulatory compliance.

 

Tax fees consisted of fees paid or accrued for domestic and foreign tax compliance services, including tax examination assistance and expatriate administration and tax preparation. There were no fees paid or accrued in 2008 and 2007 for tax planning.

 

Other fees in 2008 consisted of fees paid or accrued for enterprise risk management consulting services.

 

Preapproval Policy of Audit Committee of Services Performed by Independent Auditors

 

The Audit Committee’s policy requires that the committee preapprove audit and non-audit services performed by the independent auditors to assure that the services do not impair the auditors’ independence. Unless a type of service has received general preapproval, it requires separate preapproval by the Audit Committee. Even if a service has received general preapproval, if the fee associated with the service exceeds $250,000 in a single engagement or series of related engagements or relates to tax planning, it requires separate preapproval. The Audit Committee has delegated its preapproval authority to its Chair.

Report of the Audit Committee

 

The Audit Committee is comprised solely of independent directors meeting the requirements of applicable SEC and NASDAQ Global Select Market rules. The key responsibilities of our committee are set forth in our charter, which was adopted by us and approved by the Board and is posted under the “Governance” section of Comcast’s Web site at www.cmcsa.com or www.cmcsk.com.

 

We serve in an oversight capacity and are not intended to be part of Comcast’s operational or managerial decision-making process. Comcast’s management is responsible for the preparation, integrity and fair presentation of information in the consolidated financial statements, the financial reporting process and internal control over financial reporting. The independent auditors are responsible for auditing the consolidated financial statements and internal control over financial reporting. Our principal purpose is to monitor these processes.

 

In this context, at each regularly scheduled meeting, we met and held discussions with management and the independent auditors. Management represented to us that Comcast’s consolidated financial statements were prepared in accordance with generally accepted accounting principles applied on a consistent basis. We have reviewed and discussed the quarterly and annual earnings press releases and consolidated financial statements with management and the independent auditors. We also discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended, and Rule 2-07 (Communication with Audit Committees) of Regulation S-X.

 

We discussed with the independent auditors the auditors’ independence from Comcast and its management, including the matters, if any, in the written disclosures delivered pursuant to the applicable requirements of the Public Company Accounting Oversight Board. We also considered whether the independent auditors’ provision of audit and non-audit services to Comcast is compatible with maintaining the auditors’ independence.

 

We discussed with Comcast’s internal and independent auditors the overall scope and plans for their respective audits. We met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of Comcast’s internal controls and the overall quality and integrity of Comcast’s financial reporting.

 

Based on the reviews and discussions referred to above, we recommended to the Board, and the Board approved, that the audited financial statements be included in Comcast’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC.

 

We have appointed Deloitte & Touche LLP as Comcast’s independent auditors for 2009.

 

Members of the Audit Committee

 

J. Michael Cook (Chair)

Joseph J. Collins

Jeffrey A. Honickman

Dr. Judith Rodin

 

Our 2002 Employee Stock Purchase Plan was ratified by our Board on November 20, 2002 and approved by our shareholders on each of May 7, 2003 and May 18, 2006. The Employee Stock Purchase Plan is intended to meet the requirements of Section 423 of the Code. Due to the participation of our employees in the plan, the current authorized share pool under the plan is nearly exhausted. As a result, on February 10, 2009, the Compensation Committee approved an amendment to our 2002 Employee Stock Purchase Plan to increase the number of shares available for issuance under the plan from 15,375,000 to 26,500,000.

 

Our Board is asking shareholders to approve the plan as so amended and restated in order to satisfy certain requirements under the Code so that certain tax benefits will be available to our employees. If the plan, as amended and restated, is not approved, we will make the proposed additional 11,125,000 shares available for issuance under the plan, but employees who purchase such shares under the plan will not be eligible to receive favorable tax treatment with respect to such shares. The Company expects that it will seek shareholder approval in the future for additional shares to continue the program.

 

Description of our 2002 Employee Stock Purchase Plan

 

The following is a summary of the material features of the plan, as amended and restated. The following summary does not purport to be complete and is qualified in its entirety by reference to the terms of our 2002 Employee Stock Purchase Plan, which is attached to this proxy statement as Appendix A.

 

Eligibility.  Our full-time employees and full-time employees of our participating subsidiaries are eligible to participate in the plan if the employee has been continuously employed for at least 90 days as of the first day of an offering period. A part-time employee is eligible to participate in the plan if he or she has been continuously employed for at least one year as of the first day of an offering period. Any eligible employee who, after purchasing shares under the plan, would own five percent or more of our stock (by vote or value) is not eligible to purchase additional shares under the plan. Approximately 93,000 employees are currently eligible to participate in the plan.

 

Shares Subject to the Plan.  In the aggregate, 26,500,000 shares of Class A common stock and, with respect to prior offering periods, Class A Special common stock, are available for purchase under the plan, subject to adjustment in the event of certain corporate events. As of the close of business on March 28, 2009, of this aggregate amount, 12,827,998 shares of Class A common stock and 976,117 shares of Class A Special common stock had been issued under the plan. As of the close of business on March 28, 2009, 12,695,885 shares remained available for grant under the plan. Shares deliverable under the plan may consist of either treasury shares or originally issued shares. As of March 4, 2009, the fair market value of a share of Class A common stock and Class A Special common stock was $12.74 and $11.85, respectively.

 

Administration.  The plan is administered by the Compensation Committee. Our Board and the Compensation Committee have the authority to interpret the plan, prescribe, amend and rescind rules and regulations relating to it and make all other determinations deemed necessary or advisable in administering the plan.

 

Adjustments.  In the event that shares are exchanged for a different number or kind of shares of the company through merger, recapitalization, stock dividend, stock split or other similar capital adjustments, the Board or the Compensation Committee will make such adjustments as it deems appropriate. The Board or the Compensation Committee’s determination will be binding for all purposes of the plan.

 

Participation in the Plan.  The plan enables eligible employees to purchase shares during certain offering periods, which generally encompass a calendar quarter. To become a participant in the plan, an eligible employee must file an election form in accordance with the terms and conditions set forth in the plan. On his or her election form, the participant will designate the percentage of eligible compensation (which can be no more than 15% with respect to each offering period) he or she would like to have credited to his or her account under the plan. No participant can have more than $10,000 deducted from his or her compensation in a calendar year. At the end of each offering period, amounts credited to this account will be used to purchase

whole shares. Shares so purchased will be credited to a brokerage account established by us, and cash remaining after such purchase will be credited towards the purchase of whole shares in the next offering period or returned to the participant upon his or her request. The purchase price per share will be 85% of the lesser of the fair market value per share on the first and last days of the offering period.

 

During an offering period, a participant may discontinue his or her participation in the plan by providing a termination form at any time before the end of an offering period; however, a participant may not otherwise modify payroll deductions during an offering period. All amounts then credited to such participant’s account shall be paid as soon as practicable following receipt of the participant’s termination form, and no further payroll deductions will be made with respect to the participant. Upon termination of employment, all amounts credited to a participant’s account will be paid to the participant or his or her successor in interest (in the case of death). Payment to participants terminating participation in the plan or terminating employment shall be made in shares, with respect to whole shares credited to their accounts, and in cash, with respect to any remaining cash amounts credited to their accounts. No interest will be paid with respect to payroll deductions made or amounts credited to any account under the plan.

 

Transferability.  An employee’s rights under the plan may not be transferred or assigned to any other person during the employee’s lifetime. After shares have been issued under the plan and credited to an employee’s brokerage account under the plan, such shares may be assigned or transferred in the same manner as any other shares.

 

Amendment or Termination.  The plan may be amended, modified or terminated by our Board or the Compensation Committee at any time without notice, provided that, upon any termination, all shares or unapplied payroll deductions will be distributed to participants, and provided further, that no amendment will affect the right of a participant to receive his or her proportionate interest in the shares or unapplied payroll deductions. Shareholder approval will be obtained for a plan amendment if it is determined to be required by or advisable under applicable law, regulation or NASDAQ Global Select Market rule.

 

New Plan Benefits.  Because benefits under the plan depend on employees’ elections to participate in the plan and the fair market value of the shares at various future dates, it is not possible to determine future benefits that will be received by executive officers and other employees under the plan. Brian L. Roberts and Ralph J. Roberts, as well as our nonemployee directors, are not eligible to participate in the plan.

 

Federal Income Taxation

 

The following discussion is a summary of the material U.S. federal income tax consequences of participation in the plan (if shareholder approval is obtained).

 

Under the Code, a participant will not realize income at the time the offering period commences or when the shares purchased under the plan are transferred to him or her. If a participant disposes of such shares after two years from the date the offering of such shares commences and after one year from the date of the transfer of such shares to him or her, the participant will be required to include in income, as compensation for the year in which such disposition occurs, an amount equal to the lesser of (1) the excess of the fair market value of such shares at the time of the disposition over the purchase price or (2) the excess of the fair market value of the shares at the commencement of the offering period over the purchase price at such time. The participant’s basis in the shares disposed of will be increased by an amount equal to the amount so includable in his or her income as compensation, and any gain or loss computed with reference to such adjusted basis which is recognized at the time of the disposition should be treated as long-term capital gain or loss. In such event, we will not be entitled to any tax deduction.

 

If a participant disposes of shares purchased under the plan within such two-year or one-year period, the employee will be required to include in income, as compensation for the year in which such disposition occurs, an amount equal to the excess of the fair market value of such shares on the date of purchase over the purchase price. The employee’s basis in such shares disposed of will be increased by an amount equal to the amount includable in his or her income as compensation, and any gain or loss computed with reference to such adjusted basis that is recognized at the time of disposition will be a capital gain or loss, either short-term

or long-term, depending on the holding period for such shares. In the event of a disposition within such two-year or one-year period, we will be entitled to a deduction equal to the amount that the participant is required to include in income as a result of such disposition.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” APPROVAL OF OUR 2002 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED AND RESTATED.

 

Our 2002 Restricted Stock Plan was ratified by our Board on November 20, 2002 and approved by our shareholders on each of May 7, 2003, May 26, 2004, June 1, 2005, May 18, 2006 and May 14, 2008. We have used a substantial portion of the current authorized share pool under the plan for existing awards. As a result, on March 20, 2009, the Compensation Committee approved an amendment to our 2002 Restricted Stock Plan to increase the number of shares available for issuance under the plan from 66,500,000 to 74,000,000, subject to shareholder approval. In addition, on March 20, 2009, our Compensation Committee approved an extension of the expiration date of the plan from May 13, 2018 to May 12, 2019 and approved an amendment to the plan to increase the maximum permitted award under the plan to any individual in any calendar year from 1,500,000 to 2,000,000 RSUs or restricted shares.

 

The Board believes that the increased number of shares available for issuance under the plan represents a reasonable amount of potential additional equity dilution and allows the Company to continue awarding equity incentives, which are an important component of our compensation program as discussed in “Compensation Discussion and Analysis — Elements and Mix of Our Compensation Program — Equity Based Incentive Compensation” on page 42. The Company expects that it will seek shareholder approval in the future for additional shares to continue the program.

 

Key Aspects of our 2002 Restricted Stock Plan

 

The following sets forth key aspects of the plan. A summary of the material features of the plan is provided in “Description of our 2002 Restricted Stock Plan” below.

 

 

 

In accordance with applicable NASDAQ Global Select Market rules and to satisfy certain requirements under the Code, our Board is asking shareholders to approve the plan as so amended and restated. If the plan, as amended and restated, is not approved, we will not be able to make the proposed additional 7,500,000 shares available for issuance under the plan, we will not increase the maximum permitted annual award under the plan to 2,000,000 RSUs or restricted shares, and the plan will expire on May 13, 2018; the plan will otherwise remain in effect.

 

Description of our 2002 Restricted Stock Plan

 

The following is a summary of the material features of the plan, as amended and restated. The following summary does not purport to be complete and is qualified in its entirety by reference to the terms of our 2002 Restricted Stock Plan, which is attached to this proxy statement as Appendix B.

 

Types of Awards.  Awards of RSUs and restricted stock may be granted under the plan. However we have not granted, nor do we currently intend to grant, any restricted stock awards under the plan. Awards of RSUs are units valued by reference to shares of common stock that entitle a participant to receive, upon the settlement of the unit, one share for each unit. Awards of restricted stock are shares of common stock that are awarded subject to such restrictions on transfer as the Compensation Committee or Board may establish.

 

Eligibility.  Our employees and employees of our participating subsidiaries, as well as our nonemployee directors, are eligible to receive awards under the plan. Based on the Compensation Committee’s current grant guidelines, the number of employees, including the Company’s named executive officers, currently eligible to participate in the plan is approximately 10,000 and there are currently ten nonemployee directors. Currently, no individual may be awarded more than 1,500,000 RSUs or restricted shares in any calendar year. Under the amended plan, no individual may be awarded more than 2,000,000 RSUs or restricted shares in any calendar year.

 

Shares Subject to the Plan.  The aggregate maximum number of shares that may be issued pursuant to awards under the plan is currently 66,500,000 shares (which shares may be either shares of Class A common

stock or shares of Class A Special common stock), subject to adjustment in the event of certain corporate events. Under the amended plan, such number of shares is 74,000,000. As of the close of business on March 28, 2009, of the current aggregate amount, approximately 37,176,000 shares of Class A common stock and 10,058,000 shares of Class A Special common stock had been issued or reserved for issuance under the plan. As of the close of business on March 28, 2009, approximately 27,634,000 RSUs were outstanding under the plan and 19,266,000 RSUs remained available for grant under the plan. Under the amended plan, such number of available RSUs would be approximately 26,766,000. Shares issued under the plan may be either treasury shares or originally issued shares. Rights to receive shares forfeited pursuant to the terms of an award will be available again for grant under the plan. As of March 4, 2009, the fair market value of a share of Class A common stock and Class A Special common stock was $12.74 and $11.85, respectively.

 

Term of the Plan.  Currently, no awards may be granted under the plan after May 13, 2018. Under the amended plan, no awards may be granted under the plan after May 12, 2019.

 

Administration.  The plan is administered by the Compensation Committee. This committee has authority to determine who is eligible to participate in the plan, select individuals to whom awards will be granted, interpret the plan and prescribe and amend rules and regulations relating to the plan. The Compensation Committee may delegate to one of our officers or a committee of two or more of our officers its discretion under the plan to make grants of awards to any eligible employee, provided, however, that grants to any named executive officer who is listed in the “Summary Compensation Table for 2008” on page 49 and any other executive officer subject to the short-swing profit recapture rules of the Exchange Act will be made by the Compensation Committee and grants to any other individual who, at the time of grant, has a base salary of $500,000 or more or holds a position with us of Senior Vice President or higher will be subject to approval by the Compensation Committee or a committee consisting of the Chairman of the Compensation Committee and one or more officers appointed by the Compensation Committee. Our Board is responsible for granting awards to nonemployee directors.

 

Terms of Awards.  The Compensation Committee determines the terms and conditions of each award granted to employee participants, including the vesting and settlement terms applicable to RSUs, as well as the restrictions applicable to shares underlying awards of restricted stock and the dates these restrictions lapse and the award vests. When an award vests, we deliver to the recipient a certificate for the number of shares without any legend or restrictions (except as necessary to comply with applicable state and federal securities laws).

 

The Compensation Committee may condition the vesting of any award of RSUs or restricted shares upon the satisfaction of performance targets or goals as described below. The Compensation Committee is authorized to establish Company-wide, division-wide or individual goals, which may be quantitative performance standards or qualitative performance standards. The quantitative performance standards include financial measurements such as revenue, income, expense, operating cash flow, free cash flow, numbers of customers of or subscribers for various services and products offered by us or one of our divisions, customer service measurements and other objective financial or service-based standards relevant to our business as may be established by the Compensation Committee. The qualitative performance standards may include, but are not limited to, customer satisfaction, management effectiveness, workforce diversity and other qualitative performance standards relevant to our business. For each calendar year, annual performance goals will be established by the Compensation Committee by no later than the 90th day of the year. Performance goals that are not annual will be established within the first quarter of the start of the applicable performance period. After the close of the calendar year, the Compensation Committee will also determine whether the performance goals have been satisfied. For a further discussion of our performance goals see “Compensation Discussion and Analysis,” which begins on page 37. In addition, the Compensation Committee may condition the vesting of an award based on the satisfaction of performance standards as it may determine to be appropriate, whether or not previously designated as a performance standard. To date, only our named executive officers, including Mr. Block beginning in 2009, have been granted performance-based awards.

 

The terms and conditions of each award of share units granted to a nonemployee director are determined under our 2002 Non-Employee Director Compensation Plan, which is administered by our Board and which

was filed as an exhibit to our Annual Report on Form 10-K for 2008. Our 2002 Non-Employee Director Compensation Plan provides that on each November 20, our Board will grant an award of share units to each nonemployee director having a fair market value of $125,000 on the date of grant. Nonemployee directors are also eligible to receive awards of share units upon commencement of service with us. These awards will have a fair market value ranging from $31,250 to $125,000 on the date of grant, depending on the date the nonemployee director commences service with us. Each award of share units is fully vested on the grant date.

 

Termination of Employment.  Except as otherwise provided in an applicable award or employment or other agreement, upon termination of employment, all awards that are then still subject to restrictions or that have not vested will be forfeited.

 

Deferral.  Each recipient of an award who qualifies under the terms of the plan has the right to defer and re-defer to a specified date the receipt of shares that may, subject to an award, vest in the future. Upon vesting, deferred shares are credited to a bookkeeping account. An award recipient who has elected to defer the receipt of shares may also make a “diversification election,” which has the effect of causing a designated portion of the bookkeeping account to be treated as if it were invested in an interest-bearing account.

 

Withholding.  Unless otherwise determined by the Compensation Committee, tax liabilities incurred by employees in connection with the grant of an award or upon its vesting or settlement will be satisfied by our withholding a portion of the shares subject to the award that have a fair market value approximately equal to the minimum amount of taxes required to be withheld by us under applicable law. Subject to certain conditions specified in the plan, a recipient of an award may elect to have taxes withheld in excess of the minimum amount required to be withheld or may satisfy his or her tax withholding in cash.

 

Adjustments.  The aggregate number of shares under the plan, the class of shares as to which awards may be granted and the number of shares covered by each outstanding award are subject to adjustment in the event of a stock dividend, recapitalization or certain other corporate transactions.

 

Terminating Events.  In the event of our liquidation or a change in control of the Company effected through a transaction or series of transactions in which an unaffiliated third party acquires share ownership such that this party has the ability to direct the management of the Company, as determined by our Board in its sole discretion, the Compensation Committee may provide that upon consummation of such an event, any outstanding awards will vest in full or in part or that all RSUs or restricted stock that have been previously deferred will be transferred to the recipient.

 

Amendment or Termination.  The plan may be amended by our Board or the Compensation Committee and may be terminated by our Board at any time, provided that no award will be affected by any amendment or termination without the written consent of its recipient. Shareholder approval will be obtained for a plan amendment if it is determined to be required by or advisable under applicable law, regulation or NASDAQ Global Select Market rules.

New Plan Benefits.  Future grants of awards of RSUs or restricted stock, if any, that will be made to eligible employees are subject to the discretion of the Compensation Committee and, therefore, are not determinable at this time. The following table reflects awards of RSUs granted in 2008.

 

2008 Restricted Stock Unit Grants under our 2002 Restricted Stock Plan

 

 

Federal Income Taxation

 

The following discussion is a summary of the material U.S. federal income tax consequences of RSUs granted under the plan.

 

Generally, the grant of an award of RSUs is not a taxable event. The recipient of the award will recognize ordinary compensation income in each year in which the units are settled in an amount equal to the fair market value of the shares of common stock received. A recipient’s basis for determining gain or loss on a subsequent disposition of these shares of common stock will be the amount the recipient must include in income when the units vest and are settled. Any gain or loss recognized on a disposition of the shares of common stock generally will be short-term or long-term capital gain or loss, depending on the length of time the recipient holds the shares.

 

A recipient who makes a proper election to defer the settlement of RSUs will not recognize income with respect to the units until the end of the deferral period. At the end of the deferral period, the recipient will recognize ordinary compensation income equal to the fair market value of the shares of common stock issued at that time.

 

Subject to Section 162(m) of the Code and our satisfaction of applicable reporting requirements, at the time income is recognized by a named executive officer who is a recipient of an RSU award, we will be entitled to a corresponding deduction. Under Section 162(m) of the Code, the deduction is available if, among other reasons, the compensation constitutes qualified performance based compensation. One requirement to be qualified performance based compensation is that the material terms of the performance goal or goals under which the compensation will be paid must be disclosed to and approved by the Company’s shareholders before the compensation is paid. In addition, if the Compensation Committee has authority to change the targets under a performance goal or goals after shareholder approval, the material terms of the performance goal or goals must be disclosed to and reapproved by shareholders no later than the first shareholder meeting that occurs in the fifth year following the year in which shareholder approval was previously received. We received such reapproval on May 14, 2008, and expect to do so again periodically in the future.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” APPROVAL OF OUR 2002 RESTRICTED STOCK PLAN, AS AMENDED AND RESTATED.

 

Our 2003 Stock Option Plan was adopted by our Board on February 26, 2003 and approved by our shareholders on each of May 7, 2003 and May 14, 2008. We have used a substantial portion of the current authorized share pool under the plan for existing awards. As a result, on March 20, 2009, the Compensation Committee approved an amendment to the plan to increase the number of shares available for issuance under the plan from 139,000,000 to 189,000,000, subject to shareholder approval. In addition, on March 20, 2009, the Compensation Committee approved an extension of the expiration date of the plan from May 13, 2018 to May 12, 2019.

 

On March 20, 2009, the Compensation Committee also approved amendments to the plan providing that: (i) all nonqualified stock options granted under the plan must be granted with an exercise price equal to at least the fair market value of a share on the date of grant, which conforms to our existing practice with respect to the exercise price of such options; (ii) beginning on January 1, 2009, shares not issued or delivered as a result of the net settlement of an outstanding option, shares used to pay the exercise price or withholding taxes related to an outstanding option and shares repurchased on the open market with the proceeds of the option exercise price may no longer be added back to the aggregate number of shares available for issuance under the plan; and (iii) per share cash payment amounts for all tandem cash rights granted under the plan must be limited to not more than the fair market value of a share at the time of exercise over the fair market value of a share on the date of grant.

 

The Board believes that the increased number of shares available for issuance under the plan represents a reasonable amount of potential additional equity dilution and allows the Company to continue awarding equity incentives, which are an important component of our compensation program as discussed in “Compensation Discussion and Analysis — Elements and Mix of Our Compensation Program — Equity Based Incentive Compensation” on page 42. The Company expects that it will seek shareholder approval in the future for additional shares to continue the program.

 

Key Aspects of our 2003 Stock Option Plan

 

The following sets forth key aspects of the plan. A summary of the material features of the plan is provided in “Description of our 2003 Stock Option Plan” below.

 

 

 

In accordance with applicable NASDAQ Global Select Market rules, our Board is asking shareholders to approve the plan as so amended and restated. If the plan, as amended and restated, is not approved, we will not be able to make the proposed additional 50,000,000 shares available for issuance under the plan and the plan will expire on May 13, 2018, but the plan will otherwise remain in effect.

 

Description of our 2003 Stock Option Plan

 

The following is a summary of the material features of the plan, as amended and restated. The following summary does not purport to be complete and is qualified in its entirety by reference to the terms of our 2003 Stock Option Plan, which is attached to this proxy statement as Appendix C.

 

Types of Awards.  The plan provides for the grant of options to purchase shares. Options granted may be incentive stock options as defined under Section 422(b) of the Code (“ISOs”). Options which do not qualify as ISOs and are referred to as nonqualified stock options (together with ISOs, “Options”) may also be granted under the plan. The plan also provides for the grant of tandem cash rights, which are rights to receive a cash payment of an amount per share determined by the Compensation Committee and specified in the Option document, in lieu of exercising a nonqualified stock option. The tandem cash right cash payment amount per share is limited to not more than the fair market value of a share at the time of exercise over the fair market value of a share on the date of grant. Although provided for under the plan, we have not granted, nor do we currently intend to grant, any such tandem cash rights under the plan. Individuals who receive Options are referred to as “Optionees.”

 

Eligibility.  Our employees and employees of our participating subsidiaries, as well as our nonemployee directors, are eligible to receive Options under the plan. Employees other than officers are eligible to receive cash rights under the plan. ISOs may only be granted to employees of the Company and its subsidiaries.

Based on the Compensation Committee’s current grant guidelines, the number of employees, including the Company’s named executive officers, currently eligible to participate in the plan is approximately 10,000 and there are currently ten nonemployee directors. The maximum number of shares for which Options may be granted to any single individual in any calendar year is 15,000,000 shares, subject to adjustment in the event of certain corporate events.

 

Shares Subject to the Plan.  The aggregate number of shares that may be issued under the plan is currently 139,000,000 shares of Class A common stock, subject to adjustment in the event of certain corporate events. Under the amended plan, such number of shares is 189,000,000. As of the close of business on March 28, 2009, of this aggregate amount, approximately 117,106,000 shares had been issued or reserved for issuance under the plan. As of the close of business on March 28, 2009, approximately 21,894,000 Options remained available for grant under the plan. Under the amended plan, such number of available Options would be approximately 71,894,000. Shares deliverable under the plan may consist of either treasury shares or originally issued shares. If an Option granted under the plan expires or terminates without having been exercised in full, the shares subject to such Option will be available again for grant under the plan. Beginning on January 1, 2009, the following shares may not again be made available for issuance under the plan: (i) shares not issued or delivered as a result of the net settlement of an outstanding option, (ii) shares used to pay the exercise price or withholding taxes related to an outstanding option, or (iii) shares repurchased on the open market with the proceeds of the option exercise price. As of March 4, 2009, the fair market value of a share of Class A Common Stock was $12.74.

 

Term of the Plan.  Currently, the plan will terminate no later than May 13, 2018. Under the amended plan, the plan will terminate no later than May 12, 2019.

 

Administration.  The plan is administered by the Compensation Committee or any other committee or subcommittee designated by the Board, provided such committee or subcommittee is composed of two or more nonemployee members of the Board, each of whom is an “outside director” within the meaning of the Code. Currently, the Compensation Committee administers the plan. The Compensation Committee may delegate to one of our officers or a committee of two or more of our officers its discretion under the plan to make grants of awards to any eligible employee, provided, however, that grants to any named executive officer who is listed in the “Summary Compensation Table for 2008” on page 49 and any other executive officer subject to the short-swing profit recapture rules of the Exchange Act will be made by the Compensation Committee and grants to any other individual who, at the time of grant, has a base salary of $500,000 or more or holds a position with us of Senior Vice President or higher will be subject to approval by the Compensation Committee or a committee consisting of the Chairman of the Compensation Committee and one or more officers appointed by the Compensation Committee.

 

The Compensation Committee has the authority to interpret the terms of the plan and make and amend rules relating to the plan. It also has the authority to select individuals to whom awards will be granted, to determine the terms and conditions of awards (other than the terms and conditions of Options granted to nonemployee directors, which terms will be determined by the Board) and to determine the number of shares issuable upon exercise of each Option. Under certain circumstances, the Compensation Committee may have the power to accelerate the exercise date of outstanding Options.

 

Exercise Price.  The exercise price for each Option will be determined by the Compensation Committee, but will not be less than 100% of the fair market value of a share on the date of grant for any Option. If an ISO is granted to a 10% shareholder of the Company, the exercise price will be at least 110% of the fair market value of a share on the date of grant.

 

Method of Exercise.  Options will be exercisable in such manner as determined by the Compensation Committee. Payment of the exercise price for an Option may be made in cash; by certified check; by delivering or attesting to shares which meet the conditions specified in the plan; or, with respect to Options granted on or after February 28, 2007 and certain Options granted prior to February 28, 2007, by cashless exercise.

Limits on Exercisability.  No Option will be exercisable after the expiration of ten years from the date an Option is granted (five years with respect to an ISO held by an Optionee who is a 10% shareholder of the Company). Options will be exercisable at such times as determined by the Compensation Committee, but generally an Option will expire on the first to occur of: (i) 90 days after the date of a termination of employment for any reason other than disability, death or “Cause” (as defined in the plan); provided that the Compensation Committee may specify in the document governing the Option that an Option may be exercisable during a longer period after the Optionee ceases to be an employee, but in no event later than the expiration of the Option term specified in such document; (ii) one year after the date of termination of employment due to death or disability; or (iii) termination of employment for “Cause.” In the event of a termination for “Cause,” in addition to immediate termination of the Option, the Optionee, upon a determination by the Compensation Committee, will forfeit all shares resulting from the exercise of an Option for which the Company has not yet delivered stock, upon refund by the Company of the exercise price of the Option.

 

Cash Rights.  As described above, the plan provides that the Compensation Committee may, in its sole discretion, give an Optionee the right to receive a cash payment of an amount per share determined by the Compensation Committee and specified in the Option document, in lieu of exercising a nonqualified stock option. Such rights are subject to the same vesting, expiration and transferability terms as the Options to which they are attached. Cash rights may only be granted in connection with Options and may not be exercised separately. Officers are not eligible to receive cash rights under the plan.

 

Transferability.  In general, Options are not transferable by the Optionee except by will or by the laws of descent and distribution, and, during the lifetime of the Optionee, Options may be exercised only by the Optionee. However, the plan provides that the Compensation Committee may, in its discretion, provide that Options may be transferred to a Family Member (as defined in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933) of the Optionee, provided that such transfer is without consideration.

 

Termination of Employment.  Except as otherwise provided in an applicable award or employment or other agreement, upon termination of employment, all awards that are then still subject to restrictions or that have not vested will be forfeited.

 

Withholding.  Unless otherwise determined by the Compensation Committee, generally any tax liabilities incurred by employees in connection with the exercise of a nonqualified stock option will be satisfied by the Company’s withholding a portion of the shares underlying the Option that have a fair market value approximately equal to the minimum amount of taxes required to be withheld by the Company under applicable law. Subject to certain conditions specified in the plan, an Optionee may elect to have taxes withheld in excess of the minimum amount required to be withheld or may satisfy his or her tax withholding in cash. Tax liabilities incurred in connection with the exercise of an ISO will be satisfied by the Optionee’s payment to the Company of an amount in cash equal to all taxes required to be withheld, unless otherwise determined by the Compensation Committee.

 

Adjustments.  In the event that shares are exchanged for a different number or kind of shares of the Company through merger, recapitalization, stock dividend, stock split or other similar capital adjustments, the Board will make such adjustments as it deems appropriate. The Board’s determination will be binding for all purposes of the plan. The Board or Compensation Committee may not reduce the exercise price of an outstanding Option without shareholder approval, except as described in this paragraph.

 

Terminating Events.  In the event of the liquidation of the Company or a change in control of the Company effected through a transaction or series of transactions in which an unaffiliated third party acquires share ownership such that this party has the ability to direct the management of the Company, as determined by the Board in its sole discretion, the Compensation Committee may provide that the Option will become exercisable in full or the Company may provide that an Optionee must exercise any then-exercisable Options or forfeit such Options.

 

Amendment or Termination.  The plan may be amended by our Board or the Compensation Committee and may be terminated by our Board at any time, provided that amendments to change the class of individuals

eligible to receive ISOs, extend the expiration date of the plan, decrease the minimum exercise price of an ISO or increase the maximum number of shares for which Options may be granted (other than as a result of adjustments due to certain corporate events) are not effective unless shareholder approval is obtained within twelve months before or after such action. Shareholder approval will also be obtained for a plan amendment if it is determined to be required by or advisable under applicable law, regulation or NASDAQ Global Select Market rules.

 

New Plan Benefits.  Future grants of Options, if any, that will be made to eligible employees are subject to the discretion of the Compensation Committee and, therefore, are not determinable at this time. The following table reflects awards of Options granted in 2008.

 

2008 Option Grants under our 2003 Stock Option Plan

 

 

Federal Income Taxation

 

The following discussion is a summary of the material U.S. federal income tax consequences of Options granted under the plan.

 

Nonqualified Options.  The grant of a nonqualified option will not be a taxable event. The Optionee generally will recognize ordinary income upon exercise of the nonqualified Option, in an amount equal to the excess of the fair market value of the shares received at the time of exercise (including option shares withheld by the Company to satisfy tax withholding obligations) over the exercise price of the nonqualified Option, and the Company will be allowed a deduction in this amount.

 

Upon disposition of the shares received upon exercise, the Optionee will recognize long-term or short-term capital gain or loss, depending upon the length of time he or she held such shares. The amount of long-term or short-term capital gain or loss recognized by the Optionee upon disposition of the shares will be an amount equal to the difference between the amount realized on the disposition and the Optionee’s basis in the shares (which basis is ordinarily the fair market value of the shares on the date the Option was exercised).

 

Special tax rules may apply if an Optionee uses previously owned shares to pay the exercise price of an Option.

 

Incentive Stock Options.  Neither the grant nor the exercise of an ISO will be a taxable event, except that the alternative minimum tax may apply at the time of exercise.

 

The Optionee will recognize long-term capital gain or loss on a disposition of shares acquired upon exercise of an ISO provided the Optionee does not dispose of such shares within two years from the date the ISO was granted and within one year after the shares were transferred to the Optionee. For purposes of

determining such gain or loss, the Optionee’s basis in such shares will, in general, be the exercise price of such Option. If the Optionee satisfies both of the holding periods described above, then the Company will not be allowed a deduction by reason of the exercise of the ISO.

 

If the Optionee disposes of the shares acquired upon exercise before satisfying the holding period requirements discussed above (a “disqualifying disposition”), his or her gain recognized on the disqualifying disposition will be taxed as ordinary income to the extent of the difference between the fair market value of the shares on the date of exercise and exercise price of such Option, and the Company will be entitled to a deduction in this amount. The gain (if any) in excess of the amount recognized as ordinary income on a disqualifying disposition will be long-term or short-term capital gain, depending upon the length of time the recipient held the shares.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” APPROVAL OF OUR 2003 STOCK OPTION PLAN, AS AMENDED AND RESTATED.

 

We received the following four shareholder proposals. The proponent of each proposal has represented to us that the proponent has continuously held at least $2,000 in market value of Class A common stock for at least one year and will continue to hold these securities through the date of the annual meeting of shareholders. To be voted upon at our 2009 annual meeting of shareholders, the proponent of a proposal, or a representative of the proponent qualified under Pennsylvania law, must attend the meeting to present the proposal.

 

For each of the shareholder proposals, other than adding a brief title for the proposal, we have included the proposal and shareholder’s supporting statement exactly as we received it. Following each proposal, we explain why our Board recommends a vote AGAINST the proposal.

 

PROPOSAL 6:  TO IDENTIFY ALL EXECUTIVE OFFICERS WHO EARN
IN EXCESS OF $500,000

 

The following proposal and supporting statement were submitted by Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Suite 215, Washington, DC 20037, who has advised us that she holds 500 shares of Comcast common stock.

 

RESOLVED: “That the shareholders recommend that the Board take the necessary steps that Comcast specifically identify by name and corporate title in all future proxy statements those executive officers, not otherwise so identified, who are contractually entitled to receive in excess of $500,000 annually as a base salary, together with whatever other additional compensation bonuses and other cash payments were due them.”

 

REASONS: “In support of such proposed Resolution it is clear that the shareholders have a right to comprehensively evaluate the management in the manner in which the Corporation is being operated and its resources utilized.” “At present only a few of the most senior executive officers are so identified, and not the many other senior executive officers who should contribute to the ultimate success of the Corporation.” “Through such additional identification the shareholders will then be provided an opportunity to better evaluate the soundness and efficacy of the overall management.”

 

“Last year the owners of 13,065,387 shares, representing approximately 3.8% of shares voting, voted FOR this proposal.”

 

“If you AGREE, please mark your proxy FOR this proposal.”

 

Company Response to Shareholder Proposal

 

The Company complies with all regulatory disclosures regarding the compensation of its executives. The “Executive Compensation — Compensation Discussion and Analysis” on page 37 of this proxy statement

details our objectives in determining executive compensation and the various compensation methods used to accomplish those objectives. This proxy statement discloses in great detail the compensation of several of our most highly compensated employees.

 

Our Board exercises great care and discipline in disclosing executive compensation. We do not believe that the disclosure called for by this proposal will enhance our governance practices or improve communications with shareholders, nor is it in the best interests of our shareholders. In addition, Comcast must continue to recruit the best talent. Prospective employees may be dissuaded from accepting a position with Comcast if they know their compensation will be made public. In particular, high quality executive talent with the experience and capabilities sought by us is scarce. The proposal, if implemented, could provide competitors with detailed compensation information not otherwise available that they may use in seeking to recruit talented employees from us. Our competitors do not make this information available and the risk associated with disclosing this information is not outweighed by any negligible benefit that might be gained from it.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

 

PROPOSAL 7:  TO OBTAIN SHAREHOLDER APPROVAL OF CERTAIN FUTURE DEATH

BENEFIT ARRANGEMENTS

 

The following proposal and supporting statement were submitted by the AFL-CIO Reserve Fund, 815 Sixteenth Street, N.W., Washington, DC 20006, which has advised us that it holds 2,116 shares of Comcast common stock.

 

RESOLVED: The shareholders of Comcast Corporation (the “Company”) urge the board of directors to adopt a policy of obtaining shareholder approval for any future agreements and corporate policies that would obligate the Company to make payments, grants, or awards following the death of a senior executive in the form of salary, bonuses, accelerated vesting of awards or benefits, or the continuation of unvested equity grants, perquisites and other payments or benefits in lieu of compensation. This policy would not affect compensation that the executive earns and chooses to defer during his or her lifetime.

 

Supporting Statement

 

We support a compensation philosophy that motivates and retains talented executives and that ties their pay to the long-term performance of the Company. We believe that such an approach is needed to align the interests of executives with those of shareholders.

 

“Golden coffin” agreements, however, provide payment without performance, after an executive is dead. Companies claim that these agreements are designed to retain executives. But death defeats this argument. “If the executive is dead, you’re certainly not retaining them,” said Steven Hall, a compensation consultant.” (The Wall Street Journal, 6/10/2008)

 

Senior executives have ample opportunities to provide for their estate by contributing to a pension fund, purchasing life insurance, voluntarily deferring compensation, or through other estate planning strategies. Often, these services are provided by or subsidized by the company. We see no reason to saddle shareholders with payments made without receiving any services in return. Peter Gleason, chief financial officer of the National Association of Corporate Directors, calls “golden coffin” arrangements a “bad idea.” (Financial Week, 6/16/2008)

 

The problem is well illustrated at our Company. In its 2008 proxy, the Company estimated that the heirs of Chairman and CEO Brian Roberts would receive posthumous benefits valued at more than $75 million on December 31. This includes salary and cash bonus for five years valued at more than $60 million, and the accelerated vesting of unearned stock options valued at more than $14 million. Mr. Roberts’ heirs would also receive $223 million from company-subsidized life insurance.

Consequently, we request that the Company adopt a policy of providing shareholders with a vote on agreements that would provide payments or awards after a senior executive’s death and are unrelated to services rendered to the Company. We believe that such a shareholder approval requirement may induce restraint when parties negotiate such agreements.

 

Prior shareholder approval may not always be practical to obtain, and this proposal provides the flexibility to seek approval or ratification after the material terms are agreed upon.

 

We urge shareholders to vote FOR this proposal.

 

Company Response to Shareholder Proposal

 

We oppose adoption of this proposal because our Board believes that it is in the best interest of the Company for our Compensation Committee to retain the flexibility to determine appropriate compensation packages for our senior executives without seeking shareholder approval.

 

As to the proponent’s references to Mr. Brian L. Roberts, our Chairman and Chief Executive Officer, as part of a one year extension of his employment agreement, Mr. Roberts has elected to relinquish his right to base salary and annual cash bonus continuation for up to five years following his death, as well as his right to continued Company-paid premium reimbursements and tax payments in connection with life insurance policies. (It also should be noted that the death benefit amount under Mr. Roberts’ life insurance policies is paid by the insurers, not the Company.) This agreement eliminates the most significant type of death benefit (base salary and bonus continuation) that some commentators have characterized as inappropriate because it is not related to service to the Company.

 

As a general matter, our Compensation Committee, composed exclusively of independent directors, has a process for establishing appropriate executive compensation packages that are in the best interests of our shareholders and which responsibly achieve the purpose of motivating and retaining the best executives in order to maintain Comcast’s competitiveness. Additionally, our Compensation Committee is best positioned, with access to independent experts, to exercise discretion and to make decisions with respect to executive compensation that are in the best interests of Comcast and its shareholders. Our Compensation Committee devotes considerable time and effort to this process.

 

As discussed more fully in the “Executive Compensation — Compensation Discussion and Analysis” on page 37 of this proxy statement, our Compensation Committee annually reviews our compensation philosophy, the executive compensation programs and the performance of our named executive officers. Fixing individual compensation terms involves a host of factors and judgments and preserving the Company’s ability to attract and retain a highly qualified and effective management team requires Comcast to consider the circumstances of individual officers or officer candidates and to adapt to fast-moving trends in the marketplace, such as the fact that a majority of chief executive officers of Fortune 100 companies receive some form of life insurance or death benefits. The requirement that shareholders approve any specific compensation arrangement in the future may create inconsistencies in compensation packages among peer executives, would involve considerable expense and delay, and would impair the ability of our Compensation Committee to perform its duties by reducing the flexibility it may need to attract, motivate and retain exceptional senior executives.

 

Finally, our Compensation Committee does not view the acceleration of vesting of stock options and RSUs upon Mr. Roberts’ death as being in the same category as additional compensation. The options and RSUs were granted during Mr. Roberts’ employment on account of prior years’ service and the full value thereof (included the unvested portions) are fully disclosed in each year’s proxy statement’s compensation tables. Moreover, the acceleration of unvested stock options and RSUs on death remains a common feature in large company plans.

 

For these reasons, our Board believes that it is in our shareholders’ best interests that the responsibility for such future compensation decisions to be vested in our Compensation Committee, without the requirement of shareholder approval.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

PROPOSAL 8:  TO ADOPT AN ANNUAL VOTE ON EXECUTIVE COMPENSATION

 

The following proposal and supporting statement were submitted by Mr. Vincent Smith, 109 Ringneck Ct., Gibsonia, PA 15044-7971, who has advised us that he holds Comcast common stock with a market value in excess of $2,000.

 

RESOLVED, that the shareholders of Comcast Corporation request that the board of Directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the “SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis). The proposal submitted to shareholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.

 

Supporting Statement

 

Investors are increasingly concerned about mushrooming executive compensation especially when insufficiently linked to performance. In 2008, shareholders filed close to 100 “Say on Pay” resolutions. Votes on these resolutions have averaged 43% in favor, with ten votes over 50%, demonstrating strong shareholder support for this reform.

 

An Advisory Vote establishes an annual referendum process for shareholders about senior executive compensation. We believe the results of this vote would provide the board and management useful information about shareholder views on the company’s senior executive compensation.

 

In its 2008 proxy, Aflac submitted an Advisory Vote resulting in a 93% vote in favor, indicating strong investor support for good disclosure and a reasonable compensation package. Daniel Amos, Chairman and CEO said, “An advisory vote on our compensation report is a helpful avenue for our shareholders to provide feedback on our pay-for-performance compensation philosophy and pay package.”

 

To date ten other companies have agreed to an Advisory Vote, including Verizon, MBIA, H&R Block, Ingersoll Rand, Blockbuster, and Tech Data. TIAA-CREF, the country’s largest pension fund, has successfully utilized the Advisory Vote twice.

 

Influential proxy voting service RiskMetrics Group recommends votes in favor, noting: “RiskMetrics encourages companies to allow shareholders to express their opinions of executive compensation practices by establishing an annual referendum process. An advisory vote on executive compensation is another step forward in enhancing board accountability.”

 

The Council of Institutional Investors endorsed advisory votes and a bill to allow annual advisory votes passed the House of Representatives by a 2-to-1 margin. We believe company leaders should adopt an Advisory Vote voluntarily before required by law.

 

We believe that existing U.S. Securities and Exchange Commission rules and stock exchange listing standards do not provide shareholders with sufficient mechanisms for providing input to boards on senior executive compensation. In contrast, in the United Kingdom, public companies allow shareholders to cast a vote on the “directors’ remuneration report” which discloses executive compensation. Such a vote isn’t binding, but gives shareholders a clear voice that could help shape senior executive compensation.

 

We believe that a company that has a clearly explained compensation philosophy and metrics, reasonably links pay to performance, and communicates effectively to investors would find a management sponsored Advisory Vote a helpful tool.

 

We urge Comcast’s board to allow shareholders to express their opinion about senior executive compensation through an Advisory Vote.

Company Response to Shareholder Proposal

 

Our Board believes that its Compensation Committee has a process for establishing executive compensation which rewards executives for results that are consistent with shareholder interests and which responsibly achieves the purpose of attracting, motivating and retaining the best executives in order to maintain our competitiveness.

 

Our Compensation Committee is composed of independent directors, who meet on a regular basis to review and approve executive compensation plans and policies as well as equity and other benefit plans. As discussed more fully in the “Executive Compensation — Compensation Discussion and Analysis” on page 37 of this proxy statement, our Compensation Committee annually reviews our compensation philosophy, the executive compensation programs and the performance of our named executive officers.

 

In each of our businesses, human capital is a primary driver of profitability and competitive advantage. Based on input from consultants and a review of competitive benchmark data, among other things, our Compensation Committee believes that the current structure, with its emphasis on performance-based elements, is appropriately balanced and competitive to accomplish the crucial task of attracting, motivating and retaining talented senior executives in the highly competitive industries in which the Company does business. Our Compensation Committee also believes these policies motivate executives to contribute to our overall future success, thereby enhancing our value for the benefit of all shareholders.

 

In addition, we are concerned that adopting this proposal and subjecting our compensation policies to an advisory vote without any assurance that the compensation policies of other public companies, particularly our industry peers, would be subject to similar shareholder scrutiny could put the Company at a competitive disadvantage.

 

Further, the Board also believes that an annual vote is unnecessary since we already provide shareholders with efficient and meaningful methods of communicating with our Board and Compensation Committee. As discussed on page 3 under “Contacting Our Board, Board Committees or Directors,” shareholders and other interested parties may directly communicate with members of the Board, including members of our Compensation Committee. We believe that direct communication between shareholders and the Board is a much more effective and reliable method of expressing support or criticism of our executive compensation practices.

 

Our Board always exercises great care and discipline in determining and disclosing executive compensation. We do not believe the advisory vote called for by this proposal will enhance our governance practices or improve communications with shareholders, nor that it is in the best interests of our shareholders. Indeed, it may very well constrain our efforts to attract, motivate and retain exceptional senior executives to focus on our long-term performance and results.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

PROPOSAL 9:  TO ADOPT A RECAPITALIZATION PLAN

 

The following proposal and supporting statement were submitted by the Communications Workers of America Members’ Pension Fund, 501 Third Street, N.W., Washington, DC 20001-2797, which has advised us that it holds Comcast common stock with a market value in excess of $2,000.

 

RESOLVED: The shareholders request that the Board of Directors take the steps that may be necessary to adopt a recapitalization plan that would provide for all of the Company’s outstanding stock to have one vote per share.

 

Supporting Statement

 

Comcast’s capital structure gives Brian Roberts a disproportionate percentage of shareholder votes. He had one third of the votes at the 2008 Annual Meeting as the beneficial owner of all of Comcast’s 9.44 million shares of Class B common stock, which has 15 votes per share.

 

In contrast, Comcast’s 2.047 billion shares of Class A common have two-thirds of the aggregate voting power. For 2007, each Class A share was entitled to just “.1384 votes.”

 

A report prepared for Morgan Stanley Investment Management by Davis Global Advisors “concludes that such a structure puts the interests of the controlling family over those of other investors” (New York Times, Nov. 4, 2006). Louis Lowenstein has observed that dual-class voting stocks eliminate “checks or balances, except for fiduciary duty rules that reach only the most egregious sorts of behavior” (1989 Columbia Law Review pp. 979, 1008). He also contends that “they allow corporate control to be seized or retained by corporate officers or insiders” (What’s Wrong with Wall Street, p.193 (1988)).

 

The danger of such disproportionate voting power is illustrated, we believe, by the recent criminal convictions of former executives of Adelphia Communications and Hollinger International. Like Comcast, each of those companies had capital structures that gave disproportionate voting power to one or more insiders and thereby reduced accountability.

 

Comcast’s capital structure may also hinder acquisitions of companies that are governed on the one share-one vote principle. It could inhibit efforts to raise additional capital, because some persons, like Nell Minow, the editor of The Corporate Library, “would never buy or recommend non-voting or limited voting stock” (USA Today, May 17, 2004).

 

With a market capitalization of approximately $59 billion, Comcast may be the largest public company with disparate voting rights. In our view, this large capitalization magnifies the danger to investors that arises from a capital structure that gives Mr. Roberts one-third of the votes with Class B stock that would represent less than 1 percent of the aggregate voting power if all of that stock was converted to Class A common.

 

At the 2007 Annual Meeting, this proposal won more than 29.8 percent of the votes cast for and against. This is a truly astonishing number since each Class B share has 109 times the voting power of a Class A share. If voting were conducting under the principle of 1 share, 1 vote, this proposal would have received over 74 percent of the vote!

 

Raytheon, Readers Digest, Church & Dwight, Fairchild Semiconductor, and other companies have recently eliminated stocks with disparate voting rights in order to provide each share of their common stock with a single vote. We believe Comcast should also take this step in order to better align the voting power of shareholders with their economic interests.

 

Company Response to Shareholder Proposal

 

Our dual class voting structure has existed since we went public in 1972, has been separately approved by our Class A shareholders in 1982 and 1984 and has been consistently disclosed in our SEC filings. Before our AT&T Broadband acquisition in November 2002, Mr. Brian L. Roberts beneficially owned stock representing approximately 87% of the combined voting power of all of our stock. In connection with that transaction, Mr. Roberts agreed to reduce his voting interest to a 331/3% non-dilutable interest. At the AT&T shareholders

meeting relating to that transaction, the AT&T shareholders not only approved the transaction as a whole, but also separately approved the governance terms of that transaction, which approval was a condition to completing the transaction. In fact, approximately 92% of the AT&T shareholders voting on the governance proposal voted to approve it.

 

Our Board believes that our historical success is owed in large part to the respected and stable leadership provided by Messrs. Ralph J. Roberts and Brian L. Roberts. Through their leadership and focus on long-term growth, we have a proven track record for creating shareholder value and building a strong and innovative company. We have enjoyed long-term growth in our stock value and our shares have outperformed the S&P 500 by a margin of more than two to one since we went public in 1972. Our Board believes that Messrs. Roberts have been, and will continue to be, crucial to the long-term success of our business and position of financial strength. The Board has evaluated our capital structure on numerous occasions and believes that the stability provided by the structure gives the Company greater ability to focus on long-term interests than might otherwise be the case and, accordingly, is in the best interests of the Company and its shareholders.

 

Our Board also believes that our history of being able to successfully raise capital for acquisitions and our other business needs provides evidence that the dual class voting structure does not impair our ability to raise additional capital or acquire other companies. Further, dual class voting structures are found in many other public companies, including First Amendment speaker media companies such as Viacom, CBS and the Washington Post, as well as other leading companies like Berkshire Hathaway, Google and UPS.

 

Finally, under Pennsylvania law and our Articles of Incorporation, no recapitalization that affects the voting rights of our Class B common stock can be effected without the separate approval of Mr. Brian L. Roberts, as beneficial owner of our Class B common stock.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

 

This discussion and analysis describes our executive compensation philosophy, process, plans and practices, and gives the context for understanding and evaluating the more specific compensation information contained in the tables and related disclosures that follow.

 

Overview of Our Compensation Program Philosophy and Process

 

We are the nation’s leading provider of cable services, offering a variety of entertainment, information and communications products and services. As of December 31, 2008, we served approximately 24.2 million video customers, 14.9 million high-speed Internet customers and 6.5 million phone customers, making us the nation’s largest video services provider, largest residential high-speed Internet provider and third-largest residential wireline phone provider. We operate our businesses in a very competitive, highly regulated and rapidly changing and complex technological environment. Our strategy of differentiating our products and services requires us to continuously improve the quality and value of our offerings by consistently introducing new and advanced features, products and services. Our customer base and market capitalization, as well as our annual capital expenditure and total debt levels, rank us among the largest companies in our industries and in the country. We sell our services primarily to consumers, exposing our revenues to the risks of the significant and continuing decline in consumer spending and demand that has resulted from the current economic crisis.

 

Our ability to attract and retain the highest caliber executive talent in the marketplace is a key to continuing our long-term track record of strong financial performance, particularly in light of the above-described extraordinary challenges facing our businesses. We have been recognized within our industries as having one of the best and most stable senior management teams of any company over the years. Our compensation practices are a major factor in our success in attracting and retaining the talent necessary to achieve our goals.

 

Consistent with this view of our position in the business landscape, the great importance we place on the quality and consistency of our senior management in achieving results that build long-term shareholder value and the significance we attach to using compensation as a tool in talent management, we seek to offer those types and amounts of compensation that will serve to attract, motivate and retain the most highly qualified executive officers and key employees and provide these employees with the opportunity to build a meaningful ownership stake in our Company.

 

The Compensation Committee is responsible for approving the nature and amount of compensation paid to, and the employment and related agreements entered into with, our executive officers; and, for all of our employees, overseeing our cash bonus and equity-based plans, approving guidelines for grants of awards under these plans and determining and overseeing our compensation and benefits policies generally.

 

Each year the Compensation Committee reviews the nature and amounts of all elements of the named executive officers’ compensation, both separately and in the aggregate, using comprehensive tally sheets that include the current value of outstanding stock option and RSU awards (as compared to their grant date value) and deferred compensation account balances. The Compensation Committee also reviews compensation data from peer groups and surveys and takes into account our prior year performance (including as compared to the prior year performance of our peer groups). The Compensation Committee reviews each element of each named executive officer’s compensation for internal consistency.

 

In determining individual compensation, the Compensation Committee assesses each named executive officer’s responsibilities and roles with respect to overall corporate policy-making, management, operations and administration, and the importance of retaining the executive. The Compensation Committee also evaluates the named executive officer’s prior year performance, both in terms of his contribution to the Company’s performance and as compared to his individual performance goals (as to the latter item, each year the Compensation Committee agrees on specific factors to be used in evaluating Mr. Brian L. Roberts, our Chairman and Chief Executive Officer).

The Compensation Committee’s goals in this process are to ensure that both total compensation and its individual components are strongly competitive with respect to the companies in our peer groups, that there is a significant portion of total compensation that is performance based and that there is an appropriate balance in performance-based compensation between a short-term cash component and long-term equity-based components.

 

Following these reviews and assessments, and with these goals in mind, the Compensation Committee determines what it believes to be an appropriate current year compensation package for each named executive officer. This process is subjective and involves the exercise of discretion and judgment. While the Compensation Committee considers the various quantitative data described in this discussion and analysis, it does not use a mathematical or other formula in which stated factors or their interrelationship are quantified and weighted (either in general or as to each named executive officer).

 

As has been the case for the last several years, in doing its work with respect to determining 2008 compensation, the Compensation Committee directs management on the scope of work to be completed by Mercer, the Company’s compensation consultant, which includes providing analyses with respect to various compensation data. Mercer, however, does not recommend or determine compensation levels or elements, performance targets or totals, or compensation plan design. Each year, the Compensation Committee reviews our various engagements of Mercer and its affiliates (and the related fees) to assure itself of Mercer’s independence with respect to this work. In November 2008, the Compensation Committee engaged Independent Compensation Committee Adviser, LLC as an independent consultant to assist with respect to the Compensation Committee’s 2009 compensation deliberations by reviewing Mercer’s work and providing recommendations for additional analyses.

 

Our Named Executive Officers for 2008

 

Our named executive officers for 2008 are Mr. Brian L. Roberts, Mr. Michael J. Angelakis (our Executive Vice President and Chief Financial Officer), Mr. Stephen B. Burke (our Executive Vice President, Chief Operating Officer and President of our Cable Division), Mr. David L. Cohen (our Executive Vice President), and Mr. Arthur R. Block (our Senior Vice President, General Counsel and Secretary).

 

As disclosed in footnote (10) to the “Summary Compensation Table for 2008” on page 51, Mr. Ralph J. Roberts was elected Founder and Chairman Emeritus of our Board (in lieu of his prior position as Chair of the Executive and Finance Committee of our Board, now the Finance Committee of our Board) in December 2008 and continues as a director and employee of the Company. Although he was not an executive officer at December 31, 2008, Mr. Roberts’ 2008 compensation is required to be disclosed in the Summary Compensation Table and subsequent tables (because under SEC rules his 2008 compensation would have qualified him as a named executive officer had he remained an executive officer on December 31, 2008). For this reason, we include Mr. Roberts’ 2008 compensation in this discussion and analysis.

 

Mr. Block has not previously been a named executive officer, nor was it known at the time of the Compensation Committee’s deliberations with respect to his 2008 compensation that Mr. Block would be a named executive officer for 2008 (since the need to identify an additional named executive officer for 2008 did not arise until following Mr. Ralph J. Roberts’ change in status in December 2008). Accordingly, where indicated below, certain references in this discussion and analysis to matters relating to named executive officers do not apply to Mr. Block. However, the Compensation Committee did review and approve Mr. Block’s compensation for 2008 (as it does for executive officers other than the named executive officers). The results of the Compensation Committee’s process in this regard are described below.

 

Use of Compensation and Performance Data

 

The Compensation Committee uses data disclosed in SEC filings and contained in available surveys to inform its judgment, by comparing (i) our compensation levels to those of named executive officers of our competitors for executive talent, customers and capital and (ii) our financial performance to that of the same competitors.

We believe that these competitors are comprised of companies both in as well as outside the cable and communications industries, resulting in a broader range of companies than those with which we are often compared by analysts and others for stock performance purposes (in which the focus is only on competition for capital). For example, the companies with which the Compensation Committee compares named executive officer compensation levels is a broader group than the companies included in the peer group index in the stock performance graph contained in our Annual Report on Form 10-K.

 

The Compensation Committee determines the peer groups to be used for compensation and performance purposes based on information and analysis provided by Mercer. The Compensation Committee has found it difficult to find a single peer group (having a meaningful number of companies) that reflects our prominence in our industries and the size, scope, complexity and variety of our businesses. The Compensation Committee concluded that three separate groups of companies each represented one or more meaningful aspects of our profile, and that it would not be useful to consolidate these companies into a single peer group because the practices and outcomes that are unique to each group would be lost. Accordingly, as in the last several years, the following peer groups were used in 2008 as sources for comparative compensation and performance data: companies in the entertainment/media industry (CBS Corporation, News Corporation, Time Warner Inc., Viacom Inc. and The Walt Disney Company), the communications industry (ALLTEL Corporation, AT&T Inc., DIRECTV Group, Inc., Qwest Communications International Inc., Sprint Nextel Corporation, Time Warner Inc. and Verizon Communications Inc.) and “general industry” companies having comparable revenues and total market capitalization (3M Company, Abbott Laboratories, American Express Credit Corporation, Amgen Inc., Apple Inc., The Bear Stearns Companies, Inc., Bristol-Myers Squibb Company, Cisco Systems, Inc., The Coca-Cola Company, The Walt Disney Company, Intel Corporation, Kraft Foods Inc., Lehman Brothers Holdings Inc., Eli Lilly & Company, Merck & Co. Inc., MetLife, Inc., News Corporation, Oracle Corporation, Pepsico, Inc., Pfizer Inc., Tyco International Ltd., US Bancorp, United Technologies Corporation, United Parcel Service, Inc., Wachovia Corporation, Washington Mutual Inc., Wells Fargo & Company and Wyeth). Each year Mercer reviews the composition of the peer groups based upon merger activity and other changes in size or lines of business.

 

Among the three peer groups, the Compensation Committee pays particular attention to the entertainment/media peer group because of its special relevance with respect to competition for executive talent. The business expertise of employees in that industry is highly correlated to the needs of the Company: the principal business of the Company is content distribution (meaning the Company is one of the world’s largest buyers and licensors of content) and the Company also owns and manages several program and sports networks, one of the largest broadband Internet portals and several entertainment based Internet sites (meaning that it is a substantial seller and producer of content as well). It is also increasingly the case that traditional content providers in the entertainment/media industry are looking for new ways to distribute content, both directly to consumers through the Internet and indirectly through alliances with wireless companies and video distributors. For these same reasons, our executives are attractive candidates to entertainment/media companies, in addition to such companies’ executives being attractive to us.

 

Comparisons for Mr. Brian L. Roberts were made to peer chief executive officers. Comparisons for Mr. Angelakis were made to peer chief financial officers and by ordinal rank (i.e., the position in the Summary Compensation Table). Comparisons for Mr. Burke were made to peer chief operating officers and by ordinal rank. Comparisons for Mr. Cohen were made by ordinal rank and, where available, to peer chief administrative officers. Beginning in 2008, comparisons for Mr. Ralph J. Roberts are not relevant because (as described below) he no longer receives annual discretionary compensation (i.e., base salary, cash bonus or equity grants).

 

As a result of its strong belief in the importance of using compensation as a tool to attract and retain the best senior executives, in reviewing peer group data the Compensation Committee’s reference point for the communications and general industry peer groups was the 75^th percentile. Because of the smaller number of companies in the entertainment/media peer group, percentile analysis was not meaningful. The Compensation Committee examined each entertainment/media peer group company individually to determine a general competitive level of compensation in that peer group. The compensation we deliver varies among the groups,

and the individual companies within a group, in its relationship to the reference points. Our named executive officers’ total compensation for 2008 exceeded the reference points in most cases.

 

As a secondary means to inform its judgment, the Compensation Committee reviewed a Mercer compensation survey analysis in which base salary, total cash compensation (base salary plus target annual cash bonus) and total compensation (total cash compensation plus equity-based compensation) for each named executive officer was measured against published compensation survey data for functionally comparable positions among general industry companies of similar size to the Company. Survey data reflects a very broad view of companies across industry lines but with revenue sizes that are within a range close to that of the Company, providing a focus on compensation data for comparable job functions. In all cases, our named executive officers’ total compensation was above the 75^th percentile of the market.

 

Results of the peer group and survey analyses indicating named executive officer compensation levels above the reference points is consistent with the Compensation Committee’s view, stated above, of the primary importance of attracting and retaining the best executive talent in the marketplace.

 

In determining total compensation levels for the named executive officers, the Compensation Committee also considered our prior year performance. Despite the weakening economy and intensifying competition, in 2007 the Company delivered very healthy growth in revenue and operating cash flow, added substantial numbers of customers, generated meaningful free cash flow and returned significant capital to shareholders through stock repurchases. In addition, the Compensation Committee noted that we achieved these results while continuing the successful management of our balance sheet, allowing us liquidity and access to capital when needed during the year, while avoiding any near or medium-term risk associated with debt repayment requirements.

 

With respect to comparative financial performance, Mercer conducted an analysis of our performance relative to the three peer groups described above using various financial metrics as well as total shareholder return, in each case over one year and longer periods of time. In general, the Compensation Committee’s expectation is that Company performance as compared to its peers over time should be consistent with its highly competitive compensation philosophy. The results of this analysis in 2008 varied, depending upon the performance measure, peer group and time frame used. Overall, the Compensation Committee concluded that our compensation is aligned with our performance.

 

The results of the peer group, compensation survey and performance analyses are considered important by the Compensation Committee. However, the Compensation Committee does not make any determination of or change to compensation in reaction to market data alone, but rather uses this information as one of the several considerations to inform its judgment and put its experience in context in determining compensation levels.

 

Elements and Mix of Our Compensation Program

 

Our executive compensation program for our named executive officers includes the following key components: cash base salary; annual (short-term) cash bonus (which is performance based because earning the bonus is contingent upon the achievement of performance goals); and long-term equity-based compensation in the form of stock options (which are performance based because stock options provide no value without future stock price appreciation) and RSUs (which are performance based both because the ultimate value of any shares acquired upon vesting depends on our stock price and because vesting of RSUs is dependent upon achievement of a performance goal). In addition, named executive officers are eligible to participate in our deferred compensation plan, as well as in employee benefit plans that are generally available to all employees. These elements are the same as or similar to those used by most of our peer group companies and many other public companies. Within this general marketplace-defined environment, we have our own perspective on the relative importance and value of each element.

We view the executive compensation program on a “portfolio” basis. The various elements work together to achieve our objectives. This chart illustrates our view of the portfolio:

 

 

Each element of our compensation program is described in more detail as follows:

 

Base Salary.  This element of compensation is necessary to attract and retain any employee in any organization. As the basic fixed element of the compensation package, it serves as a baseline measure of an employee’s value. Base salary is annually guaranteed compensation received by a named executive officer in exchange for investing his career with us.

 

Each of our named executive officers has an employment agreement, effective during 2008, that provides for an initial base salary and annual increases in base salary at the discretion of the Compensation Committee. Mr. Block’s employment agreement, also effective during 2008, provides for an initial base salary and minimum annual base salary increases of 5%. The employment agreements do not permit base salary reductions. In establishing the initial base salary level at the time the agreements were signed, the Compensation Committee considered job responsibilities, job performance, seniority and market data on base salary levels from peer group companies and compensation surveys. The Compensation Committee also reviewed base salary based on internal comparisons of executives relative to their responsibilities. Increases during the term of the agreement are generally based on individual performance, the levels of achievement of our performance goals during the tenure of the executive and any increase in duties and responsibilities placed on the executive as a result of our continuing and significant growth. Beginning as of February 15, 2008, Mr. Ralph J. Roberts receives an annual base salary of one dollar. The named executive officers other than Mr. Block have elected not to receive any base salary increase for 2009.

 

Cash Bonus Incentive Compensation.  Our cash bonus plan, which was approved by our shareholders at the 2006 annual meeting, provides a variable element to annual cash compensation that in 2008 was tied directly to consolidated operating cash flow and free cash flow results. This element is needed to complete a competitive total annual cash compensation package. However, it is at risk for performance — the full target bonus is not paid unless there is 100% achievement of the goals and no bonus is paid unless a predetermined minimum increase in each performance goal is achieved. This plan puts a significant amount of annual cash compensation at risk and supports our objective that our named executive officers balance achieving satisfactory or better current year (short-term) results with long-term value creation.

 

The target bonus under our cash bonus plan in 2008 for each of the named executive officers (excluding Mr. Ralph J. Roberts, who no longer receives an annual cash bonus) was based on the Compensation Committee’s assessment of the optimal mix of base salary and annual cash bonus compensation. In addition, each named executive officer’s employment agreement provides for a minimum target bonus. In 2008, such target bonus, as a percentage of base salary, was as follows: Mr. Brian L. Roberts, 300%; Mr. Angelakis, 300%; Mr. Burke, 300%; Mr. Cohen, 125%; and Mr. Block, 100%. The differences in target bonus percentages are the result of the Compensation Committee’s determination of each named executive officer’s total compensation and its judgment as to how to optimally allocate that total among the various elements thereof.

 

For 2008, the Compensation Committee determined that annual cash bonus target achievement for the named executive officers (other than Mr. Block) would be based 80% on operating cash flow and 20% on free

cash flow. For the several prior years, the sole performance goal was operating cash flow. The Compensation Committee believed that adding free cash flow as a performance goal provided an appropriate focus on additional items (such as capital expenditures and working capital) that can be affected by the decision making of our named executive officers. The importance of operating cash flow and free cash flow as performance metrics is described in more detail below under “Emphasis on Performance,” on page 45. Neither our Board nor the Compensation Committee has the discretion to award cash bonus compensation to our named executive officers under our plan absent attainment of the performance goals.

 

For 2008, the Compensation Committee established the following goals for year-over-year increases in consolidated operating cash flow: if we achieved an increase of 4.2% or less, the executive would receive no bonus on account of this performance goal; if we achieved an increase of greater than 4.2% to 9.2% or less, the executive would receive 50% to 90% of target bonus; if we achieved an increase of greater than 9.2% to 10.2% or less, the executive would receive 100% of target bonus; and if we achieved an increase of greater than 10.2%, the executive would receive greater than 100% of target bonus (up to a maximum of 140% at a greater than 13.2% increase). The Compensation Committee established the following goals for achievement of free cash flow: if we achieved $2.5 billion or less, the executive would receive no bonus on account of this performance goal; if we achieved greater than $2.5 billion to $3 billion or less, the executive would receive 50% to 90% of target bonus; if we achieved greater than $3 billion to $3.2 billion or less, the executive would receive 100% of target bonus; and if we achieved greater than $3.2 billion, the executive would receive greater than 100% of target bonus (up to a maximum of 130% at greater than $3.4 billion). Based on 2008 achievement of 90% for operating cash flow and 130% for free cash flow, the named executive officers (other than Mr. Block) were entitled to receive 98% of their respective target amounts. However, putting this achievement level in the context of lower levels of annual cash bonus achievement in 2008 by certain operating management (whose cash bonuses are based in large part on business unit operating metrics rather than consolidated financial performance), the named executive officers (other than Mr. Block) have elected to accept only 89% of their target amounts.

 

For 2008, the Compensation Committee determined that annual cash bonus target achievement for Mr. Block would be based 70% on operating cash flow (on the same basis as described in the paragraph above), 20% on management and diversity goals (on the basis that from 0% to 175% on account of these goals may be earned in the judgment of the Compensation Committee based on the recommendation of management) and 10% on individual performance goals (on the basis that from 0% to 200% on account of these goals may be earned in the judgment of the Compensation Committee based on the recommendation of management). Based on 2008 achievement levels, Mr. Block was entitled to receive 89% of his target amount.

 

Equity-Based Incentive Compensation.  Our equity-based long-term incentive compensation program is the compensation link between the named executive officers’ decision making and the long-term outcomes of those decisions. As described in more detail below under “Emphasis on Long-Term Stock Ownership — Vesting of Equity-Based Incentive Compensation,” on page 46, our vesting schedules require a relatively long holding period before a meaningful portion of the equity-based compensation can be realized, allowing time to see the results of the decisions, and the market time to react to the results, as well as providing a greater potential retention value.

 

The Compensation Committee believes that a strong reliance on long-term equity-based compensation is advantageous because this type of compensation fosters a long-term commitment by executive employees and motivates them to improve the long-term market performance of our stock. The Compensation Committee currently employs a diversified approach to this component, which means that the Company grants both stock options and RSUs, whereby each type of award generally represents approximately 50% of the total equity award by grant date value, as determined on a Black-Scholes basis in the case of stock options and using the closing price of a share of our Class A common stock in the case of RSUs.

 

RSUs in combination with stock options promote our goal of retention, as well as provide a direct and predictable alignment to share price. Because each RSU is equal in value to a share of our Class A common stock, the units have value, subject to the satisfaction of vesting requirements, when the stock price is flat or even declining. On the other hand, stock options only have value when the stock price increases. This

combination of equity-based awards is appropriate in the view of the Compensation Committee because it (i) provides some level of incentive even during periods of general market or industry decline, when good or better Company performance may not be reflected in our stock price, and (ii) supports our culture of entrepreneurship and its focus on shareholder value creation while providing a strong retention vehicle.

 

The substantial drop in the market price of the Company’s common stock in 2007 significantly reduced the value of outstanding equity-based awards of the named executive officers, reflecting the relationship between compensation and shareholder value that is provided by these long-term equity-based compensation elements. The Compensation Committee did not take into account the substantially reduced “in the money” value of vested and unvested stock options (nor the substantially reduced value of unvested RSUs) in making its compensation decisions for 2008.

 

Primarily to conform to Internal Revenue Service requirements relating to the deductibility of compensation, beginning in 2005 the Compensation Committee added a performance condition to RSUs granted to our named executive officers. For the grants made in 2005, 2006 and 2007, the RSUs vest each year only if we achieve specified consolidated operating cash flow growth goals for that year. For the grants made in 2008, the RSUs vest each year if we have achieved the goals in that year or in any prior year under the grant. For each year of these grants, the Compensation Committee established the following operating cash flow growth goals: if we achieved a 5% to 6.9% increase, the executive would receive 66% of the service vested portion of the awards; and if we achieved a 7% or greater increase, the executive would receive 100% of the service vested portion of the awards. The operating cash flow growth goal necessary to achieve 100% vesting has been achieved in each year from 2005 through 2008. Neither our Board nor the Compensation Committee has the discretion to vest these RSUs absent attainment of the performance goals.

 

In general, the total value of equity-based compensation is based on a proportional relationship to the expected cash compensation of each named executive officer, taking into account grants made at the same time to other executives, as well as the value of equity-based compensation awarded to comparable named executive officers at peer companies. The value of 2008 equity-based compensation (using grant date values), expressed as a percentage of 2008 base salary, was 369% for Mr. Brian L. Roberts, 368% for Mr. Angelakis, 368% for Mr. Burke, 360% for Mr. Cohen and 163% for Mr. Block. The value of 2008 equity-based compensation, expressed as a percentage of the value of 2007 equity-based compensation, was 97% for Mr. Brian L. Roberts, 126% for Mr. Angelakis, 97% for Mr. Burke, 97% for Mr. Cohen and 97% for Mr. Block (the grant date value of equity-based compensation generally has not increased over the last several years).

 

Our equity-based grants in 2008 to our named executive officers (excluding Mr. Ralph J. Roberts, who no longer receives equity-based grants) were made as part of our annual “management grant” program in which all eligible employees receive grants. No other grants were made to our named executive officers in 2008. In general, we also make stock option and RSU awards to eligible employees in connection with significant employment events such as hiring, promotion and entering into an employment agreement.

 

Deferred Compensation.  We maintain a deferred compensation plan that allows employees having base salary above a certain level, including the named executive officers, to defer the receipt of cash compensation (i.e., base salary and annual bonus), as described under “Nonqualified Deferred Compensation in and as of 2008 Fiscal Year End” on page 60. In addition, the employment agreements of Messrs. Brian L. Roberts, Angelakis, Burke and Cohen provide for specified amounts to be contributed to the named executive officer’s deferred compensation plan account for each year of the agreement. The contractually required contributions were agreed upon as a result of arm’s-length negotiations with the named executive officers and viewed by the Compensation Committee as a reasonable component part of overall compensation, especially from a retention perspective. The Compensation Committee reviewed each named executive officer’s plan balance at December 31, 2007 and annually reviews the embedded and projected costs of this plan as well as a corporate-owned life insurance program designed to mitigate these costs.

 

Other than the deferred compensation plan (and a tax-qualified defined contribution (i.e., 401(k)) plan), we do not offer any pension or other defined benefit-type plans to the named executive officers, except for a legacy contractually committed supplemental executive retirement plan, or SERP, benefit to Mr. Ralph J.

Roberts described in the following paragraph. In lieu of a defined benefit-type plan, which is found among several of our peer group companies, our deferred compensation plan provides a simple, transparent tax-efficient vehicle for long-term value accumulation. The plan is one of our primary tools to attract and retain our named executive officers. In a similar manner to a traditional defined benefit executive retirement plan, the plan’s retention incentive gets stronger as the plan balance grows (because the crediting rate is reduced following a termination of employment).

 

Mr. Ralph J. Roberts is eligible to receive benefits under a legacy SERP plan, which became effective in 1989. Beginning as of February 15, 2008, however, and pursuant to his request, Mr. Roberts receives an annual base salary of one dollar, and his annual cash bonus and additional stock option and RSU grants were eliminated.

 

Also, our restricted stock plan permits recipients of grants to defer delivery of shares to a later date, without any guaranteed return on the vesting date value. In other words, any deferred shares, when later delivered, would have a value equal to the market value of our stock at that time. Mr. Ralph J. Roberts has deferred delivery of shares under this provision. In addition, the plan permits recipients who have deferred delivery to elect to diversify up to 40% of the value of their deferred account into a cash equivalent account with an annual rate of return of 8%.

 

Insurance Benefits.  In 2008, we continued to provide Messrs. Brian L. Roberts and Ralph J. Roberts with premium reimbursements and tax payments under pre-existing contractual arrangements with respect to certain life insurance policies, as described under “Agreements with Our Named Executive Officers” on pages 61 and 63, and “Potential Payments Upon Termination or Change in Control” on pages 64 and 66. In the case of Mr. Brian L. Roberts, these arrangements were put in place beginning in 1992. In the case of Mr. Ralph J. Roberts, these arrangements were put in place beginning in 1987 and in part reflect compensation in exchange for Mr. Roberts’ relinquishment of a potential bonus benefit in 1993. At these times, these insurance benefits were viewed by the Compensation Committee as an appropriate component of a comprehensive compensation program for our then president or chief executive officer. On February 13, 2009, Mr. Brian L. Roberts elected to relinquish his right to these benefits, effective January 1, 2009.

 

Perquisites.  Before 2006, we provided a limited amount of additional compensation through certain personal benefits to ease the demands on senior executives (including travel) and to provide security to our named executive officers and their families. Beginning in 2006, our named executive officers have been required to pay us for any benefits that would otherwise be considered perquisites.

 

We also provide tax related payments to Messrs. Brian L. Roberts and Ralph J. Roberts in connection with certain of the life insurance benefits described above, as well as minor amounts of tax related payments for the benefit of the named executive officers (in each case as described in footnote (7) to the Summary Compensation Table on page 50).

 

Payments in Connection with a Change in Control.  We generally do not have any benefits that are “triggered” automatically as a result of a “change in control” of the Company (a “single trigger”) or the occurrence of one or more specified events (a “double trigger”) that may follow a change in control, such as termination of employment without cause. Instead, our Board will determine whether it is appropriate to accelerate the vesting of stock options and/or RSUs, as applicable, or provide other benefits in connection with a change in control. There has been no determination of any guiding principles or factors that our Board may in the future use in determining the propriety of accelerating the vesting of stock options and/or RSUs, or providing other benefits, in connection with a change in control.

 

Mr. Brian L. Roberts’ employment agreement provides that if his employment is terminated following a change in control, that termination will be treated as a termination without cause for the purpose of determining his benefits in those circumstances under his employment agreement.

 

Mr. Ralph J. Roberts’ expired employment agreement provides a continuing right, at his election in the event of a change in control, to cause us to fund a grantor trust in an amount equal to our unfunded benefit obligations to Mr. Roberts. Because of the change in control of the Company that occurred at the time of our AT&T Broadband acquisition in 2002, Mr. Roberts currently has this right, but has not exercised it.

The Compensation Committee approved these provisions in these employment agreements as fair and reasonable protections for our current Chief Executive Officer and founder, respectively, in the event of a change in control.

 

Payments in Connection with a Termination of Employment.  Payments to our named executive officers upon a termination of employment are described under “Potential Payments upon Termination or Change in Control” on page 63. These compensation arrangements are contained in each named executive officer’s employment or other agreements and are not a factor in the Compensation Committee’s determination of current year compensation elements. These arrangements were arrived at as a result of arm’s-length negotiations in connection with entering into each such agreement, based on the Compensation Committee’s decision that it was appropriate to provide more favorable arrangements than those offered to non-executive employees upon termination of employment. Prior to February 13, 2009, Mr. Brian L. Roberts’ spouse or his or her estate had the right, following Mr. Roberts’ death, to receive continued payment of base salary and annual cash bonus for up to five years. On that date, Mr. Roberts elected to relinquish this right.

 

Emphasis on Performance

 

The Compensation Committee’s emphasis on performance within the named executive officer compensation program is evidenced by the characteristics of various of its elements. Most obvious are the financial targets that are conditions to earning the annual cash bonus and the vesting of RSUs. In addition, the realized value of RSUs is directly tied to our stock price. Further, the entire value of stock options is based on appreciation in our stock price. This combination of internally measured (financial performance) and externally measured (stock price) performance provides both short-term and long-term performance components in the compensation structure of our named executive officers.

 

The Board regularly reviews the risks involved in the Company’s business plans to ensure they are appropriate, and appropriately managed. The Compensation Committee believes that the compensation program’s emphasis on performance, especially the equity-based compensation, aligns the compensation structure with the risks inherent in the business plans, in that the achievement (or lack of achievement) of the Company’s operating, investing and capital goals would be expected to be reflected in the market price of the Company’s stock. At the same time, the Compensation Committee reviews the nature and mix of compensation elements, as well as compensation plan design and award terms, to ensure that our compensation program aligns the interests of our executives with those of our shareholders, so as to avoid inadvertent incentives for the executive officers to take inappropriate business risks by making decisions that may be in their best interests but not in the best interests of our shareholders.

 

As described above, in 2008 the Compensation Committee selected consolidated operating cash flow and free cash flow as the performance goals for the annual cash bonuses of our named executive officers, other than Mr. Block, and consolidated operating cash flow growth as the single performance goal for vesting of their performance vested RSUs. For Mr. Block, consolidated operating cash flow was the largest performance goal for his annual cash bonus. The peer group comparisons described above indicate that overall, both with respect to the mix of cash vs. equity and the types of equity-based vehicles used, the Company’s “pay at risk” practices are within the range of peer group practices. Total performance-based compensation in 2008 (using the grant date value of stock options and RSUs) was a significant percentage of the named executive officers’ total compensation (67% for Mr. Brian L. Roberts, 73% for Mr. Angelakis, 62% for Mr. Burke, 69% for Mr. Cohen and 41% for Mr. Block).

 

Operating cash flow is defined as operating income before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses on sale of assets, if any. As such, it eliminates the significant level of noncash depreciation and amortization expense that results from the capital intensive nature of our businesses and intangible assets recognized in business combinations, and is unaffected by our capital structure or investment activities. Our Board uses this metric in evaluating our consolidated operating performance, and management uses this metric to allocate resources and capital to our operating segments. We believe that operating cash flow is also useful to investors as a primary basis for comparing our operating performance with other companies in our industries, although our measure of

operating cash flow may not be directly comparable to similar measures used by other companies. For these reasons, the Compensation Committee views this quantitative metric as the best overall measure of our performance that can be affected by the decision making of our named executive officers, and accordingly gave it an 80% weight.

 

As described above, in 2008 the Compensation Committee added free cash flow as an additional performance metric in achieving the target annual cash bonus for the named executive officers, other than Mr. Block, and gave it a 20% weight. Free cash flow is defined as “Net Cash Provided by Operating Activities” (as stated in our Consolidated Statement of Cash Flows), reduced by capital expenditures and cash paid for intangible assets, and adjusted for any payments related to certain nonoperating items, net of estimated tax benefits (such as income taxes on investment sales, and nonrecurring payments related to income tax and litigation contingencies of acquired companies). Free Cash Flow is used as an indicator of our ability to service and repay debt, make investments and return capital to investors through stock repurchases and dividends. It is also valued by investors as an additional measure that can be used to compare our performance with other companies. For these reasons, the Compensation Committee believes that free cash flow is a meaningful quantitative metric that also reflects the decision making of our named executive officers.

 

The Compensation Committee believes that measuring performance for our named executive officers using the same consolidated financial metrics (rather than individual performance goals tied to specific operating targets) is appropriate given the overall responsibility of the senior management team to deliver the Company’s most important performance goals for the year.

 

The Compensation Committee does not determine compensation levels, or condition incentive-based compensation award achievement, based directly on our stock price performance, because it believes that it is not equitable to condition performance rewards based on an external quantitative metric that management cannot directly control and to do so could lead to an undesirable focus on short-term results. However, as stated above, the Compensation Committee does review data comparing shareholder return performance to that of our peer group companies and does consider this information in setting compensation levels each year. In addition, because a material portion of compensation for each named executive officer is in the form of a stock-based vehicle, a significant portion of each executive’s compensation is inherently tied to stock price movement and the achievement of shareholder value. As noted above, this is reflected in the significantly reduced value of outstanding equity-based awards of the named executive officers as a result of the substantial drop in the market price of the Company’s common stock in 2007.

 

Emphasis on Long-Term Stock Ownership

 

Vesting of Equity-Based Incentive Compensation.  The Compensation Committee seeks to achieve the long-term objectives of equity compensation in part by extending the vesting period for options over a longer time period than is the case with most other large public companies. For example, with respect to the stock options granted to our named executive officers during the last several years including 2008, one-half of the options vest over five years and one-half vest over a period of nine years and six months. RSUs granted to our named executive officers during the last several years including 2008 generally vest 15% on each of the first four anniversaries of the date of grant and 40% on the fifth anniversary. The Compensation Committee believes that these longer time-frame vesting schedules focus the executives over the long term on the creation of shareholder value.

 

Stock Ownership Guidelines.  We have a stock ownership policy for members of our senior management, including our named executive officers. Under the current guidelines established by the Compensation Committee, Mr. Brian L. Roberts is required to own our stock in an amount equal to at least five times base salary. The other named executive officers are required to own our stock in amounts ranging from one and one-half to three times base salary. This policy is designed to increase the executives’ ownership stakes in the Company and align their interests with the interests of shareholders. “Ownership” for purposes of this policy is defined to include stock owned directly or indirectly by the executive and shares credited to the executive under our employee stock purchase plan, which must be held for 180 days from the date credited. In addition, 60% of each of the following types of ownership also counts: shares owned under our 401(k) plan, deferred

shares under our restricted stock plan and the difference between the market price and exercise price of vested stock options. In determining compliance, the Compensation Committee may take into account any noncompliance that occurs solely or primarily as a result of a decline in the market price of our stock. All of our named executive officers have been deemed to satisfy the requirements of our stock ownership policy as of December 31, 2008. In the event a subject employee is not in compliance, he or she is prohibited from selling our stock (unless a hardship exemption is granted).

 

Policies Regarding Hedging.  Our policy prohibits any named executive officer from buying or selling any Company securities or options or derivatives with respect to Company securities without obtaining prior approval from our General Counsel. This seeks to assure that the executives will not trade in our securities at a time when they are in possession of inside information. We do not have a policy that specifically prohibits our named executive officers from hedging the economic risk of stock ownership in the Company. However, federal securities laws generally prohibit our named executive officers from selling “short” our stock.

 

Tax and Accounting Considerations

 

The Compensation Committee periodically reviews our compensation practices for purposes of obtaining the maximum tax deductibility of compensation paid, consistent with our employment agreements and related contractual commitments. For example, as described above, we include performance conditions in RSU grants to our named executives officers as a means of obtaining tax deductibility for their value. From time to time, the Compensation Committee has awarded, and may in the future award, compensation that is not fully deductible if it determines that such award is consistent with this philosophy and is in the best interests of the Company and its shareholders. Prior to year-end 2008, we amended existing agreements with our employees (including our named executive officers) to ensure that any compensation that could be characterized as nonqualified deferred compensation complies with Section 409A of the Internal Revenue Code.

 

The Compensation Committee also considers the accounting treatment of compensation elements in determining types and levels of compensation for our named executive officers.

 

Other Considerations

 

The Compensation Committee has historically viewed material increases in the size and scope of our operations as a basis for material increases in compensation levels. Most recently, this occurred in 2002 following our AT&T Broadband acquisition, which almost tripled the size of our cable operations, making us the nation’s largest video services provider.

 

The Compensation Committee reviews, but does not give significant weight to, aggregate amounts realized or realizable from prior years’ compensation when making decisions regarding current compensation (what some commentators call an “accumulated wealth analysis”). As stated above, the Compensation Committee believes that in order to maintain the best group of executives to lead the Company, we need to provide a compensation package each year that is highly competitive with the marketplace. High quality executive talent with the experience and capabilities sought by us is scarce. The Compensation Committee is strongly of the view that it is an unnecessary risk to shareholder value to not provide a competitive level of compensation to our named executive officers each year. It believes that value realized on prior years’ compensation from stock appreciation is the reward for the executive’s work over that period and the achievement of our long-term goals. To reduce current year compensation below competitive levels because an executive has realized gains based on a desired increase in shareholder value is seen by the Compensation Committee as counterproductive.

 

The Compensation Committee is aware that our Chairman and Chief Executive Officer, Mr. Brian L. Roberts, is a son of our founder, Mr. Ralph J. Roberts, and is our shareholder with the greatest beneficial voting power. The Compensation Committee maintains an objective stance toward Messrs. Roberts’ compensation. The Compensation Committee uses the same methods, tools and processes to determine the Messrs. Roberts’ compensation as it does for our other named executive officers.

Recoupment Policy.  In 2007, upon the recommendation of the Compensation Committee and the Governance and Directors Nominating Committee, our Board adopted an incentive compensation recoupment policy. The policy provides that if it is determined by our Board that gross negligence, intentional misconduct or fraud by one of our executive officers or former executive officers caused or partially caused the restatement of all or a portion of our financial statements, the Board, in its sole discretion, may, to the extent permitted by law and our benefit plans, policies and agreements, and to the extent it determines in its sole judgment that it is in our best interests to do so, require reimbursement of all or a portion of any annual cash bonus, vested RSU or other incentive-based compensation granted on or after March 1, 2007 to such executive officer or former executive officer (and/or effect the cancellation of unvested RSUs) if: (1) the amount or vesting of the incentive-based compensation was calculated based upon, or contingent on, the achievement of financial or operating results that were the subject of or affected by the restatement and (2) the amount or vesting of the incentive-based compensation would have been less had the financial statements been correct.

 

We, the members of the Compensation Committee of the Board of Directors, have reviewed and discussed with management the Compensation Discussion and Analysis. Based on this review and discussion, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

 

Members of the Compensation Committee

 

Dr. Judith Rodin (Chair)

S. Decker Anstrom

Joseph J. Collins

Michael I. Sovern

 

The following table sets forth specified information regarding the compensation for 2008, 2007 and 2006 of our Chairman, President and Chief Executive Officer (Mr. Brian L. Roberts), our Chief Financial Officer (Mr. Michael J. Angelakis) and our next three most highly compensated executive officers (Messrs. Stephen B. Burke, David L. Cohen and Arthur R. Block), except as set forth in footnotes (8) and (9) to this table. The following table also sets forth specified information regarding the compensation for 2008, 2007 and 2006 of Mr. Ralph J. Roberts, the Founder and Chairman Emeritus of our Board (in lieu of his prior position as Chair of the Executive and Finance Committee of our Board, now the Finance Committee of our Board), who would have been among the next three most highly compensated executive officers but for his resignation from his prior position and the consequent termination of his executive officer status prior to the close of 2008. We refer to these individuals as our named executive officers as described in “Compensation Discussion and Analysis — Our Named Executive Officers for 2008” on page 38. Compensation for 2008 includes compensation earned in 2008 (except in the case of stock awards and option awards) as to which amounts are included as compensation recognized for financial statement reporting purposes with respect to the 2008 fiscal year.

 

 

 

 

The following table provides information about equity and nonequity awards granted to our named executive officers in 2008, as follows: (1) the grant date for equity awards (column (b)); (2) the estimated future payouts under nonequity incentive plan awards (columns (c), (d) and (e)); (3) the estimated future payouts under equity incentive plan awards, which consist of performance-based RSUs (columns (f), (g) and (h)); (4) all other stock awards, which consist of the number of shares of Class A common stock underlying RSUs (column (i)); (5) all option awards, which consist of the number of shares underlying stock options (column (j)); (6) the exercise price of the stock option awards, which reflects the closing price of our Class A common stock on the date of grant ($18.98) (column (k)); and (7) the grant date fair value of each equity award computed under SFAS 123R (column (l)).

 

 

 

 

The following table provides information on the holdings of stock option and stock awards by our named executive officers as of December 31, 2008. This table includes unexercised vested and unvested stock options (see columns (b), (c), (e) and (f)), unvested RSUs (see columns (g) and (h)) and unvested performance-based RSUs (see columns (i) and (j)). The vesting schedules for these grants are disclosed in the footnotes to this table. The market value of stock awards is based on the closing market price of a share of our Class A common stock as of December 31, 2008, or $16.88. The performance-based RSUs are subject to achieving specified increases in consolidated operating cash flow, as described in further detail in “Compensation Discussion and Analysis — Elements and Mix of our Compensation Program — Equity-Based Incentive Compensation” on page 42.