Mur­doch sur­vives Sky share­holder re­volt

The Guardian - - FINANCIAL - Gra­ham Rud­dick Me­dia ed­i­tor

James Mur­doch has nar­rowly sur­vived a re­bel­lion by in­de­pen­dent Sky share­hold­ers to be re-elected as chair of the Bri­tish satel­lite broad­caster.

Just 51.6% backed Mur­doch to stay in the top job. Con­cern among the dis­senters cen­tred on what they see as a po­ten­tial con­flict of in­ter­est, given his role as chief ex­ec­u­tive of 21st Cen­tury Fox, which is try­ing to buy Sky in an £11.7bn deal.

Only 36% sup­ported the com­pany’s re­mu­ner­a­tion re­port. The pay pack­age handed to Sky’s chief ex­ec­u­tive, Jeremy Dar­roch, quadru­pled to more than £16m in the year to the end of June, in spite of a hefty fall in an­nual prof­its at the broad­caster’s UK and Ire­land busi­ness. About £12m came from a long-term in­cen­tive scheme, but he also re­ceived an al­most max­i­mum an­nual bonus of £1.9m.

The City in­vest­ment group Royal Lon­don said Mur­doch’s role as chair­man was in­ap­pro­pri­ate and that the com­pany needed a “truly in­de­pen­dent” chair. It also said ex­ec­u­tive pay at Sky was too com­plex and that bosses could re­ceive huge pay­outs if the Fox deal wents through. Three big share­holder ad­vi­sory groups – In­sti­tu­tional Share­holder Ser­vices, Glass Lewis and Pirc – had also urged in­vestors to op­posed Mur­doch’s re-elec­tion and ex­ec­u­tive pay.

De­spite their po­si­tion, Mur­doch’s level of sup­port in­creased from 47% last year, and the votes at­tached to Fox’s 39% share­hold­ing in Sky meant that both his reap­point­ment and the re­mu­ner­a­tion re­port were ap­proved com­fort­ably over­all.

Fox’s bid for the 61% of Sky it does not al­ready own is be­ing in­ves­ti­gated by the Com­pe­ti­tion and Mar­kets Au­thor­ity (CMA) on the ba­sis of me­dia plu­ral­ity and broad­cast­ing stan­dards. Karen Bradley, the cul­ture sec­re­tary, an­nounced last month that she was re­fer­ring the deal to the CMA af­ter a re­view by the me­dia reg­u­la­tor, Of­com, cre­ated “suf­fi­cient un­cer­tainty” about the tie-up.

At the Sky an­nual meet­ing Mur­doch said the com­pa­nies were “en­gaged con­struc­tively with the reg­u­la­tory au­thor­i­ties” about the deal. He re­fused, how­ever, to an­swer ques­tions from in­vestors about whether Sky’s rep­u­ta­tion could be in­su­lated from the sex­ual ha­rass­ment scan­dal at Fox News, which led to the de­par­ture of Roger Ailes, its chair, who has since died, and Bill O’Reilly, an an­chor pre­sen­ter.

He also re­fused to com­ment on whether Fox was get­ting a “sweet­heart deal” on the price it will pay for Sky.

One share­holder, who did not give his name, said to Mur­doch: “I have the same prob­lem with my dad. Even though I wasn’t tal­ented he put me in charge.”

In re­sponse to the ques­tion about the Fox News scan­dal, Dar­roch said the “whole board are in­cred­i­bly sup­port­ive and be­hind Sky”. Martin Gil­bert, the deputy chair, said the board had looked at the Fox takeover in the best in­ter­ests of share­hold­ers and had held im­par­tial dis­cus­sions that did not in­clude Mur­doch.

Pho­to­graph: Bryan Bed­der/Getty Im­ages

James Mur­doch was backed by 51.6% of in­de­pen­dent Sky in­vestors to re­main as chair

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