Charter surges on Rutledge hire; BTIG downgrades Cablevision

Shares in Charter Communications (Nasdaq: CHTR) popped as investors cheered news that former Cablevision (NYSE: CVC) COO Tom Rutledge would soon take over as CEO.

While Charter is surging on the Rutledge news, his departure from Cablevision prompted BTIG analyst Richard Greenfield to downgrade his rating on Cablevision from a buy to a hold rating. Greenfield panned Cablevision management for the abrupt departures of Rutledge and president of cable and communications John Bickham, and said the MSO needed to more clearly communicate who will run its cable operations.

"Without fully understanding the Rutledge situation, no clarity on whether there will actually be a replacement to Rutledge and how a new COO's duties will be defined vs. [CEO] Jim Dolan and a meaningful reduction in 2012 free cash flow forecasts, we simply cannot continue to rate CVC a buy [rating]," Greenfield wrote.

Greenfield reduced his cash-flow estimates for Cablevision, projecting that the company will generate free cash flow of $1.54 per share in 2012, down from his previous estimate of $2.84 per share.

Charter signed Rutledge to a four-year contract that will pay him an annual salary of $2 million, according to an SEC filing from the MSO. Rutledge may also receive a target bonus of 175 percent of his salary each year. Charter gave Rutledge 1.23 million shares of common stock on Monday, according to the filing.

Shares in Charter were up $2.30, or 4.36 percent, after the news.

For more:
- see Greenfield's downgrade note (registration required)
- see Charter's 8-K filing at the SEC

Related articles:
Charter names former Cablevision COO Rutledge CEO
Cablevision stock slides on Rutledge resignation
Bickham to resign from Cablevision