Sky suffers shareholder revolt over directors’ pay and James Murdoch re-election

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Takeover target Sky has suffered a twin-pronged shareholder revolt over pay and the re-election of chairman James Murdoch at the company’s annual meeting.

Nearly half of independent shareholders voted to oppose Mr Murdoch’s reappointment amid concerns over his role as chief executive of 21st Century Fox, which is attempting to seize control of the 61% of Sky it does not already own in an £11.7 billion deal.

Some investors have expressed doubt that his dual roles allow him to represent the interests of independent investors, 48.4% of which opposed his re-election.

James Murdoch
Nearly half of independent shareholders voted to oppose Mr Murdoch’s reappointment (PA)

However, this was an improvement on last year, when more than 50% opposed Mr Murdoch’s reappointment.

When including Fox’s 39% holding in Sky, 78% of shareholders backed his reappointment.

The broadcaster said in a statement: “The board notes the significant vote against resolution 3, the directors’ remuneration report, and resolution 12, the re-election of James Murdoch, and will continue to engage with shareholders to understand their views as part of its ongoing programme of engagement.”

On pay, Sky also suffered a bloody nose as 63.7% of independent investors voted against the company’s remuneration report.

It follows a bumper payout for chief executive Jeremy Darroch, who saw his total annual pay packet more than treble to £16.3 million last year, despite annual profits being hit by the cost of broadcasting live Premier League football.

But the remuneration report was ultimately passed with 71% of the vote when including Fox’s holding.

Karen Bradley
Karen Bradley referred the bid to the Competition and Markets Authority last month (PA)

The takeover tilt by Fox, which is controlled by Rupert Murdoch, has been in the spotlight this week as Ofcom boss Sharon White and Culture Secretary Karen Bradley appeared before MPs on the Digital, Culture, Media and Sport Committee.

Ms Bradley referred the bid to the Competition and Markets Authority last month for a full-blown investigation, with the competition watchdog set to report back with its final recommendations next March.

She said on Wednesday that the final decision on the deal would be based on evidence and not “personal emotion or feelings”.

Ms White gave evidence to the committee on Tuesday when she told MPs the regulator found “extremely disturbing” behaviour at Fox News when looking at the bid.

Game of Thrones
Sky said Game Of Thrones was its “most-watched series ever” (PA)

The AGM followed a robust trading update from Sky, which said the popularity of Game Of Thrones helped Sky post surging revenues and customer numbers.

Sky said it added 160,000 new customers in its first quarter, which marks a 51% rise on a year earlier.

The group said Game Of Thrones was its “most-watched series ever”, while it also hailed home-grown series Riviera after it notched up 20 million downloads.

Mr Darroch said the group’s investment in production was “delivering”, with customer viewing to Sky pay channels up 10% year-on-year.

The group shrugged off pressure on consumer and advertising spending to post a 5% rise in revenues to £3.3 billion for the first quarter, while underlying earnings jumped 11% to £582 million.