News Corp. certainly made it worthwhile for Chase Carey to return to the company.
Documents filed with the Securities and Exchange Commission reveal that Carey, who as of Tuesday rejoined Rupert Murdoch's News Corp. as deputy chairman, president and chief operating officer, received a signing bonus of $10 million and will earn a base salary of $8.1 million.
Carey's five-year contract also includes bonuses that could earn him as much as an additional $25 million annually. The bonuses will be performance-based and determined by News Corp.'s year-over-year increase in adjusted earnings per share.
His new job is significantly more lucrative than the one he just left -- Carey since 2003 was president and chief executive of El Segundo-based satellite broadcaster DirecTV Corp. In that position, Carey's base salary was $2.3 million, and he earned a bonus last year of $3.5 million.
Carey's executive compensation package is similar to that of his predecessor. Peter Chernin, who finished his long run in the No. 2 position at New York-based News Corp. last week, also had a base salary of $8.1 million, and in 2008, according to SEC filings, his bonus was $20.7 million.
When Chernin announced in February that he was leaving News Corp. after 12 years as Murdoch's second in command, the company said it would not replace him and that senior executives would instead report directly to Murdoch.
But it quickly became clear that the far-flung holdings of News Corp. would have stretched Murdoch pretty thin. Five months later, Murdoch reached out to Carey, a former News Corp. executive who ran the television side of the media conglomerate and with whom Murdoch had a good working rapport. Carey, a consummate insider, also has strong relationships throughout the media industry and is well known in Washington regulatory circles, two key areas of importance for News Corp.
But like Chernin, Carey ultimately may not get the top job at News Corp., where Murdoch is keen to see one of his children become the heir apparent. The leading contender is believed to be his son James, who is overseeing much of News Corp.'s European and Asian businesses. Murdoch's daughter Elisabeth is another potential heir. She runs her own TV production company and recently was rumored to be a candidate for the top job at British broadcaster ITV.
Carey's contract calls for him to be paid handsomely should his return to News Corp. not work out. If Carey resigns "without good reason," he will receive at least two years' salary and a portion of his bonus. Should he be terminated within the next 12 months, he'll walk away with $10 million.
Carey's contract differs from Chernin's in one key aspect, however. Chernin's contract guaranteed him a six-year movie and television production deal under which News Corp.'s 20th Century Fox unit was obligated to greenlight at least two movies a year at Chernin's discretion. Chernin also has pension and retirement plans worth $11 million and a deferred compensation account that had a balance of nearly $30 million as of June 2008.
Carey and Chernin may find themselves competing for the corporate jet. Even though Chernin is no longer an executive at News Corp., he still has use of the company jet, which Carey is now entitled to for both business and personal use. Carey also gets a car allowance while Chernin can continue to use a company car.