News Corp. chief operating officer Chase Carey is taking a 50% salary haircut in the coming fiscal year, part of an effort by the media giant to tie executive compensation more closely to stock performance.
News Corp stock is down about 5% so far this year. In the past five years the stock has fallen about 16%, behind the S&P 500 Index. In a Securities and Exchange Commission filing Tuesday, News Corp. said that its new compensation framework is intended to increase the total portion of an executive officer's salary that is performance based and to tie that performance to its equity. The effort replaces the old bonus structure, which was tied to the company's earnings per share.
As a result, News said in the filing that it would reduce Carey's annual base compensation from $8.11 million to $4.05 million in fiscal 2011, which ends in June of that year. But the News Corp executive is still in line for a target award of $10 million (up to a maximum of $20 million) in performance stock units that vest over three years and a separate performance bonus worth $10 million.
Carey rejoined News Corp. in June 2009 from DirecTV. A long-time News Corp. executive, Carey became CEO of DirecTV in 2004 when News owned a controlling interest in the satellite giant. He stayed on at DirecTV after News sold its interest to Liberty Media, and rejoined his former employer when former News Corp. COO Peter Chernin decided not to renew his employment deal. According to SEC documents filed at the time, Carey's employment agreement with News called for him to earn as much as $43 million in salary, performance and signing bonuses and stock awards in fiscal 2010. However, it is unclear as to what his actual compensation was in fiscal 2010, as News Corp, has yet to file its proxy statement for that year.
Other executives had their bonus compensation awards amended, but apparently kept their base salaries intact.
Chief financial officer David DeVoe, who recently signed a new five-year employment deal extending his contract to 2014, agreed to a performance bonus of $5 million annually, capped at a maximum of $10 million. His PSU awards could reach another $2.5 million in fiscal 2011. Chairman Rupert Murdoch agreed to a 2011 target bonus of $12.5 million (capped at $25 million) and another $4 million in PSU awards. His son, head of Europe and Asia operations James Murdoch, is eligible to receive a performance bonus of $6 million (capped at $12 million) and his PSU award is valued at another $6 million, according to the filing.
News Corp. stock was down 32 cents (2.1%) to $15.05 each in early afternoon trading on Aug. 3.