Dow Jones promises top staff $50m in golden parachutes

Dow Jones promises top staff $50m in golden parachutes
By Stephen Foley in New York
Published: 09 June 2007
Independent UK

Dow Jones, the company that owns The Wall Street Journal, has braced itself for a takeover by Rupert Murdoch, by promising $50m (£25.4m) of "golden parachutes" for senior staff who may be forced out if the media mogul wins control.

The company has extended so-called "change of control" clauses currently enjoyed by 25 top executives to cover an additional 135 staff. At the same time, it sweetened the severance packages of nine senior executives including Richard Zannino, the chief executive.

Mr Zannino's contract already suggests a pay-off of $19.5m, and a new promise to pay his tax liabilities raises the value of the golden parachute to between $23.4m and $25.4m.

The board agreed this week that their managers needed the promise of extra cash should they be fired, in order to keep them focused on running the business during an uncertain period.

Mr Murdoch's $5bn bid for Dow Jones became public in May, and his public courting of the controlling Bancroft family has softened their originally hostile stance. A meeting between the two sides at the start of this week was described by both as "constructive".

Many staff, though, have been alarmed at the prospect of a takeover after more than a century of passive ownership by the Bancrofts, and a journalists' union has been soliciting rival bidders to block Mr Murdoch's ambition.

"The amendments are intended to enhance the company's ability to retain and attract management-level employees by assuring current and potential employees that their positions and compensation would not be adversely affected without adequate consideration as a result of a change in control," Dow Jones explained in a regulatory filing. "In addition, the changes are intended to benefit the company by allowing such employees to focus on the company's business objectives in the event of a potential change in control, notwithstanding the personal uncertainties and concerns that ordinarily arise in connection with such an event."

A spokeswoman added that the changes were not related specifically to Mr Murdoch's bid, but rather to bring Dow Jones into line with other employers after generations when it has not considered a change of control at all likely. The changes run through many individual contracts and pooled bonus plans.