Bernstein Research Criticizes Media CEO Pay

Analyst Michael Nathanson puts spotlight on CBS, News Corp. compensation

Senior executive pay in the media business is out of line with company performance, according Bernstein Research's senior media analyst Michael Nathanson, who issued a critical report Tuesday morning singling out News Corp. and CBS for special attention.

"News Corp.'s recent hiring of Chase Carey as President/Chief Operating Officer was re-affirmation of the fact that media executives, to borrow F. Scott Fitzgerald's famous quip, are ‘different from you and me,'" wrote Nathanson.

Carey, the former DirecTV CEO who began working for News Corp. in July, is receiving an $8.1 million a year salary, a $10 million signing bonus and up to $25 million a year performance bonus, according to filings.

The Bernstein report notes that the top earner among media executives in 2008 was CBS Corp. CEO Leslie Moonves, who was paid total compensation of $31.9 million last year. He is followed by Disney CEO Robert Iger, who earned $30.6 million; News Corp.'s Rupert Murdoch, who took home $27.5 million; and Viacom's Philippe Dauman was paid $23 million. Time Warner CEO Jeff Bewkes took home the least of the top five, at $19.9 million.

The five top media CEOs earned on average $26.6 million last year. "Given the relatively poor one-, three- or five-year performances of most of these stocks, the rich compensation packages look even more extraordinary," wrote Nathanson.

He noted, however, that between 2007 and 2008, both Moonves and Murdoch saw total compensation fall by 13% and 14%, respectively.

Nathanson's second annual CEO/CFO compensation review praised Disney for its smaller salary structure and for paying bonuses tied to shareholder returns. In the 21-page report, Nathanson posed the question, "While the equity shareholders felt the pain of value destruction, did the media conglomerate executives?"

CBS had no comment on the report. News Corp. representatives have not yet responded to a request for comment.