This time last week, 85-year-old Rupert Murdoch had just got through the first same-day AGM double-header of his long corporate career, with both 21st Century Fox and News Corp completing their annual governance and voting ritual with little fuss.
I last attended one of the Murdoch shareholder gatherings in Los Angeles back in 2014 and when visiting the bathroom in the Zanuck Theatre within the Fox Studios compound, overheard one Murdoch minion say to another: “We’ve done everything possible to turn this into a non-event.”
If that’s the criteria, 2016 was definitely a successful exercise. Fewer than 15 independent shareholders attended the two meetings, no journalists turned up, debate was contained, both meetings were short and the family gerrymander managed to overwhelm material protest votes, which were largely ignored by the press.
After raising almost $3000 from donors, I flew out of Australia at 11.30am last Thursday and landed in Los Angeles at 7am Thursday, leaving enough time to make it to Fox Studios for the 21st Century Fox AGM, which started at 10am.
The three highly paid Murdoch men had the top three positions next to the microphone, and after Rupert Murdoch mumbled his way through a four-minute written statement with no slides, he handed over to co-chairman Lachlan Murdoch, who ran the meeting.
No female directors or executives were given a spot on the stage at either meeting, but we did manage to draw Fox’s remuneration committee chair James Breyer into the debate on Murdoch family pay, which unfolded as follows:
Stephen Mayne: A question on remuneration. The Murdochs have been paid US$606m over the past 18 years from public companies, according to the statutory accounts. It’s up this year, from US$48 million in 14-15 to US$84 million, which is a record, partly because you came on, Lachlan. So at US$84.7m for the controlling family and spread across the three top executives, it is obviously a huge amount of money. I am not aware of any other family which is taking that much money out of a public company? So my question is to the independent directors and probably to Mr Freyer as chair of the remuneration committee: why is the pay so huge for the Murdochs? We’ve got four independent members on the remuneration committee. Why are you allowing such over-sized payments? Has there been a protest vote in the proxies? We’ve only heard the overall result, we haven’t heard the actual protest. What do your independent shareholders think about these record levels of pay and is it going to come down or are we going to see it continuing at these levels?
And I guess further to the point, when will see this super-majority of independent directors which is mentioned again in the proxy statement but which we still haven’t got. It seems that our independent directors are not controlling executive pay well enough for the Murdochs and we still haven’t got our super-majority and I just want to hear from the independent directors who shouldn’t be sitting back and allowing this clamp down on debate as well. So please tell us: why is pay so out of control and when we are going to see a super majority of independent directors?
Remuneration committee chair Jim Breyer: Thank you for the question. On our ongoing annual monthly review, we believe the base statistics, both historically, currently and in the future, not only align the Murdochs and the senior executives with the shareholders, we also believe the statistics speak to the longevity of management and design. And we have accomplished, we believe, very long-term senior management and leadership compensation that reflects extremely well and building the competitive advantage versus our peers over time.
Talk about corporate gobbledygook and not answering the question! So what do the independent Fox shareholders think of these record Murdoch salaries, which equated to a staggering $111 million in 2015-16, as was explained in this recent Crikey piece?
Firstly, you need to remember there are 361 million votes (45.2% of the total voting stock) controlled by the Fox directors, comprising 311 million by the Murdochs and 50.3 million by activist fund ValueAct, which struck a peace deal after CEO Jeffrey Ubben was given a Fox board seat last year.
Lachlan Murdoch refused to disclose the proxies during the Fox AGM debate, but the final results showed there was a record remuneration report protest vote, with only 486.6 million votes in favour and 220 million against, way up on the 45 million against votes at the previous AGM.
Under Australian law, the Murdochs wouldn’t have been allowed to vote, given the obvious conflict, but even with their controlling stake, it still would have caused a strike with 31.1% against.
However, strip out the board votes and you are talking a massive 63.7% of independent Fox votes opposing the remuneration report, up from less than 15% in 2014-15 before Lachlan’s over-the-top pay deal commenced.
This is much more substantial than protest votes at the likes of Nine Entertainment Company, which has received substantial coverage in The Australian.
But has any Murdoch outlet reported the family’s pay heist or the protest by Fox investors? Not on your life.
So much for free speech and “fair and balanced” coverage, something Lachlan told shareholders Fox News always stick to.