Risk & Compliance

Cablevision’s Dolan Exercises ”Control”

This year's move to install friendly faces on the board follows last year's proposal that Cablevision assert its rights as a ''controlled company.''
Steve BergsmanMarch 4, 2005

Cablevision chairman Charles Dolan is no stranger to controversy.

Earlier this week he upset governance advocates when he removed William J. Bell, Sheila A. Mahony, and Steven Rattner as directors and installed four people who are likely to support his policies: Rand Araskog, Frank Biondi, John Malone, and Leonard Tow. (A fourth vacancy on the board was recently created by the death of the company’s co-founder, John Tatta.)

Dolan also plans to expand the company’s board of directors so that holders of Class B shares — of which Dolan controls a majority — can elect his son-in-law Brian Sweeney, the senior vice president for eMedia, to the Board.

Dolan also stated that Class B shareholders will exercise their right under the company’s charter to elect 75 percent of directors at the company’s upcoming annual meeting. Since there are currently six directors elected by Class A shareholders, the proposed action will require the election of 18 directors by the Class B shareholders, or a reduction in the number of directors elected by the Class A shareholders, or some combination.

Last year, Cablevision stated in an SEC filing that the Dolan family asked the company to opt out of a number of listing standards recently adopted by New York Stock Exchange, by exercising its right as a controlled company — any business that has more than 50 percent of its voting power held by an individual, a group, or another company. Under the Big Board’s revised standards, such a company is not required to adhere to three NYSE standards, namely:

• That companies must have a majority of independent directors;
• That companies must have a nominating/corporate governance committee composed entirely of independent directors; and
• That companies must have a compensation committee composed entirely of independent directors.

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