Murdoch's Compensation Down to Paltry $18 Million

By: RYAN NAKASHIMA Rupert Murdoch, the chief executive and controlling shareholder of News Corp., saw his compensation drop 40 percent in fiscal 2009 as weak earnings reduced his incentive pay, according to an Associated Press review of regulatory filings.

Murdoch, 78, was awarded a compensation package valued at $18 million, down from $30 million a year ago, according to the review of News Corp.'s proxy filed Thursday with the Securities and Exchange Commission.

His base salary of $8.1 million was unchanged, but his performance-based incentive pay fell 69 percent to $5.4 million from $17.5 million a year ago.

News Corp. owns The Wall Street Journal, Fox television network, 20th Century Fox movie studio, Sky Italia and newspapers in Britain and Australia.

The New York-based media company awards incentive pay based on the change in adjusted earnings per share, and it determined that measure grew 0.87 percent in fiscal 2009 from a year ago, entitling Murdoch to an incentive bonus of $5 million to $10 million. The company ended up approving an amount on the low end of that range.

The company did not say exactly what its adjusted earnings figure was, but said it excluded such things as asset impairment charges, writedowns on investments, gains or losses from asset sales, extraordinary items, restructuring charges, and gains or losses from debt or capital issuances.

The company's adjusted earnings calculation differs widely from the adjusted earnings per share figure used by analysts ? which showed a 43 percent drop to 66 cents per share from $1.15 a year earlier.

By that calculation, none of the executives should have earned any incentive pay.

The company said its formula for compensation and its method of calculating adjusted earnings per share align executives' interests with those of shareholders while not penalizing them for unanticipated or uncontrollable events.

Murdoch's stock option and restricted stock grants were unchanged at $4 million and all other compensation, for items such as personal use of company aircraft and a car allowance, fell 6 percent to $380,000.

Over the fiscal year, which ended June 30, non-voting Class A shares fell 39 percent to $9.11 from $15.04 a year earlier.

Murdoch controls nearly 40 percent of the voting Class B shares of the company, mostly through a family trust.

The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.


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