Rupert Murdoch continues to make CEO succession a high-profile issue at News Corp. In the company’s just-filed 2008 proxy filing, the first item of note is that the company’s longtime No. 2, News Corp. President Peter Chernin, gets paid as much as the top boss. In 2007, they shared the same $8.1 million salary, but after stock options and incentives, Chernin brought in $28.8 million compared to Rupert’s total take of $27.6 million.
Chernin’s employment agreement also gives him a “put,” allowing him to require the company to offer him six-year motion picture and television production agreements if he “resigns after declining to replace Mr. K.R. Murdoch as Chief Executive Officer….” The put also applies if he just quits or is terminated with or without cause. More important from a succession standpoint, Chernin gets a $40 million lump-sum severance payment if he is terminated without cause or leaves for “good reason”– that is, if he isn’t tapped as Murdoch’s successor.
In fact, Chernin seems well hedged against any scenario. According to the filing, if he is offered the top job, but on unacceptable terms, he can resign, collect $29.6 million and start hanging out with movie starlets. If he gets passed over, he is free to resign, gets to keep his equity compensation and leave with that $40.0 million parting gift — total value $90 million.
Reporting by contributor Debra Fiakas, who does not hold a financial interest in any stocks mentioned in this article. The 10-Q Detective has a Full Disclosure Policy.
