Sky chair James Murdoch re-election labelled "inappropriate" and to be opposed by Royal London

 
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James Murdoch is currently the chief executive of 21st Century Fox and the chairman of Sky (Source: Getty)

One of the UK's largest fund managers today said it will oppose the re-election of Sky chair James Murdoch next week.

Royal London, which holds around £106bn of assets under management called Murdoch's reappointment "inappropriate".

The move follows criticism from shareholder groups earlier this week querying the independence of top Sky execs from suitor 21st Century Fox.

Ashley Hamilton Claxton, a corporate governance manager at Royal London Asset Management, said:

We continue to believe that James Murdoch’s position as chairman is inappropriate, and that minority shareholders at Sky would be better served by a truly independent Chairman. Independent oversight of the board is particularly important given Fox’s ongoing bid to acquire Sky. Therefore we are voting against Mr. Murdoch’s re-election.

Earlier this week shareholder body Pensions and Investment Research Consultants (PIRC) also advised a vote against Murdoch's re-appointment.

PIRC said the son of 21st Century Fox owner Rupert Murdoch was not considered independent on three counts. That he was the former chief exec of Sky, he is part of the controlling family, and "there are concerns over his appointment as an objective nomination process was not used".

James Murdoch is chief executive of 21st Century Fox, which currently owns 39 per cent of Sky shares and is in a protracted process to buy the shares in the media behemoth that it doesn't own.

Pirc also said 21st Century Fox board member and the boss of Formula One, Chase Carey, was not independent because of his association with US media firm and advised a vote against his reappointment as a Sky non-exec.

Read more: Sky exec pay jumps on multi-million pound share payout

Exec pay

Royal London – which has a 0.28 per cent in Sky stake worth £44m – and Pirc also said they would vote against top exec pay at Sky.

Sky chief exec Jeremy Darroch saw his pay jump to £16.3m, while operating head Andrew Griffith was awarded £9.3m. The pair's total remuneration was swelled considerably by bi-annual long-term incentive plan pay-outs.

Hamilton Claxton called Sky's remuneration arrangements "unnecessarily complex" and providing "the potential to deliver unacceptably high levels of pay"

He said:

We are particularly concerned this year that executives may receive their full awards, regardless of performance, if their contracts are terminated following a successful acquisition by Fox.

"For this reason, we are voting against the company’s remuneration policy, remuneration report and the chair of the remuneration committee."

Pirc said the remuneration policy could lead to "excessive pay-outs".

Read more: Legal challenge mounted against Ofcom's Fox/Sky findings