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Media CEOs Made More Last Year Than Chiefs In Autos, Energy, And Finance

Executive compensation payOur annual Out Of Whack executive pay analysis already told you about the eye-popping compensation packages that Big Media CEOs made last year. But AP adds more context to the story this morning by showing that the amounts not only are high in absolute terms, they’re also outsized in comparison with the rest of corporate America. Six of the country’s 10 highest-paid CEOs come from media: CBS’ Les Moonves (No. 2, $65.6M), Viacom’s Philippe Dauman (No. 5, $37.2M), Disney’s Bob Iger (No. 7, $34.3M), Discovery’s David Zaslav (No. 8, $33.3M), Time Warner’s Jeff Bewkes (No. 9, $32.5M), and Comcast’s Brian Roberts (No. 10, $31.4M).

What’s interesting in the AP story, based on data from corporate proxies compiled by research firm Equilar, is how media chiefs compare with CEOs at companies that have far more impact on the economy. For example, ExxonMobil’s Rex Tillerson came in at No. 12 with $28.1M, Ford Motor’s Alan Mulally was No. 18 with $23,2M, Miles White of pharmaceutical giant Abbott Laboratories was No. 29 with $20.9M, Goldman Sachs’ Lloyd Blankfein was No, 37 with $19.9M, and General Electric’s Jeffrey Immelt was No. 43 with $19.2M. And last on the list of 50 was Coca-Cola’s Ahmet Kent with $18.2M. Last year’s highest-paid CEO was Anthony Petrello of oil and gas drilling company Nabors Industries with $68.2M.

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Big Media Moguls With Out-Of-Whack Compensation: Exclusive Deadline List

Highest Paid Media ExecutivesHere’s a question to ask yourself if you aren’t sure whether media mogul pay reflects merit or cronyism: Did Viacom and CBS executive chairman Sumner Redstone deserve $93M, an 80% year-over-year increase, in the combined compensation he received from the companies in 2013? The answer to this query, and others like it, seems especially relevant here in Deadline’s fourth annual effort to try to make sense of the outsized sums media companies pay their leaders. They’re among the most lavishly compensated in corporate America where CEOs made 206 times what the average worker did in 2011, up from 26.5 times in 1978, economist Thomas Piketty notes in his surprise bestselling new book about growing wealth disparities. Compensation 1That strikes many as fundamentally unfair: The California legislature is weighing a bill that would raise tax rates for companies that give their CEOs more than 100 times the average pay for their workers.

Here’s our contribution to the discussion: a tally of the highest-paid executives in media, with metrics and analysis to help you decide what they’re worth. The chart on the right (click to enlarge) shows media execs whose compensation exceeded $10M in 2013 according to company proxies. Below you’ll find our in-depth look at the top 11 earners on the list. Why 11? That enables us to add Rupert Murdoch, who shouldn’t be left out of any discussion of media wealth and power. Those in this Group of 11 collectively made $448.6M in 2013, +15.6% vs 2012, with their median pay  +8.3% to $32.5M.

Related:
Out Of Whack – 2012
Out Of Whack — 2011
Out Of Whack — 2010

One of the things you’ll see is how much Redstone contributes to the high level of executive pay in media. He and other leaders at corporations he controls occupy four of the 11 spots on our list. That has a ripple effect: All companies represented here (with a caveat, discussed below, for News Corp) include Viacom and CBS in the list of peers against which they benchmark pay for their own execs. And Redstone isn’t all that unusual. You frequently see high pay at enterprises, like many in media, run by families that own little equity but control decision-making by virtue of their supervoting shares.

Boards usually justify their high outlays by pointing to metrics of company success, which they credit to the CEOs. But while those on this list are smart and shrewd, it’s worth asking how much of their good fortune — including their rising stock prices — also represents good luck. Keep in mind that all of the media powers represented by this year’s top 11 own broadcast and/or pay TV channels. Cable and satellite companies complain that these programmers have oligopoly power to raise prices on distributors. Many are aggressively doing so, which distributors say pressures them to raise your rates. Programmers also benefit from a new source of cash: license fees from digital services including Netflix and Amazon Prime.

Executive compensation payOur list and the charts that follow include Deadline’s annual Out-of-Whack analysis. It illustrates not only that CEOs make vastly more than the public. Some boards are far more generous to the top dog than they are to others in the C-suite. That could be a sign that directors are in the CEO’s pocket, or lack confidence in their executive bench, many corporate governance experts say. In any case, research shows that lopsided outlays promote groupthink, damage morale, and often depress a company’s stock price. It’s a judgement call as to how much of a disparity is too much. Yet those who track the phenomenon typically become alarmed when a CEO makes more than three times the median for the four other top execs whose income must be disclosed to shareholders per SEC rules. Eighteen of the 30 companies we monitor and that have filed information for 2013 failed the test, often miserably, up from 14 out of 31 last year. Read More »

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Charter And Others Prepare To Challenge Time Warner Cable At Its Annual Meeting

It’s not WrestleMania, but Time Warner Cable shareholders can expect more excitement than usual at their annual meeting this year: time-warner-cable-logoThe company’s preliminary proxy, out this morning, includes proposals from Charter Communications and other investors  that could create problems for TWC management as it tries to sell the No. 2 cable giant to No. 1 Comcast.

Charter — which was the runner up in the bidding contest, but hasn’t given up — wants to change the by-laws to fix the size of the TWC board at 13 instead of allowing directors to change it when they want. Charter plans to propose its own TWC board slate, and no doubt wants to ensure that directors don’t boost the size of the body to dilute the impact if the challengers win. TWC naturally urges shareholders to reject Charter’s candidates, and the proposal. “Recruiting qualified candidates is a challenging and time-consuming process, and the Board of Directors believes that it is in the best interests of the Company’s stockholders for the Board to retain the flexibility to either increase its size if a highly-qualified candidate becomes available or to decrease its size if a director declines to seek reelection or for other reasons,” the company says.

Charter also wants TWC investors to support a change in the by-laws to repeal any changes made without shareholder support after July 26, 2012. Here, too, TWC’s board urges a “no” vote saying that the resolution “represents no … Read More »

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Disney’s Avoids Shareholder Showdown With Last-Minute Board Guideline Change

By | Tuesday March 18, 2014 @ 5:25am PDT

The change appears to have appeased shareholders who are still seething over Disney’s decision to make Bob Iger both CEO and Chairman — and scratches a potentially embarrassing vote today over a proposal that could have made the process of selecting board members slightly more democratic. disney6The company says in an SEC filing this morning that it agreed to change its Corporate Governance Guidelines so that, in the future, the chairman will be an independent director unless the board decides it would be best to give one person both jobs. If it does, then directors have to justify it in writing every year and designate an independent board member to be the Lead Director. In return for the change, the California State Teachers Retirement System (CalSTRS) and others withdrew a proposal that would have required Disney to list in its proxy candidates for as many as a fifth of the board seats nominated by firms that own 3% or more of the shares for at least three years. Vanguard Group, State Street Global Advisors, BlackRock, MFS Investment Management, and the Laurene Powell Jobs Trust (which controls the shares formerly owned by Steve Jobs) are the only shareholders that would have qualified. Advisory firms Institutional Shareholder Services and Glass Lewis, and several major pension funds, supported the resolution similar to one endorsed last year by owners of about 40% of Disney’s shares.

Supporters said that the change would “enhance [Disney's] accountability to shareholders.” Many believe that the … Read More »

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TiVo Shareholders Reject Calls To Challenge CEO’s Compensation

By | Thursday August 1, 2013 @ 3:04pm PDT

Shareholders at TiVo’s annual meeting yesterday approved the company’s $11.5M compensation last year for CEO Tom Rogers, rejecting pleas by two leading proxy advisory firms to challenge the salary package. Nearly 60% of the votes cast for or against supported the board’s award for Rogers while 40% opposed in the federally mandated “Say On Pay” advisory vote, according to an SEC filing today. Most CEOs win overwhelming support. Rogers’ pay became an issue after advisory firm Glass Lewis gave TiVo an “F” grade for failing to adequately link pay to performance. Institutional Shareholder Services raised similar objections, and said that TiVo benchmarked Rogers’ pay against CEOs at much larger companies. The board said that Roger’s compensation reflected the company’s “strong” operating results, and the 24.9% appreciation in the stock price during the fiscal year. They also said that they made a “strong linkage between pay and performance.” 

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TiVo Shareholders Urged to Challenge CEO’s Compensation

By | Thursday July 11, 2013 @ 8:59am PDT

Two of the most prominent proxy advisory firms, Glass Lewis and Institutional Shareholder Services (ISS), want investors to oppose TiVo CEO Tom Rogers’ package at the July 31 annual meeting in Menlo Park, Cal. The so-called “Say On Pay” vote is strictly advisory, but shareholders rarely break with management. A rejection would be deeply embarrassing for Rogers and the board. Directors agreed to a $11.5M compensation package for Rogers for the year that ended in January 2013, up from $6.7M in 2012 and $1.7M in 2011. TiVo shares appreciated 24.9% during the last fiscal year. But Glass Lewis gives TiVo an “F” grade for failing to adequately link pay to performance. TiVo “does not utilize a sufficiently objective, formula-based approach,” the firm says. It adds that directors inflated Rogers pay by benchmarking it to compensation for CEOs at companies that are at least twice TiVo’s size measured by annual revenues. ISS raised similar objections, and listed 23 companies that it says would provide more appropriate benchmarks. Read More »

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Netflix Shareholders Overwhelmingly Support Corporate Governance Reforms

By | Friday June 7, 2013 @ 4:08pm PDT

Investors rarely reject management’s views on such matters, especially at a time when a company’s stock is soaring. Yet despite the 250% increase in Netflix‘s price during the past 12 months, shareholders today resoundingly supported several changes to democratize the way the company is run. A motion to repeal the classified board — where the seven directors serve multiyear terms, and only a few are up for re-election each year — won with 88.4% support. More than 80% said that uncontested board candidates should only be elected if they win a majority of the vote. A similar number want shareholder motions to pass with a majority vote — ending requirements for a supermajority. And 73% want Netflix’s chairman to be an independent director, which would mean that Reed Hastings couldn’t be both CEO and chairman. Read More »

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NYC Comptroller Launches Campaign To Shake Up Cablevision Board

By | Wednesday April 24, 2013 @ 2:32pm PDT

2nd UPDATE, 3:00 PM: Now here’s a response from NYC Comptroller John Liu to Cablevision’s response to him: “The Cablevision board may have helped the Dolan family shareowners extract great value over the past decade, thanks to the many family members on the payroll, their excessive pay, and pervasive related-party deals. The board hasn’t helped create superior value for public shareowners, however. Cablevision’s total shareowner returns substantially lag its peers over the past 10 years. These are among the reasons shareowners have repeatedly voted for boardroom change. It’s baffling that three directors who repeatedly failed to receive majority support remain on the board.”

UPDATE, WEDNESDAY 4:00 PM: Cablevision just offered this response to NYC Comptroller John Liu: “This is one of many letters that Mr. Liu sends to companies, and we are baffled because Cablevision board members have helped to create great value for Cablevision shareholders over the past decade. This strikes us as an attempt to distract attention from the indictment and ongoing trial of Mr. Liu’s campaign.”

PREVIOUS, WEDNESDAY 2:32 PM: The New York mayoral candidate will add drama to the company’s annual meeting May 23 on Long Island. Comptroller John Liu, who controls the city’s 532,020 Class A Cablevision shares, says in a letter to other investors that the five directors that public shareholders can elect have Read More »

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Did Viacom Slight Shareholders By Naming Deborah Norville To The Board?

By | Friday March 22, 2013 @ 5:20pm PDT

Corporate governance practices at Viacom have been so bad for so long that I was tempted yesterday to just laugh off the announcement — made right after the annual shareholder meeting — that it has appointed Inside Edition anchor Deborah Norville to its 15-member board. Sumner Redstone owns about 79% of the voting shares. What he says goes. So what difference does it make if the board includes someone who has never demonstrated an interest in corporate finance or affairs? Norville has ”more than 30 years of media and television experience and brings a unique perspective to our board that enhances the diversity,” a Viacom spokesman says.

Sorry, but that’s not good enough. Viacom is a $30.8B global company that employs nearly 10,000 people. And Redstone controls 79% — not 100%. He gladly takes other people’s money to run the enterprise. That means he has both a legal and moral responsibility to protect them as well as himself. It should lead him to bend over backwards to ensure that the board represents shareholders, and does so effectively. It needs people who know what’s on investors’ minds, who are well versed in the issues being discussed, and feel independent and fearless enough to stand up to Redstone when they think he’s wrong. Read More »

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Will Disney Shareholders Challenge Iger Tomorrow?

By | Tuesday March 5, 2013 @ 1:57pm PST

The Walt Disney CompanyUnder more normal circumstances, the Orpheum Theater in Phoenix would briefly replace Disneyland tomorrow as Disney‘s “happiest place on earth.” The company’s stock is trading around an all time high as shareholders prepare to convene there for their annual meeting. But attendees instead are girding for a fight over resolutions that could shape the way Disney’s run, especially after Bob Iger steps down in June 2016. Many shareholders support a movement sweeping corporate America to democratize governance policies, giving the people who ostensibly own a company more flexibility to check the power of CEOs and directors. Disney infuriated them in 2011 by agreeing to make Iger chairman as well as CEO, which critics say puts him in charge of the team that’s supposed to judge his performance. And the company further enraged shareholder rights advocates recently when it gave Iger a 20.3% raise with a package for fiscal 2012 worth $40M — even though 43% of Disney shareholders opposed management in the federally mandated say-on-pay advisory vote at last year’s annual meeting.

That set the stage for tomorrow: California teachers’ fund CalPERS, and proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, are among the groups asking shareholders to oppose Disney in the say-on-pay vote. They also support two shareholder resolutions that Disney opposes. One would enable some stock owners to nominate candidates for the board — an idea that’ll be raised at several companies this year. The second urges the board to amend the company’s governance guidelines to prevent a CEO after Iger from also serving as chairman, except under brief and unusual circumstances. Read More »

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Can News Corp Investors Force Rupert Murdoch To Give Up Chairman Role?

By | Thursday October 4, 2012 @ 1:25pm PDT

UPDATE, 2:38 PM: Add the influential ISS Proxy Advisory Services to the shareholder guidance firms that support the proposal favoring an independent chairman at News Corp. “Based on such issues as the phone hacking allegations and the board’s response, as well as other problematic board actions over recent years, including unwarranted adjustments made under the company’s compensation program in the most recent fiscal year, it appears that shareholders would benefit from increased independent leadership of the board,” it says in a new report. ISS adds that the lead director lacks the power “to counterbalance the combined CEO/chairman role.” Still, ISS recommends a vote for all the board candidates — a change from last year when it opposed all nominees except for James Breyer and Joel Klein.

PREVIOUS, 1:25 PM: The odds are slim that a resolution by Christian Brothers Investment Services that would require the chairman to be independent of management will succeed at the company’s shareholders’ meeting in Los Angeles on October 16: Murdoch and his family control about 40% of the voting shares and like things the way they are. Still, several shareholders hope to make this a big issue — and it’s won the support of advisory firms Hermes Equity Ownership Services and Glass Lewis. The proposal says that following disclosures of widespread hacking and bribery at News Corp’s UK tabloids, an independent chair would enable the company to “create greater independence and objectivity on the board, begin to rebuild the public confidence and trust that is critical to a major news organization, and assure shareholders that governance failures are being addressed.” Glass Lewis agrees. It says that “vesting a single person with both executive and board leadership concentrates too much oversight in a single person and inhibits the independent oversight intended to be provided by the board on behalf of shareholders.” The firm takes a dim view of News Corp’s governance. It gives the company a “D” grade in linking executive pay to performance and is urging shareholders to oppose five board candidates: Natalie Bancroft, David DeVoe, James Murdoch, Lachlan Murdoch, and Arthur Suskind.

Read More »

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Disney Board Opponents Made Little Headway With Shareholders

By | Friday March 16, 2012 @ 3:09pm PDT

Corporate governance geeks will be interested in this footnote to the shareholder vote for the Disney board at Tuesday’s annual meeting: The results, just released, suggest that advisory firm Institutional Shareholder Services had more sway with the company’s stock holders than its rival Glass, Lewis & Co did. Both groups objected to corporate governance decisions, but urged investors to express their anger by opposing different directors. ISS urged a “no” vote for Judith Estrin, Aylwin Lewis, Robert Matschullat, and Sheryl Sandberg — members of the Nominating and Governance Committee who wanted to make CEO Bob Iger Disney’s chairman as well. And Glass Lewis opposed Susan Arnold, John Chen, Fred Langhammer, and Aylwin Lewis — members of the Compensation Committee who allegedly didn’t link executive pay to performance. Glass Lewis also doesn’t think  Orin Smith belongs on any board after serving as a director of Washington Mutual, the savings and loan association giant that collapsed in 2008. All were handily relected. Lewis — the only candidate both groups opposed — had the worst result with 73.4% support. Among the rest, the candidates ISS opposed received the lowest votes with an average of 82.4% in favor. The directors Glass, Lewis wanted to dump averaged 86.8% approval. As for the two board members that passed muster with both groups: Iger sailed through with 96.7% approval, but Monica Lozano beat him with 98.9%.

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Disney Shareholders Support Exec Pay, But By Lower Margin Than Last Year

By | Tuesday March 13, 2012 @ 9:03am PDT

Disney Bob Iger ShareholdersAbout 56.6% of Disney‘s shares were cast in favor of its controversial executive compensation plan while 42.8% opposed — down from last year when 76.8% supported and 22.7% opposed – according to the preliminary results announced today at the annual meeting in Kansas City. Shareholders also elected the company’s slate of directors; numbers weren’t broken out for each member. Executive pay became a big issue this year after corporate governance analysts Institutional Shareholder Services (ISS) and Glass Lewis & Co urged investors to oppose the package in an advisory vote. Glass Lewis gave Disney a “D” grade on its pay-for-performance analysis — the fourth consecutive year Disney got the grade. “Overall, the Company paid more than its peers, but performed moderately worse than its peers,” the firm said in a recent report. It urged a “no” vote “to signal dissatisfaction with the Company’s executive compensation program and to compel the board and the compensation committee to take corrective action.” ISS also opposed the compensation arrangement, in part to protest the company’s decision to make CEO Bob Iger the company’s chairman as well with the departure of John Pepper. Disney said that the company’s stock has performed well, and that Iger’s role as CEO and chairman will help him to mentor his successor. Read More »

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Connecticut Supports Effort To Keep Disney CEO And Chairman Jobs Separate

By | Thursday March 8, 2012 @ 5:09am PST

Disney Bob IgerThe campaign to block CEO Bob Iger from also becoming Disneys chairman has gained a new supporter. The Nutmeg state’s treasurer, Denise Nappier, says she will use the votes from the 642,000 Disney shares in Connecticut’s retirement funds to oppose the board members on the Nominating And Governance Committee who drove the effort to give Iger the top two jobs this year, when John Pepper steps down as chairman. Nappier’s announcement follows a similar recomendation last week from investor advisory firm Institutional Shareholder Services. “It is quite disturbing that Disney has chosen to embrace a regressive policy that could impair the board’s role to oversee executive management on behalf of shareholders,” Nappier said in a statement cited by Bloomberg. Nappier has also opposed Read More »

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UPDATE: Sumner Redstone Will Attend Viacom Annual Meeting After All

By | Friday March 2, 2012 @ 2:30pm PST

UPDATE, 2:30 PM: The Viacom chairman wasn’t as busy as he thought following the wave of speculation that his earlier decision to skip the shareholder gathering indicated that he was ill — or just indifferent to other investors: “Mr. Redstone very much wanted to attend the Viacom annual meeting,” company spokesman Carl Folta says. “He was able to change his commitment and will participate in person at the meeting.”

PREVIOUS, 1:46 PM: “Sumner owns a majority of the outstanding shares and has never pretended to be anything other than a benevolent dictator” corporate governance expert Robert A.G. Monks says regarding Redstone’s decision to skip Viacom’s annual shareholder meeting in New York on Thursday. The chairman will deliver a video address, but won’t attend due to an unspecified but “unavoidable conflict,” the company says. That fueled some speculation that Redstone, 88, may be sick. “People have been on the watch for a while; it’s not a good sign,” says one veteran Viacom observer. There’s no health problem, the company told Bloomberg: Redstone attended the Oscar awards ceremony and plans to show up later this month when he’ll be presented with a star on Hollywood’s Walk Of Fame. But that makes Redstone’s decision to skip the annual meeting — an event he called, on a date he presumably set — all the more perplexing to governance experts. Read More »

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