One of the most remarkable weeks in the history of the Murdoch family
continued to unfold this morning when News Corp disclosed that Lachlan
Murdoch would get a termination payout of more than $5 million and has
signed a two year consulting and non-compete agreement. The
SEC Form 8-K announcement (here) includes the full termination letter and agreement, plus new
information on bonus payments for Rupert and Lachlan Murdoch.

Lachlan will be allowed to keep all his options over about $40 million
worth of non-voting shares for as long as he stays
on the News Corp board and will receive a separation payment equivalent
to his salary and bonus for 2004-05, which has not yet been disclosed.
However, Lachlan did receive a salary of US$1.8 million and a cash
bonus of US$2.34 million in 2003-04, bringing his total package to
A$5.5 million. With News Corp profit set to rise in 2004-05, it is fair
to assume Lachlan’s pay will rise, along with his termination payout.

James Packer, who gets no salary from his tight-fisted father at PBL,
must be reading this and weeping as Lachlan’s 11-year career at News
Corp will deliver gross salary payments and options profits of more
than $30 million.

Even bigger dollars were only just around the corner for Lachlan based
on his bonus formula which was also revealed in this morning’s Form 8-K.
Lachlan’s bonus ranged from nothing if earnings per share fell more
than 25%, to US$7 million it EPS rose by more than 40%. The same
formula was revealed for News Corp finance director Dave De Voe, but
neither gets near Rupert Murdoch who will be paid a US$25
million bonus if EPS rises by more than 40%.

Lachlan’s relationship with his dad will perhaps best be demonstrated
by the way he travels back to Australia to arrive in Sydney on the
first day of Spring. If the private jet is made available, then the
relationship is okay, but if poor Lachlan, Sarah and Kalan are slumming
it in first class with Qantas, you’ll know there’s plenty of bad blood.

Lachlan flew all over Australia in a private jet when he ran the
local operation in the late 1990s. He’d better get used to commercial
travel in his new life.

Meanwhile, the Herald Sun is reporting this morning that Rupert Murdoch intends to once again become the official publisher of the New York Post,
replacing Lachlan who was passionate about the paper despite it now
having cost News Corp more than $500 million in capital and accumulated
losses over the years.

Peter Fray

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