Sky faces shareholders as Fox takeover bid returns to centre stage
Shareholder advisory groups have called on investors to vote against James Murdoch’s re-election at Sky’s AGM.
Sky chairman James Murdoch is set to face shareholders on Thursday amid investor unrest over his independence as the broadcaster remains the subject of a takeover attempt by 21st Century Fox.
Shareholder advisory groups – including Institutional Shareholder Services (ISS), Glass Lewis and Pirc – have called on investors to vote against his re-election at Sky’s annual general meeting and also to rebel against “excessive” pay plans for top bosses.
ISS said in a note: “Having a representative of a major shareholder act as chairman of the board raises corporate governance concerns and appears to represent an assertion of control by Twenty-First Century Fox over the Sky board.”
Mr Murdoch is chief executive of Fox, which is attempting to seize control of the 61% of Sky it does not already own.
James Murdoch’s election as chair of Sky was met with some shareholder dissent last year and investor advisory groups said little has been done to address concerns.
ISS added “there is no material information pertaining to steps taken by the board to address the vote result” after concerns were raised in 2016.
It looks set to be an eventful AGM as the £11.7 billion takeover bid also returns to the political limelight, with MPs questioning Karen Bradley – Secretary of State for Digital, Culture Media and Sport – at a Commons committee hearing on Wednesday.
The grilling comes after she referred the bid to the Competition and Markets Authority for a full blown investigation centred on broadcasting standards.
Pay plans are likewise under the microscope, with Pensions & Investment Research Consultants (Pirc) branding them unnecessarily complex and offering potentially excessive pay-outs.
It said the three different incentive schemes can see pay “significantly exceed 200% of salary” while directors could be rewarded twice for the same performance.
Sky confirmed in its annual report last month that chief executive Jeremy Darroch’s total annual pay packet more than trebled to £16.3 million last year despite annual profits being hit by the cost of broadcasting live Premier League football.
Meanwhile, Sky will also update on trading on Thursday, with the City keen for its views on the UK advertising market and progress on revenue growth after it reported a 5% rise for the year to June 30.
Graham Spooner, investment research analyst at The Share Centre, said: “Followers of the group will be looking at the performance of its European operations especially in Germany and Italy, along with subscriber numbers and retention of existing customers.
“With financial pressures beginning to mount on consumers the slowdown in new customers is likely to have continued.”