By any reckoning the Seven Network’s CEO David Leckie is vastly underpaid, the executive chairman of Ten Network, Nick Falloon, is overpaid relative to his network’s recent lower profit and there’s no way Eddie McGuire can justify the amount of money he gets from the Packer empire.
The Seven Network is now the most profitable TV network in the country with its TV earnings before interest, tax and depreciation and amortisation heading for the $300 million mark this financial year after yesterday’s upgrade of 40-45%. Seven’s share of the commercial TV viewing audience is running around 35.5% and its share of the ad revenue is a touch higher.
Leckie was paid $1.7 million for the year to June when Seven’s TV EBITDA hit more than $256 million. He also has six million shares and options with a potential gross value of almost $60 million at yesterday’s record closing price of $9.96.
Over at Ten, Nick Falloon earned a bonus of $1 million to take his total pay to $3 million for the 2006 financial year, despite the slide in earnings of 52%. Oops. Ten has a commercial audience share this year of 28.8% and a share of the ad market of 27-28%.
Falloon’s salary was revealed in the Ten annual report out yesterday: he earned $1.98 million in base salary and super, down from 2005’s $2.46 million. During the year he also sold 1.8 million Ten shares that were part of an option scheme. At one stage Falloon was a major shareholder in Ten owning 7.5 million shares through his first employment contract. They were sold in refinancings and other deals over the past couple of years culminating with this latest sale. Ten’s TV CEO, Grant Blackley, also made the million dollar mark ($1.05 million) thanks to a bonus of $140,000 in 2006.
So where does that leave the Nine Network? Last in profit terms but first in outright payment to its CEO, Eddie McGuire.
He received a total of $4.7 million in 2006, including a base payment of $4 million, which was the first year of his new contract as a TV star and now CEO. Eddie’s not silly: he told James Packer and CEO John Alexander that he wouldn’t switch to a normal contract with performance hurdles because being a TV executive was more “dangerous”. Nine has 35.5% commercial share (equal to Seven’s) but a falling share of the ad market, especially after yesterday’s news from Seven.
David Leckie and Nick Falloon have ridden the ups and down at Seven and Ten respectively (and at PBL before that), making millions from performing. It’s why Eddie is a TV star and not a TV executive: safety and no love of risk.