Is Rupert Murdoch Overpaid? Of Course, But Not Really (NWS)

News Corp. (NWS) chairman and CEO Rupert Murdoch’s pay fell 14% for 2008 — before you get out the Kleenex, consider that it still totaled $27.5 million.

Given that shares of the stock is off nearly 35% year to date, investors might wonder whether Murdoch is overpaid at that price. Surely they could have gone and last 65 cents on the dollar on their own. And they’re right to wonder about that and, if you think Rupert Murdoch is overpaid, you’ll get no argument from me.

But let’s face it: we live in an era of unprecedentedly high executive compensation and, while there are some champions of good corporate governance out there, overpay is the norm. So look at it this way: Murdoch controls about 60% of the company’s stock, making it by far the largest chunk of his net worth and with that net worth recently quoted at $8.3 billion by Forbes, his salary is basically immaterial. But, given what a large chunk of the stock Murdoch owns, he can pretty much pay himself whatever he wants: by that standard, it’s impressive that he’s taken a pay cut.

No one can question the influence that Murdoch has over the company — consider all the hoopla over the company’s acquisition of Dow Jones. Nor can Murdoch’s long-term track record of creating shareholder value be challenged.

Is Murdoch overpaid? You bet. But with all the really overpaid, poorly-performing executives who have no real stake in the long-term future of their companies out there, he’s not one I would bother complaining about.

Zac Bissonnette