Something very strange happened over the weekend. News Corporation strategically released a whole bunch of information in the early hours of Saturday morning and the Australian media has chosen to ignore the s-xiest element.
Sure, the retirement of long-serving directors such as Ken Cowley and Tom Perkins is worth a mention and it was magnanimous of James Murdoch to voluntarily surrender his $US6 million bonus, keeping his overall package for 2010-11 down to $US11.9 million. But why hasn’t anyone focused on Rupert Murdoch giving himself a 43% pay rise to a record $US33.3 million in 2010-11?
The chutzpah of getting so excessively rewarded after presiding over one of the biggest governance scandals to ever engulf a public company is quite extraordinary. This is the how the top five News Corp executives fared in 2010-11:
- Rupert Murdoch: $33.3 million
- Chase Carey: $30.15 million
- David Devoe: $18.24 million
- Roger Ailes: $15.55 million
- James Murdoch: $US11.9 million
And this is what they got in 2009-10:
- Chase Carey $26 million
- Rupert Murdoch $22.72 million
- Roger Ailes $13.96 million
- James Murdoch $10.3 million
- David Devoe $7.13 million
If the independent directors really are trying to place more emphasis on Carey, then why have they allowed Rupert to jump ahead of him on the pay stakes?
It is worth asking the question as to whether Rupert Murdoch has been paid more in salary by a public company than any other person in history. This is how much he has been paid over the past 13 years:
- 2010-11: $US33.3 million
- 2009-10: $US22.72 million
- 2008-09: $US19.88 million
- 2007-08: $US27.55 million
- 2006-07: $US32.14 million
- 2005-06: $US25.9 million
- 2004-05: $US23.64 million
- 2003-04: $US20.65 million
- 2002-03: $US14.1 million
- 2001-02: $US9.21 million
- 2000-01: $US7.58 million
- 1999-00: $US6.53 million
- 1998-99: $US6.34 million
That’s a total of $249.54 million. If anyone can come up with a bigger number, please let us know.
For an insight on how Rupert reacts to questions on executive pay issues, consider this exchange at the 2010 AGM:
Stephen Mayne: CGI Glass Lewis, the proxy advisory firm, has their list of the 25 most egregious or overpaid executives in the S&P500, they rank you at number 18. The 18th most egregious or overpaid or at least hard to justify …
Rupert Murdoch: Who is this?
Stephen Mayne: CGI Glass Lewis, one of the two big proxy advisory firms. They tell shareholders how to vote their stock. Warren Buffett gets by on $US100,000 a year; you’re a multibillionaire. Why do you need to be paid such a huge sum that is actually rated as of one of the most over-the-top payments in corporate America?
Rupert Murdoch: I have a fraction of Mr Buffett’s wealth, and Mr Buffett doesn’t have to do that, he only has to sell a few shares every year to have many many billions to play with.
And all this from a company which has underperformed the market for the past 15 years.
Amusingly, News Corporation outlets love to attack elected officials over salary levels. Last week, the Herald Sun took a swipe at Victorian council CEOs earning $300,000 and capital city councillors travelling overseas. I submitted the following letter for publication:
How predictable that the Herald Sun has once again attacked the travel costs of elected local government councillors and the salaries of council CEOs.
Whilst elected officials and bureaucrats are fair game, it should also be noted that the Herald Sun’s proprietor, Rupert Murdoch, was paid an exorbitant $US22.72 million in 2009-10 and that he flies around the world in private jets that are paid for by long-suffering News Corp shareholders.
The Murdoch family owns about 13% of News Corp yet the shareholders who own the other 87% of the company are never told how much money is spent on private jets.
At least Melbourne City Councillors are transparent by seeking specific approval in open council each time they travel overseas on council business.
Stephen Mayne
City of Manningham councillor
Surprise, surprise, this company that Andrew Bolt so lauds for championing free speech, decided to censor this contribution. And speaking of travel, it would be fair to assume that not one dollar of shareholder funds were spent getting all of the Murdoch family and friends to the banks of the River Jordon for Grace Murdoch’s christening last year.
Godfather Tony Blair presumably paid his own way, as usual.
*Stephen Mayne is a director of the Australian Shareholders’ Association and company monitor for News Corp. He will be travelling to Fox Studios in Los Angeles for the 2011 AGM on October 21.
Stephen,
You could have submitted your letter to be published online on the ‘Herald’s’ website.
On the other hand, from personal experience with the ‘Australian’, if the editors of News Limited papers don’t like your opinions, you won’t be published anywhere.
” News Corporation strategically released a whole bunch of information in the early hours of Saturday morning and the Australian media has chosen to ignore the s-xiest element.”
And how ironic that Crikey would publish this information behind the paywall of ‘subscribers only’. Well done on this, though, Stephen. You are courageous.
I am sure there are quite a few others with bigger pay checks. Especially if one includes stock awarded to non-founders. (Stock owned by founders is fair enough, most would say.)
Here is an extract about the Wall Street bail out of the super-rich, said bail-out orchestrated by Hank Poulson then Treasury Secretary but as former CEO of Goldman Sachs was in the just awful position of liquidating his $700 million of Goldman stock to avoid conflict of interest. Shed a tear for the bloke.
We can love to hate Rupert but at least his companies produce and sell something in the real economy, not just clip coupons.
[Michael West
The mother of all rip-offs, September 24, 2008
(The Sydney Morning Herald)
Merrill Lynch boss John Thain took a $US200 million payout with two offsiders for less than a year’s work. Merrill was so close to obsolescence it sold itself to Bank of America for $US50 billion in scrip a few days ago just as Lehman was biting the dust. Thain was given a $US15 million bonus for signing on. Two former Goldman Sachs executives hired by Thain may do even better. Head of global trading, Thomas Montag, has already received a $US39 million bonus since signing on in August. With stock options accelerated by the buyout, he could finish up with $US76 million. The bank’s head of strategy, Peter Kraus, was bestowed with a $US95 million package just to beat what he was on at Goldman.
Paulson himself has shares in Goldman whose value was estimated at $US700 million. He is a direct beneficiary of his own bail-out proposal blind trust or no blind trust.]
I recall Michael Eisner as CEO of Disney had engineered massive self-enrichment but Wiki does not go into it. But it does detail the business of Eisner’s disastrous recruitment of uber-agent Michael Ovitz for Disney: “Ovitz lasted only 14 months and left Disney in December 1996 via a “no fault termination” with a severance package of $38 million in cash and 3 million stock options worth roughly $100 million at the time of Ovitz’s departure.” $138 mil for 14 months, and for doing nothing! Shareholders sued Disney over this expensive farce, but the court, “despite describing Eisner’s behavior as falling “far short of what shareholders expect and demand from those entrusted with a fiduciary position…” found in favor of Eisner and the rest of the Disney board because they had not violated the letter of the law (namely, the duty of care owed by a corporation’s officers and board to its shareholders).
Eisner almost beat Rupert in a single year (and that is before inflation adjustment since 1993!):
[In 1993, for example, Eisner’s total compensation was a staggering $203 million, while in 1997 he exercised options on 21.9 million shares for a profit of $550 million.
Since 1984, chairman Eisner has received nearly $1 billion from Disney, including base salary, bonuses, and stock options (Los Angeles Times, Dec. 4, 1997). In January 1997 he signed a ten-year extension contract with the company valued at some $200 million.]
And don’ forget Australia’s very own Macca man, Alan Moss who received remuneration totalling $33.49 million in 2007, his last year as CEO. He had 15 years at the trough and with stock it seems unlikely he didn’t surpass Rupert. (I don’t believe he was a founder? In any case it is more how he and his fellow Macquarie Bank shysters made their money–via financial engineering that by rights should have been illegal.)