The top men at News Corporation have had their ‘qualitative bonuses’ cut by half because of the phone hacking scandal in the UK. The quantitative element remained intact, though, as the share price has risen 23 per cent.
The businesses have certainly done well but, clearly, the main spur to the stock boost was the announcement that the Corp is slitting into two; ‘new’ electronic media and ‘old’ publishing. The shareholders have wanted this for a long time but – despite disingenuous protestations to the contrary – Rupert Murdoch has always resisted; he’s never wanted the empire he built to be dismembered.
So, the irony: the management are blamed and ‘punished’ for running a corporation capable of flagrant and persistent criminal activity, but are rewarded when the corporate restructuring necessitated by those activities happens to boost the share price. Heads to you win, tails you win. And quite a lot, see below.*
Meanwhile, another prominent actor in the phone hacking saga has left the media stage (though his role in the drama is likely to continue to haunt him wherever he goes.) In Prime Minister David Cameron’s cabinet reshuffle, DCMS Secretary Jeremy Hunt has been moved, in fact, incredibly, promoted to Health Secretary. The fact that the Levenson Inquiry into phone hacking, which is extremely unlikely to be complimentary to Hunt, reports before the end of the month is not coincidental.
What about the quality of the new minister Maria Miller, promoted from Work and Pensions? I’m sure even she would admit an essential quality was her gender; Cameron got rid of two of the tiny number of top ministers who were women, and Miller was probably the most senior of those in the next tier down.
More than that it is hard to say, as she appears to have risen without trace, though with a reputation for diligence in the unglamorous but complex task of pension reform. Quiet application will be a good qualitative change after the ‘look at me’ antics of her predecessor.
* Rupert Murdoch received a total of just over $30 million, down almost 10 per cent on last year. The total included a bonus down from $12.5 million to $10.4 million.
COO Chase Carey received $24.7 million, down from $30.1 million. His bonus fell from $10 million to $8.3 million.
The CFO David DeVoe’s total package fell from $18.2 million to $10.7 million, with a bonus down from $5 million to $4.17 million.
James Murdoch received $16.8 million, up from $11.9 million. He declined his $6 million bonus last year but received $5 million this year.