By Anders Melin and Gerry Smith | Bloomberg Technology

Comcast Corp. paid $490 million this year to unwind obligations under life insurance policies tied to late founder Ralph Roberts and his wife Suzanne, a remnant of an era when generous executive perks received less investor scrutiny.

The payments, some of which the cable company expects to eventually recoup, are related to life insurance policies organized under a split-dollar arrangement — once a common method employers used to help key executives get bigger death benefits. The policies went out of vogue because of their similarities to interest-free loans, which came under regulatory examination after scandals at Enron Corp. and Tyco International Ltd.

After the 2002 Sarbanes-Oxley Act prohibited companies from extending credit to top bosses, Comcast ceased to pay premiums on Roberts’s policies and in 2004 handed the then-chairman of the board’s executive and finance committee a $14.4 million stock award. It continued to grant Roberts special bonuses to cover his share of the deal until he died, regulatory filings show. In the six months following his death, the company paid Suzanne Roberts $30 million to cover the premiums and related tax costs.

Following Roberts’s death last year, Comcast concluded it was in its best interest to eliminate its obligations under the policies, since the annual premiums and tax costs would become “significantly greater” each year due to the age of Roberts’s wife, who was 94 at the time of an April 8 regulatory filing. Comcast paid $164 million to trusts established for Roberts’s beneficiaries to acquire the remaining policies that will lapse once his wife dies, according to the filing. It also made a one-time cash payment of $326 million to Suzanne Roberts to settle all future premium payments and taxes.

“It seems like a tremendous amount of money,” Parker Beauchamp, chief executive officer of insurance firm Inguard, said of the policies.

For wealthy Americans, life insurance is a customary part of estate planning to help heirs avoid selling assets to pay estate taxes. In split-dollar arrangements, an employer and employee split the premium payments and then share the benefits. The employer usually has the right to reclaim the aggregate sum of its premiums once the insured person dies, making those payments resemble an interest-free loan.

Comcast will get much of the money back eventually. The company expects to receive about $215 million from the policies’ cash surrender value once they lapse, of which $51 million comes from premiums it has already paid in. It also anticipates that the purchase will generate about $121 million in tax benefits. John Demming, a Comcast spokesman, declined to comment beyond the filings.

 Ralph Roberts, who built Comcast into the largest U.S. cable-television operator, died last June at the age of 95. He co-founded American Cable Systems Inc. in Tupelo, Mississippi, in 1963 as a 1,200-subscriber service, and later renamed it Comcast. He served as chairman for 18 years until 2002, when he became chairman of the board’s executive and finance committee and his son, Brian, took over as chairman and CEO.

Comcast entered into the split-dollar arrangement with the elder Roberts in 1992. The deal required the company to pay its share of the premiums and also to pay Roberts a special bonus each year that would match his outlays for the policies and any taxes he’d be due, effectively making Comcast cover the full cost of the arrangement.

“It’s very generous to also gross up a person’s total compensation to cover the tax liability,” said Joshua Husbands, a partner at Holland & Knight LLP. “There’s nothing improper about it, but that’s not a typical arrangement.”

Brian Roberts had a similar insurance arrangement with a combined death benefit of $223 million. In 2009, following a shareholder proposal that raised concerns over Comcast’s posthumous benefits — so-called golden coffin arrangements — the CEO voluntarily relieved the company from any future payments toward his policies. Roberts is one of several beneficiaries of the trusts that previously held his father’s policies.

While rare, some companies still have legacy split-dollar policies in place for executives. The heirs of Time Warner Inc.’s CEO Jeff Bewkes will receive approximately $4.1 million from such a policy after he dies, according to a filing. Time Warner stopped paying premiums on the policy in 2003.

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