Charter Communications Inc. gained more than 5 percent in New York trading after naming Thomas Rutledge chief executive officer to help lead the company back to profitability.
Rutledge, 58, will take the helm at the fourth-largest U.S. cable provider Feb. 13, succeeding Michael Lovett, who said in October he would step down. He will also become a member of the St. Louis-based company’s board, according to a statement. Rutledge announced his resignation as chief operating officer of Cablevision Systems Corp., the fifth-largest U.S. cable operator, on Dec. 16.
Charter has reported net losses in all except one of its quarters since emerging from bankruptcy in November 2009. Rutledge helped Cablevision add video, telephone and broadband customers in the greater New York area and became “the hands-down best executive in the cable business,” analyst Craig Moffett at Sanford C. Bernstein & Co. in New York said on Dec. 16.
“Maybe he wanted a bigger challenge,” said Tom Eagan, an analyst at Collins Stewart LLC in New York, in a telephone interview yesterday. “Cablevision’s loss is a gain for Charter.”
Charter rose 5.1 percent to $55.42 at the close, its biggest one-day gain since Nov. 3. The shares have risen 42 percent this year.
Rutledge will be paid a base salary of $2 million, with annual increases determined by Charter’s compensation committee. He will also receive equity awards for 1.26 million shares, according to company filings. His contract spans four years, the filings show.
“Charter is an outstanding company with great people,” said Rutledge in the statement. “I am honored to have been chosen for this role.”
Rutledge was inducted into the Broadcasting & Cable Hall of Fame this year after 34 years in the cable industry. He was Time Warner Cable Inc.’s president before Cablevision Chief Executive Officer James Dolan hired him as president of cable and communications.
Rutledge built his reputation on increasing Cablevision’s customer base and returning capital to shareholders with asset spinoffs, dividends and share buybacks. His operational challenges may be more difficult with Charter, said Eagan, as the company’s cable assets are more spread out across the U.S.
Charter has 4.9 million residential customers in 25 states including California, Missouri and Connecticut.