Comcast Corp has paid Suzanne Roberts, widow of the company’s founder Ralph J. Roberts, $326 million to end its obligations under an executive perk given to Roberts in 1992, writes Harold Brubaker for philly.com.
Ralph Roberts, who spent his sunset years with his wife at their restored Newlin Township estate, died last June aged 95.
The payment was part of the company’s effort to unwind a form of insurance Comcast had entered into with Ralph Roberts called split-dollar plans. This used to be a common component of executive pay to boost estate or retirement income.
The plans got their name because the premiums were split between the company and the executive only on paper, whereas in reality, companies lent executives the money to pay for their part of the premiums. After the Sarbanes-Oxley banned loans to executives in 2002.
Comcast also paid an additional $164 million to terminate the life-insurance policies that were becoming increasingly expensive due to Suzanne Roberts’ age.
Overall, the expected final cost for Comcast will only be $154 million, rather than the $490 million paid out this year, due to the policies’ $215 million cash value and an anticipated $121 million in tax benefits.
“By settling these legally binding contractual obligations now, we were doing the right thing for the company and our shareholders, as the cost of continuing the life-insurance policies would only increase substantially over time,” said Comcast Senior Executive Vice President, David L. Cohen.