Revealed: how the Murdoch men looted $1.4 billion in salary from public companies

by | Feb 10, 2020 | Markets

News Corp’s Australian newspapers are quick to attack union leaders and local government bureaucrats for being overpaid, but somehow they’ve missed the biggest salary looting exercise by their own bosses in the history of public company capitalism. Former Herald Sun and Daily Telegraph business editor Stephen Mayne reports.

The Weekend Australian produced a front page story headlined “Sky High Union Pay” which named and tried to shame the highest paid Australian union leaders, while also mentioning the pay packets of our best paid employer association bosses.

Heaven forbid that the CFMEU, Australia’s richest union with net assets of more than $200 million, has more than 20 employees earning more than $220,000 a year.

For goodness sake, compare that with the City of Melbourne, Australia’s best paying local government, where there are 143 staff who earned more than $148,000 in 2018-19.

From time to time, the Murdoch tabloids, particularly the Herald Sun in Melbourne, do enjoy sticking the boot into local government CEOs, alleging they are overpaid. For instance, check out this story from December 26, 2018 where the Herald Sun claimed:

Local council bosses in Melbourne are on massive paychecks, with their average annual salaries even higher than Premier Daniel Andrews.

When it comes to massive packets and sky high bonuses, few are worse than the Murdoch men but, for some strange reason, you never read about this in News Corp newspapers, including that supposed paper of record, The Wall Street Journal.

After doing a painstaking deep dive through 20 years of annual reports produced by News Corp, 21st Century Fox, Fox Corp and BSkyB, michaelwest.com.au is able to produce the definitive account of Murdoch family salary looting of public companies.

And we call it looting because the Murdochs only have board control over the public companies currently trading as News Corp and Fox Corp through an outrageous gerrymander which sees them control 40% of the votes but only around 17% of the stock.

It’s a gerrymander that would make former Queensland Premier Sir Joh Bjelke Petersen blush because more than 60% of the shares on issues are denied a vote.

This allows the Murdochs to stack their boards with compliant directors who in turn go along with ever worsening pay rips off for the controlling family, which these days only comprises the 88 year old patriarch Rupert and his reactionary eldest son Lachlan. (The women don’t tend to get a look in and the progressive son, James Murdoch, has quit his executive roles inside the family-controlled  firms and is now publicly trashing News Corp’s Australian newspapers for pushing endless climate denialism.)

Not that these men need excessive salaries with the family wealth now sitting at an all-time high of almost $30 billion, with Rupert and Lachlan together speaking for around $10 billion of this.

After the circa $100 billion sale of 21st Century Fox’s entertainment assets to Disney last year, a majority of the family’s wealth is tied up in 93.9 million Disney shares which, with the stock closing at $US141 on Friday night, were worth $US13.3 billion. These shares are evenly spilt between each of Rupert’s six children from his three former wives. They are generating about $US164 million a year in cash dividends from Disney.

The Murdochs have no influence over Disney despite being the largest shareholder because there is no gerrymander and they have no board seats.

Meanwhile, back at the slimmed down Fox Corp and News Corp, year after year Rupert continues to vote his 40% stake in favour of the family’s own outrageous remuneration deals at AGMS held in either New York or Los Angeles. If News Corp was still based in Adelaide, this would be illegal under Australian law where only independent shareholders can vote on remuneration reports.

The minority shareholders have been constantly revolting ever since Rupert quit Australia and moved News Corp to Delaware after independent investors had the temerity to defeat an excessively generous director pay proposal at the 2003 AGM in Adelaide.

There have been literally dozens of News Corp and Fox pay resolutions and director election resolutions that were only passed over the past 15 years courtesy of the Murdochs using their 40% gerrymandered stake to over-ride multi-billion dollar against votes lodged by minority and independent shareholders.

And what have they done to take on board investor concern? Absolutely nothing as the pay rorting just gets worse with time.

So, enough scene setting, let’s get to the truly shocking data which shows that Murdoch men have ripped more than $1.4 billion in salary and bonuses from public companies since 1999.

Read it and weep, folks.

2018-19

Fox Corp: Total $US82.2 million (see p35 of the proxy statement)

Rupert Murdoch: $US42.1m
Lachlan Murdoch: $US42.1m
James Murdoch: not disclosed

News Corp: Total $US5.7m (see p21 of proxy statement)

Rupert Murdoch: $US5.03 million
Lachlan Murdoch: $US400,000
James Murdoch: $US270,000

Total both companies: $US87.8 million

2017-18

21st Century Fox: Total $US150.14 million (see p52 of proxy statement)

Rupert Murdoch: $US49.23 million
Lachlan Murdoch: $US50.67 million
James Murdoch: $US50.26 million

News Corp: Total $US6.32m
Rupert Murdoch: $US5.74 million
Lachlan Murdoch: $US331k
James Murdoch: $US248k

BSkyB
James Murdoch, non executive chairman: $US440,000 (see p59 of annual report)

Total across 3 companies: $US156.9 million

2016-17

21st Century Fox: Total $US70.26m (see p52 of proxy statement)

Rupert Murdoch: $US29.3 million
Lachlan Murdoch: $US20.6 million
James Murdoch: $US20.36 million

News Corp: Total $US6.274m
Rupert Murdoch: $US5.68 million
Lachlan Murdoch: $US384k
James Murdoch: $US210k

BSkyB
James Murdoch, non-executive chair: $US440,000 (see p68 of annual report)

Total across 3 companies: $US76.97 million

2015-16

21st Century Fox: Total $US84.7m (see p52 of proxy statement)

Rupert Murdoch: $US34.6 million
James Murdoch: $US26.4 million
Lachlan Murdoch: $US23.7 million

News Corp: Total $US6.615m
Rupert Murdoch: $US5.344 million
Lachlan Murdoch: $US989,748
James Murdoch: $US281,250

BSkyB
James Murdoch, non-executive director: $US89,000 (see p62 of annual report)

Total across 3 companies: $US91.41m

2014-15

21st Century Fox: Total $US43.27 million

Rupert Murdoch: $US27.9m
James Murdoch: $US15.05m
Lachlan Murdoch: $US322,000

News Corp: Total $US5.55 million
Rupert Murdoch: $US5.1 million
Lachlan Murdoch: $US225,000
James Murdoch: $US225,000

BSkyB
James Murdoch, non-executive director: $US104,000 (see p62 of annual report)

Total across 3 companies: $US48.96 million

2013-14

21st Century Fox: Total $US50.03 million

Rupert Murdoch: $US29.25 million
James Murdoch: $US18.7 million
Lachlan Murdoch: $US2.08 million

BSkyB
James Murdoch, non-executive director: $US104,000 (see p75 of annual report)

News Corp: Total $US9.15m
Rupert Murdoch $US8.7 million
Lachlan Murdoch: $US225,000
James Murdoch: $US225,000

Total both companies: $US59.29 million

2012-13

News Corp: Total $US46.13 million

Rupert Murdoch: $US28.9 million 
James Murdoch: $US17 million
Lachlan Murdoch: $US225,000

BSkyB
James Murdoch, non-executive director: $US102,000 (see p75 of annual report)

Total both companies: $US46.23m

2011-12

News Corp: Total $US49.5 million

Rupert Murdoch: $US30 million
James Murdoch: $US16.84 million
Lachlan Murdoch: $US2.66 million

BSkyB
James Murdoch, non-executive director: $US98,000 (see p61 of annual report)

Total both companies: $US49.6m

2010-11

News Corp: Total $US45.7 million

Rupert Murdoch: $US33.3 million
James Murdoch: $US11.9 million
Lachlan Murdoch: $US504,000

BSkyB
James Murdoch, non-executive director: $US98,000 (see p61 of annual report)

Total both companies: $US45.8m

2009-10

News Corp: Total $US34.81 million

Rupert Murdoch: $US22.72 million
James Murdoch: $US10.3 million
Lachlan Murdoch: $US1.79 million

BSkyB
James Murdoch, non-executive director: $US96,000 (see p52 of annual report)

Total both companies: $US34.9m

2008-09

News Corp: Total $US29.41 million

Rupert Murdoch: $US19.88 million
James Murdoch: $US9.2 million
Lachlan Murdoch: $US331,000

BSkyB
James Murdoch, non-executive director: $US82,000 (see p52 of annual report)

Total both companies: $US29.49m

2007-08

News Corp: Total $US38.61 million

Rupert Murdoch: $US27.55 million
James Murdoch: $US10.97 million
Lachlan Murdoch: $US90,000

BSkyB
James Murdoch, CEO: $US3.29m (see p51 of annual report)

Total both companies: $US41.9m

2006-07

News Corp: Total $US33.5

Rupert Murdoch: $US32.14 million
Lachlan Murdoch: $US1.36 million

BSkyB (see p48 of annual report)
James Murdoch CEO: $US2.23m
Rupert Murdoch, non-executive chair: $US50,000

Total both companies: $US35.78m

2005-06

News Corp: Total $US26.1m (inc BSkyB)

Rupert Murdoch: $US25.9 million
Lachlan Murdoch: $US142,000

BSkyB (see p71 of annual report)
James Murdoch CEO: $US1.62m
Rupert Murdoch, non-executive chair: $US53,000

Total both companies: $US27.71m

2004-05

News Corp: Total $US31.61

Rupert Murdoch: $US23.64 million
Lachlan Murdoch: $US7.97 million

BSkyB (see p71 of annual report)
James Murdoch CEO: $US1.62m
Rupert Murdoch, non-executive chair: $US53,000

Total both companies: $US33.28m

2003-04

News Corp: Total $US26.45 million

Rupert Murdoch: $US20.65 million
James and Lachlan Murdoch received combined $US5.8 million

BSkyB (see p38 of annual report)
James Murdoch, CEO: $US1.62m
Rupert Murdoch, non-executive chairman: $US53,000

Total both companies: $US28.12m

2002-03

News Corp: Total $US19.3 million

Rupert Murdoch: $US14.1 million
James and Lachlan Murdoch received combined $US5.2 million

BSkyB (see p29 of annual report)
Rupert Murdoch, non-executive chairman: $US22,000
James Murdoch, director: $US18,000

Total both companies: $US19.34m

2001-02

News Corp: Total $US13.69 million 

Rupert Murdoch: $US9.21 million
James and Lachlan Murdoch received combined $US4.48 million

2000-01

News Corp: Total $US13.24 million

Rupert Murdoch: $US7.58 million
James and Lachlan Murdoch received combined $US5.66 million

1999-2000

News Corp: Total $US9.67 million 

Rupert Murdoch: $US6.53 million
Lachlan Murdoch: $US3.14 million
James Murdoch undisclosed

1998-99

News Corp

Rupert Murdoch: US$6.34 million
Lachlan and James Murdoch undisclosed.

Pay rip-offs getting worse with time

That’s a lot of data to digest but if we break it all down into 5 year batches you can see how the pay rip offs have been getting more outrageous with the passage of time.

Five years until 2003-04: $US84m
Five years from 2004-05 until 2008-09: $US168.2m
Five year from 2009-10 until 2013-14: $US235.9m 
Five years from 2014-15 until 2018-19: $US462m

With the Australian dollar at US66.73c on Saturday, that makes $A1.045 billion over the past 10 years and $A1423.8 million over the past 20 years.

There are a lot of billionaires in the world but the greedy Murdochs are the only family to have taken more than $1 billion in salary and bonuses from public companies. The normal way to get rich is via dividends and surging share prices, with the salary just a minor contributor.

Why can’t the Murdochs be like the Packers?

Say what you like about James Packer and his late father Kerry, but they never took a dollar in salary from public companies.

And they certainly never double dipped like Rupert who, ever since the 21st Century Fox demerger from News Corp in 2013, had been drawing two salaries as executive chairman, even though the companies are completely un-related.

Even Lachlan has drawn the line at that rort, calling himself a non-executive co-chairman of News Corp on $US400,000 a year whilst drawing his main $US42.1 million salary from Fox Corp.

The old man was also paid $US42.1 million by Fox Corp in 2018-19, but then helped himself to more than $US5 million from News Corp as executive chairman even though it has Robert Thomson as its full-time non-Murdoch CEO. Rupert would struggle to do more than 15 hours a week on News Corp matters.

Next time you hear someone on Sky After Dark banging on about free speech, ask them why they never dare mention this Murdoch salary looting? The sad answer is that they would be sacked if they did, such is the autocratic, undemocratic and forelock tugging culture built up by Rupert Murdoch ever since he took control of News Ltd in January 1953, shortly after the death of his father.

Sir Keith Murdoch was into a few rorts of his own, particularly by abusing his position as CEO of the publicly listed Herald & Weekly Times to snap up stakes in Brisbane and Adelaide newspapers for himself, that he then left for Rupert to run.

But Sir Keith would be turning in his grave if he knew how Rupert retained control through an undemocratic gerrymander and then prevailed on hand-picked directors to approve the worst pay excesses ever visited upon public companies.

And all the while lecturing unionists and council workers for being paid too much. The chutzpah and hypocrisy is simply staggering.

# Stephen Mayne is a Walkley Award winning former News Corp journalist, shareholder activist, former City of Melbourne councillor, founder of crikey.com and publisher of wwww.maynereport.com. He’s asked questions of Rupert Murdoch at a dozen AGMs since 1999 and would appreciate any feedback on this piece via @maynereport on Twitter or by email to  [email protected].

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ABOUT THE AUTHOR

Stephen Mayne

Stephen Mayne

Stephen Mayne is a Walkley Award journalist, shareholder activist, former City of Melbourne councillor, former spindoctor for Jeff Kennett’s Victorian Liberal Government, founder of crikey.com and publisher of wwww.maynereport.com. He can be reached on [email protected]

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