The AFR’s Rear Window column carried an item last Thursday, which was the basis of this exchange with Rupert Murdoch at the News Corp AGM:

Stephen Mayne: CGI Glass Lewis, the proxy advisory firm, has their list of the 25 most egregious or overpaid executives in the S&P500, they rank you at number 18. The 18th most egregious or overpaid or at least hard to justify …

Rupert Murdoch: who is this?

Stephen Mayne: CGI Glass Lewis, one of the two big proxy advisory firms. They tell shareholders how to vote their stock. Warren Buffett gets by on $US100,000 a year; you’re a multibillionaire. Why do you need to be paid such a huge sum that is actually rated as of one of the most over-the-top payments in corporate America?

Rupert Murdoch: I have a fraction of Mr Buffett’s wealth, and Mr Buffett doesn’t have to do that, he only has to sell a few shares every year to have many many billions to play with.

Think about that for a moment. Because Warren Buffett is worth $US45 billion compared to Rupert’s $US6 billion, Rupert felt the need to rip out an excessive $US22.7 million salary package from shareholders in 2009-10. James Packer works for free and Kerry Stokes takes a Buffettesque $100,000 from Seven.

But there’s a very important difference between Murdoch and Buffett. Berkshire Hathaway doesn’t pay any dividends whereas Rupert pocketed almost $50 million in distributions from News Corp last year on his 318 million shares.

An even more startling comparison is to consider this editorial published by Rupert’s New York Post on the morning of the AGM, which congratulated New York City Council speaker Christine Quinn for ditching a proposal to introduce a modest paid sick leave scheme that Australians of all political hues would regard as stock standard.

As 774 ABC Melbourne morning presenter Jon Faine observed yesterday, these billionaires have an altogether different mentality.

Rupert’s maths is also a little confused. Rather than Buffett being able “to sell a few shares every year to have many many billions to play with”, he would have to sell about 185 shares at last night’s price of $US124,850, just to muster Rupert’s annual salary.

Producing “many many billions to play with” would require Buffett to sell many thousands of his shares, which is hardly “a few”.

The AFR’s coverage of the News Corp AGM bizarrely described it as “uneventful”, when there were so many interesting elements that some got completely overlooked.

For instance, there was a shareholder proposal from a Kenneth Steiner of New York for a so-called “say on pay”, similar to the non-binding vote that has been prevailing in Australia and the UK for several years now.

It was all laid out in the 75-page proxy statement for the AGM where the board recommended against because its coming anyway through the recently signed “Dodd Frank Wall Street Reform and Consumer Protection Act that requires public companies to provide advisory votes on executive compensation at least once every three years”.

After removing the microphones for floor speakers and declaring the business of the meeting closed, Rupert admitted to shareholders that only 62% of voting shareholders followed the board’s advice to reject a “say on pay” vote.

He declined to answer my shouted question as to whether he voted his 38.4% voting bloc against the say on pay proposal. Either way, it was still a very significant protest that surely should have been included in The Australian’s business lead yesterday, which was headlined “Shareholders prepare AGM hit lists to target executive salaries”.

The story opened as follows: “Several major listed company boards are bracing for a backlash against their remuneration reports at coming annual general meetings.”

It went on to predict the likes of  Paperlinx, Toll, Asciano, Billabong, Crane, Foster’s, Transurban, Boral and ASX would face protests, although the ASX AGM was actually held on September 29 and the remuneration report was approved by 97.6% of voted shares.

A newspaper that wasn’t controlled by a hyper-sensitive media manipulator would have also reported the one piece of remuneration news that emerged over the weekend: Murdoch’s comments about Warren Buffett and the 38% of News Corp shares that were voted for an immediate say on pay despite the board’s recommendation to the contrary.

It will be amusing to read the Murdoch press cover all these forthcoming remuneration votes in Australia when their own top five executives trousered $US80 million in 2009-10 and actively deny News Corp shareholders a chance to reflect on this.

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW