Rupert Murdoch is to receive a 15 per cent rise in total potential pay as he prepares to split his News Corp media empire into two divisions. The increase will take the total amount he could take home from both companies to $28.3m.
News Corp said in a regulatory filing that Mr Murdoch’s base pay at the two companies would remain unchanged at $8.1m for the financial year 2014.
However, the target payout from his long-term incentive plan across both companies would rise from $4m in 2013 to $7.7m with other bonuses targeted to pay out a total of $12.5m.
In June, News Corp will be split into two separate companies, with the group’s TV and film properties being spun off into 21st Century Fox and a “New News Corp”, to include the group’s newspapers, publishing and Australian assets. New News Corp will start life with almost $2.6bn in net cash.
Mr Murdoch will remain chairman and chief executive of 21st Century Fox and will chair New News Corp.
Julie Tanner, assistant director of socially responsible investing at Christian Brothers Investment Services, which owns voting and non-voting shares in News Corp, said the company should have used the reorganization to improve corporate governance practices.
“Instead, with no independent oversight, Mr Murdoch has rewarded himself handsomely while the board has looked the other way,” she said. “A system of checks and balances must be implemented to ensure that the interests of all shareholders, not just Mr Murdoch’s, are represented,” she said.
Mr Murdoch's pay hike comes against the backdrop of the phone hacking scandal at his UK newspapers, with the media group renewing efforts in recent months to settle cases with claimants.
By last December it had incurred $250m in legal and professional fees related to UK newspaper investigations, and paid out $25m in settlements of civil claims. It had also provided $70m to cover possible liabilities from remaining claims.
The pay increase follows a strong rebound in News Corp shares from below $14 in July 2011 to $31.22 in afternoon trading on Friday. The rally confounded the fears of some analysts who had argued that litigation over hacking and other issues could have taken a greater toll.
News Corp must still weather UK court cases against former employees including Rebekah Brooks, former chief executive of News International, and Andy Coulson, former editor of the News of the World. Those trials are expected to begin in September.
Despite the increase, Mr Murdoch will still not match the payouts awarded to the most senior media executives in the US.
Last year, Leslie Moonves, CEO of US network CBS, received $70m in total compensation, making him one of the highest paid executives in corporate America. The total pay of Bob Iger, chairman and CEO of Walt Disney, reached $40.2m last year.
Additional reporting by Emily Steel
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