News Corporation, the U.S. media group led by Rupert Murdoch, is planning a near-threefold increase in payments to non-executive directors.
THE COMPANY is seeking shareholder approval to lift annual fees paid to eight non-executive board members from a total of $450,000 to $1.2 million.
Directors who stand to benefit include Rod Eddington, chief executive of British Airways; Geoffrey Bible, former Philip Morris chief executive; and Graham Kraehe, chairman of BHP Steel.
Officials at the company - whose assets include Fox Entertainment, News International newspapers and a 35.4 per cent holding in British Sky Broadcasting - said the increase reflected additional boardroom responsibilities. Payments to News Corp’s non-executive directors have been capped at about $450,000 since 1998.
The group has re-organised its boardroom committees to comply with new corporate governance rules and stock exchange regulations. Rupert Murdoch, News Corp chairman, has stepped down from the nominations and share options committee as part of the changes.
Earlier this year, the company issued a new statement on corporate governance policy declaring that its boardroom committees would comprise only non- executive directors.
The decision to increase their pay has been disclosed in a notice to shareholders, issued ahead of News Corp’s annual meeting later this month. It says:
“The increase in fees payable to non-executive directors is necessary to attract qualified individuals to serve as non-executive directors and to compensate them for the additional time spent to ensure compliance by the company with the new corporate governance regulations.”
Most of News Corp’s non-executive directors received payments of between $53,000 and $83,000 in the year to June 30. But Stanley Shuman, managing director of the investment bank Allen & Company, received $120,000.
Non-executives are expected to continue to receive share options; each got 12,000 in the last financial year. Shareholders will also be asked to support a total grant of 3.15m share options to executive directors including Peter Chernin, chief operating officer, and Mr Murdoch’s two sons: James and Lachlan.
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