Murdoch survives Sky shareholder revolt
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.
James Murdoch was backed by 51.6% of independent Sky investors to remain as chair