Murdochs’ pay cut! Can it be possible? Could it mean that performance does mean something at the companies of the Murdoch clan? The question arises from the 2014-15 pay deals for 21st Century Fox, released this morning (our time) in the proxy statement for the annual meeting next month. They show that pay for the company’s leading executives dipped to a three-year low in 2014-15 as the boil went off Fox’s performance and the share price dipped. The 84-year-old patriarch, Rupert Murdoch, had his pay cut by 4.6% in total compensation (the shares were down 6.7% for the year to June). Murdoch was paid a total of US$27.9 million, according to Fox’s proxy statement filed with the American SEC. The package includes: US$7.1 million in salary, US$5.1 million in stock awards, US$9.8 million in non-equity incentives, US$5.7 million change in pension value, and US$182,636 in other compensation. The last category includes US$110,235 for personal use of the corporate aircraft (to fly to Australia and back), a US$14,922 car allowance and US$48,204 in life insurance premiums. And it was a double indignity for the 84-year-old billionaire: the other family company, News Corp, cut his pay to just US$5.1 million for the year to June 30, down from US$8.7 million for the previous year. Wonders will never cease. — Glenn Dyer
But wait, there’s less. Rupert Murdoch’s total Fox payment in 2014-15 of just over US$27.9 million was down from US$29.24 million the year before and US$28.91 million in 2012-13. Chase Carey was paid a total of US$23.21 million, down from US$27.9 million in 2013-14 and US$27.04 million in 2012-13. And James Murdoch, the new CEO, was paid a total of US$15.054 million in 2014-15, down from US$18.69 million the year before and US$17,03 million in 2012-13. James Murdoch will get more this financial year as he benefits from a full year’s remuneration. And co-chair Lachlan received just US$323,000 for his role as a director in 20914-15, just behind the US$324,000 received by the lead “independent” director Sir Rod Eddington. But Lachie’s pay was sharply down from the US$2.078 million he received in 2013-14, which included US$1.8 million in deferred compensation benefits. But like James, Lachie’s pay will leap this year to take account of his new, executive role at Fox. — Glenn Dyer
Less for less? All up that was US$43.261 million for the hard-working Murdoch lads for 2014-15. That’s down from nearly US$49.2 million a year ago. While the shares of Fox fell just on 7% in 2014-15, so far in calendar 2015, it is a very, very different story, with the shares down more than 30% as media stocks no longer are high flyers on Wall Street (nothing is at the moment, not even mighty Apple, which is looking at a 10% fall in the current quarter alone). Fox shares are heading for a 21% drop in the quarter that ends tonight, September 30. News Corp’s shares will be down around 12% in the quarter and are down nearly 17% in 2015 so far. So a real test of pay for performance will come next year for News and especially Fox, which is facing weak results from its free-to-air TV business and from its film studios, while its cable operations are going gangbusters heading into the 2016 election campaign. — Glenn Dyer
Some good news from the real economy. Amid all the sell-offs, share price falls and doom and gloom about mining companies (which seem to be peculiar to Fairfax Media outlets especially), there’s a couple of positive points to be made about BHP Billiton and Rio Tinto. Both are now clearly the best-run companies in the global resources business. Yes, their share prices are at multi-year lows, but that’s because of the panicky selling by bone-headed investors, especially the collection of headless chickens known as “big global investors”. Both companies have hacked and slashed at costs, staff levels, investment and projects. Both still own the most profitable mining businesses in the world — their Pilbara iron ore operations with profit margins to make a bank or Apple green with envy. And both are continuing to pay dividends and haven’t cut them, despite numerous forecasts from “analysts” that they will.
BHP has a lot of debt, and Rio has lower debt. But both are not Glencore (which assured investors overnight that it doesn’t have any financial problems, and up bounced the shares 18% in a dead-cat bounce). And the attractiveness of BHP and Rio with their still untouched dividends was underlined overnight by news that Vale, their big Brazilian iron ore rival, is looking to cut its 2015 dividend 25% to US$1.5 billion in total, by chopping the previously forecast US$1 billion payment to just US$500 million. Vale is still dominated by the Brazilian government, which is in all sorts of problems with an economy in recession, facing massive corruption charges, and rising under-employment. And, by the way, BHP seems to have discovered all things green, climate change and renewable energy with its third major statement on the issue since Malcolm Turnbull became PM earlier this month, and Tony Abbott walked the plank of his own making. Funny that. — Glenn Dyer
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