Rupert Murdoch said yesterday that he would never retire, as he was forced to withdraw a controversial share options package for executives at News Corporation after a shareholder revolt.
The chairman of News Corp also told the company's annual general meeting in Australia that the "best candidate" would be appointed as the next chief executive of BSkyB, the UK pay-television company. Mr Murdoch also chairs BSkyB, where News Corp has a 35 per cent stake. There is a strong expectation that James Murdoch, the 30-year-old son of the chairman, will get the job, following the imminent departure of Tony Ball. This has led to deep concerns over future corporate governance at the company.
"It has nothing to do with anyone's shareholding," Mr Murdoch said. "I am confident the best candidate will be appointed [at Sky]."
However, News Corp's president, Peter Chernin, appeared to give the game away at the weekend when he said that James Murdoch was the "best person" for the position. James runs News Corp's Star TV operation in Asia, which he has steered into profit.
A number of external candidates have reportedly been approached by headhunters for the BSkyB job, including Roger Parry, chief executive of Clear Channel International, and Vodafone's chief operating officer, Julian Horn-Smith. Both indicated yesterday that they would not be interested.
Rupert Murdoch, 72, heaped praise on his two sons but said he had no intention of stepping down as head of News Corp, the global media empire he created from a single newspaper in Adelaide.
"I will be carried out," Mr Murdoch said, adding that the recent birth of his second daughter, to his third wife, Wendi Deng, had given him new vigour and delayed "forever" any retirement plans. Mr Murdoch has four adult children.
Mr Murdoch was flanked at the AGM by Lachlan, his older son, and although slightly hard of hearing at times, he appeared to be in good health and humour during the two-hour meeting. Lachlan is seen as his most likely successor.
Mr Murdoch said of his sons: "So far they are showing great promise. Lachlan, here on my left, is supervising companies which provided 60 per cent of last year's huge operating profit. James has just turned around the single most difficult situation we had in the whole company. They are starting well, let's see."
At the AGM, in Adelaide, Mr Murdoch suffered a rare defeat at the hands of shareholders, when he was forced to scrap a generous options plan for key executives, including his two sons. The plan would have delivered options for more than three million non-voting preferred shares at A$9.89 each to senior executives. The preferred shares closed on Wednesday at A$10.31.
The News Corp director and consultant Chase Carey was due to get 500,000 options, president Peter Chernin 1 million, chief financial officer David DeVoe 500,000, and executive directors James Murdoch 275,000, Lachlan Murdoch 375,000 and Arthur Siskind 500,000.
Mr Murdoch admitted the proposal faced certain defeat if it came to a vote, as it would not have been right for him to cast the votes of his family's Cruden investment arm because he could ultimately benefit himself from the proposal. Cruden holds about 30 per cent of News Corp stock.
"The issue arises because I'm currently, theoretically, eligible to participate in the option plan, although I do not participate in annual grants of options. In these circumstances, I believe that Cruden's vote should not be counted. Without Cruden's support, (the proposal) would not pass so I now withdraw the resolution," Mr Murdoch said.