Robbins Umeda LLP Announces an Investigation of Cincinnati Bell, Inc.
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Cincinnati Bell, Inc. (NYSE: CBB). Cincinnati Bell operates as a full-service regional provider of data and voice communication services. The company provides service via wireline and wireless networks and is a reseller of information technology and telephone equipment. The company was founded in 1873 and is headquartered in Cincinnati, Ohio.
Robbins Umeda LPP’s investigation focuses on whether the directors and officers of Cincinnati Bell harmed the company by breaching their fiduciary duties to shareholders. In particular, Robbins Umeda LLP is investigating the unanimous decision by the board of directors to dramatically increase executive compensation between 54.3% and 80.3% in 2010, despite Cincinnati Bell’s poor financial performance during the same period. In 2010, Cincinnati Bell witnessed a staggering loss of $61.8 million in net income and an equally dramatic 18.8% negative annual return for investors. Nevertheless, Cincinnati Bell’s board approved a 71.1% increase in compensation for CEO John F. Cassidy, who received $8,562,462 in executive pay from the company in 2010. Additionally, Cincinnati Bell’s CFO Gary K. Wojtaszek, and General Counsel for the company Christopher J. Wilson, received compensation increases of 80.3% and 54.3% respectively, in 2010.
In addition, the investigation also examines whether the board’s decision to approve these executive pay hikes violated its own pay-for-performance policies at the expense of Cincinnati Bell’s shareholders. Notably, on May 3, 2011, 66% of the company’s shareholders expressed their disdain for this and other executive pay packages by rejecting the company’s 2010 CEO and top executive compensation levels.
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