Murdoch reaches out to advisers as Ten's investor showdown looms

LACHLAN MURDOCH has been visiting proxy advisers in a last-minute effort to shore up shareholder support for the Ten Network board before its annual meeting early next month.

By InvestSMART · 21 Nov 2012

By InvestSMART ·
21 Nov 2012

Comments

LACHLAN MURDOCH has been visiting proxy advisers in a last-minute effort to shore up shareholder support for the Ten Network board before its annual meeting early next month.

Proxy advisers raised concerns on Tuesday about the troubled broadcaster's $8.37 million executive pay bill, revealed last week amid turmoil at the network.

The problems include a slumping share price, the departure of the programming chief David Mott and mass staff redundancies.

Mr Murdoch, who is Ten's chairman and a big shareholder, was in Melbourne yesterday to visit the Australian Council of Superannuation Investors, which advises the super fund sector, and the boutique governance advisor Ownership Matters.

He has also met the Australian Shareholders' Association and the Sydney-based proxy adviser ISS.

An industry source said visits by chairmen to proxy advisers had increased in recent years, with some even walking in without an appointment.

"We did have a chat with him in advance of publishing our report to clients," the ISS head of Australian research, Daniel Smith, said. "It's been challenging times for them. Lachlan really hammered in on their focus on ratings and revenue - they've got to bump up both of them."

While ISS has recommended its clients vote for Ten's remuneration report, Mr Smith said the company's large executive pay bill was "the big story".

"Some of our shareholders may be uneasy with that, but that's a problem across the media space," he said.

"At the same time, executives didn't get bonuses, which gives some credence to the idea the board has been paying attention to the fact performance has been pretty bad."

Ten's annual meeting on December 6 will give shareholders the opportunity to grill the board on months of bloodletting at the network. More than 100 journalists have been made redundant.

Up for re-election are Brian Long, a former chairman, and Siobhan McKenna, who runs Mr Murdoch's media investment company Illyria.

Shareholders will also cast a non-binding vote on Ten's remuneration report, which reveals that after being appointed on January 1, the chief executive, James Warburton, received pay worth $1.75 million. In its report to clients, ISS estimates the maximum payable to Mr Warburton under his contract is close to $4.5 million, more than twice the median pay of comparable listed companies.

Discontent among investors over pay levels in the media sector is running high. At its annual meeting last month, Fairfax Media received a "first strike" after the mining magnate Gina Rinehart voted her 15 per cent stake against the board's remuneration report.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What’s going on at Ten Network that everyday investors should know about?

Ten Network has faced a slumping share price, the departure of programming chief David Mott, mass staff redundancies (more than 100 journalists), and scrutiny over an $8.37 million executive pay bill — all of which have heightened investor attention ahead of its annual meeting.

Why did Lachlan Murdoch meet with proxy advisers and investor groups?

Lachlan Murdoch, Ten’s chairman and a major shareholder, visited proxy advisers and investor groups (including the Australian Council of Superannuation Investors, Ownership Matters, the Australian Shareholders’ Association and ISS) in a last‑minute effort to shore up shareholder support before Ten’s annual meeting.

What concerns did proxy advisers raise about Ten’s executive pay and governance?

Proxy advisers highlighted Ten’s large executive pay bill as a key concern. ISS described the pay bill as “the big story,” noting investor unease in the media sector about pay levels, even though executives did not receive bonuses amid poor company performance.

What did ISS recommend about Ten’s remuneration report and what did it say about the CEO’s pay?

ISS recommended that its clients vote for Ten’s remuneration report, but flagged the large pay bill as worrying. ISS reported that CEO James Warburton received $1.75 million after his January 1 appointment and estimated his maximum contractual pay could be close to $4.5 million — more than twice the median pay of comparable listed companies.

What items will shareholders vote on at Ten Network’s annual meeting?

At the annual meeting on December 6, shareholders will have the chance to grill the board, vote on the re‑election of directors (Brian Long and Siobhan McKenna), and cast a non‑binding vote on Ten’s remuneration report.

Who are the directors up for re‑election and why does that matter for investors?

Brian Long, a former chairman, and Siobhan McKenna, who runs Lachlan Murdoch’s media investment company Illyria, are up for re‑election. Their re‑election matters because shareholders can use director votes to hold the board accountable for recent performance, staffing cuts and pay decisions.

Is investor discontent over executive pay limited to Ten Network?

No. The article notes broader investor unease in the media sector — for example, Fairfax Media recently received a “first strike” after major shareholder Gina Rinehart voted her 15% stake against the board’s remuneration report — showing pay disputes are a sector‑wide issue.

How can everyday investors respond if they’re concerned about executive pay and company performance?

Investors can review proxy adviser reports, attend or vote at the annual meeting, ask questions of the board about pay and performance, and consider how pay structures align with results. The article also highlights that proxy advisers’ views and non‑binding remuneration votes are important tools shareholders use to signal concern.