As the Australian football grand finals beckoned late last week, the Murdoch-controlled 21st Century Fox released its 2016-17 proxy statement in the US. It’s more of the same with another hostile shareholder resolution aimed at dismantling the Murdoch family gerrymander through the dual-class share structure.
And it’s more of the same with the three Murdoch men — Rupert and his only sons, James and Lachlan — pocketing another US$70 million in salary and bonuses between them.
As in previous years, the driver of the change to Fox’s system of voting (which gives the Murdochs almost 40% of the votes, despite only owning about 14% of the total shares on issue) is the US$400 million Nathan Cummings Foundation out of New York.
It’s hard to argue with the foundation’s case as laid out in the proxy statement:
“We believe that the Murdoch family’s effective control over 21st Century Fox has resulted in decisions that may not be in public stockholders’ best interests. In 2015, Rupert Murdoch’s sons James and Lachlan were appointed CEO and Co-Chairman, respectively. The elevation of James, in particular, surprised some observers because he had resigned as the head of European and Asian operations for News Corp, which was split into 21st Century Fox and News Corp in 2013, following the phone hacking scandal. These moves raise concerns that Fox’s board may limit its consideration of non-Murdoch candidates for top executive positions.”
And, of course, the Murdoch-dominated board, which includes the two Australian luminaries Jac Nasser and Rod Eddington, rejects the idea, again claiming in the proxy statement that the “current dual class capital structure continues to be appropriate and is in the best interest of the Company and its stockholders”.
[Mayne: Murdoch men help themselves to staggering $111.5m from Fox in 2015-16]
This is nonsense because the system benefits just one group of shareholders, namely the Murdochs, who, in recent years, have been self-indulgent and reckless with splurges on the likes of Dow Jones.
“The Board believes that the Murdoch family’s involvement and large shareholdings through the Murdoch Family Trust facilitate the Board’s focus on long-term value creation. Executive Chairmen Mr. K.R. Murdoch and Mr. L.K. Murdoch and Chief Executive Officer Mr. J.R. Murdoch have pursued value-enhancing strategies throughout the Company’s history and their vision, leadership and stewardship have been critical to the Company’s success. The Murdoch family has a strong interest in the success of the Company and is highly incentivized to create long-term value for the Company.”
This ignores the fact that the share price would surge if the gerrymander was unwound because a take-over premium would be built into the share price and the Murdochs would no longer be able to bleed their salaries from the oppressed majority of shareholders who are denied voting rights.
Fox shares haven’t been a great success since the split back in June 2013, either.
The shares were at US$30.32 on July 1, 2013, and are currently trading around US$26.
That’s a drop of 14% over four years at the same time as the broader US market soared more than 50%.
Such woeful performance means the US$70 million paid to the triumvirate of Rupert (US$29.3 million), Lachlan (US$20.6 million) and James Murdoch (US$20.3 million) in 2016-17 was a waste of shareholder funds.
Yes, each took a modest cut on the record US$84.6 million collectively taken in 2015-16 when Rupert pocketed US$34.6 million, Lachlan US$23.7 million and James US$26.3 million.
But no other family in the history of public companies has taken out more than $1 billion in salary over a 25-year period.
[Mayne: Murdoch pay hits record-breaking $1b]
Independent shareholders have been routinely voting against the remuneration report, year after year, but unlike in Australia, the dodgy US system allowed conflicted executives to vote their owns shares in favour of their own pay.
That’s a far bigger conflict of interest than the arguments run by 21st Century Fox that CBS was conflicted on the Ten buyout and shouldn’t have been able to vote on the recent sale.
For some strange reason, Crikey is the only media outlet globally which has gone back over the years and tallied up the Murdoch family’s outrageous salary looting.
And we still haven’t yet seen the largesse — smaller in size — from News Corp, which has not released any information about its annual meeting and 2016-17 salaries, even though the shareholder gathering is due to take place in the next month.
Lachlan Murdoch’s double dipping as executive chairman of both New Corp and 21st Century Fox is the most indefensible element of these, especially seeing as he was so distracted in 2016-17 trying to protect his $200 million investment in Ten.
This has now been completely written off, yet somehow he remains a valued and handsomely paid chairman of two public companies, protected by a gerrymander that would make Sir Joh Bjelke-Petersen blush. What a joke!
This is why you get rich, so you can do what you like. It’s Murdoch’s political influence you should be more concerned about. By the by, can someone tell me why people pay $189 a year to access Crikey? I know newspapers suck, but at least you get a crossword, some cartoons, quirky stories from around the world. All you get here is what you expect. And I just saw an ad here for something I searched for yesterday. I resent that sort of intrusion, You have to tolerate it for free content but I am not going to pay and get it on top.