Sky head honchos look to head off shareholder disquiet over pay and independence

 
Oliver Gill
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James Murdoch (right), the chair of Sky, alongside further Rupert (centre) and brother Lachlan (Source: Getty)

Sky's top brass will this week hope to head off shareholder fury over bumper pay and questions about their independence from suitor 21st Century Fox.

The media behemoth will hold its annual general meeting this Thursday alongside revealing its first-quarter figures.

On Friday, Royal London was the first major shareholder to break ranks from its asset manager counterparts, slamming James Murdoch's position of Sky chair as "inappropriate".

Royal London also voiced concerns about executive remuneration, saying its basis had "the potential to deliver unacceptably high levels of pay".

Meanwhile, Pirc, ISS and Glass Lewis, which advise institutional investors on how to vote, have also called on shareholders to vote against pay packets and Murdoch's reappointment as chair.

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

"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," said Royal London corporate governance manager Ashley Hamilton Claxton.

Pirc said chair Murdoch is not independent by virtue of the fact he is Sky's former chief executive and he is the son of Rupert, the owner of 21st Century Fox. The US media giant owns 39 per cent of Sky's stock and is the process of a protracted takeover attempt for the remaining shareholding.

"[Murdoch] should not be connected a controlling shareholder in order to protect the rights of the minority shareholders," Pirc said.

Pirc also opposes the reappointment of Formula One boss Chase Carey as a non-executive director because he is a "representative" of 21st Century Fox, having previously been Fox's chief operating officer.

UBS analysts expected the FTSE 100 firm to report 4.7 per cent revenue growth in the first quarter to £3.3bn. Earnings are expected to rise by 4.3 per cent to £546m.

Fox's takeover attempt is the subject of a review by Britain's competition regulator.

"We think regulatory hurdles for the Fox/Sky deal are surmountable," wrote UBS.

Read more: Royal London to vote against re-election of Sky chair James Murdoch

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