Saying goodbye the NewsCorp way…

As the phone-hacking scandal swirling around News Corporation (NWSA) grows ever more dramatic, we’ve been keeping an eye out for relevant filings. There haven’t been many — late last week came an 8-K with a handful of press releases about resignations already widely remarked on in the press, and yesterday’s 8-K included a terse statement from the board’s independent directors, saying the board

“was shocked and outraged by the allegations … and we are united in support of the senior management team to address these issues. In no uncertain terms, the Board and management team are singularly aligned and committed to doing the right thing.”

While the pie-ing of Murdoch — and his wife’s vigorous response — got most of the attention yesterday, we were more interested in reports bubbling up about potential severance payments to departing News Corporation executives at the center of the company’s phone-hacking storm — including this one from the Daily Mail — and the news that the company will stop paying legal fees for a private investigator jailed in the scandal. So we decided to take a look at the filings, and the severance promises that News Corp. makes to its executives.

None of those who’ve left so far have been senior enough within News Corp. proper to appear in proxy disclosures or other filings — even former News International head Rebekah Brooks and former Dow Jones publisher Les Hinton (who also oversaw News International early in the decade, when the hacking was occurring).

The three non-Murdochs listed in the proxy’s severance table haven’t been tied to the scandal inquiry that we’ve noticed. And, of course, in the midst of scandal, companies often depart from the policies they lay out so carefully in their proxies, doling out ad-hoc severance as circumstances warrant — a move that almost always increases the payout, rather than reducing it (which could invite litigation).

Still, what’s in the proxy NewsCorp filed in August 2010 offers a glimpse at how the company thinks about severance for its top officials, and it’s illuminating.

For one thing, getting fired without cause can be plenty rewarding at News Corp.: Chief Operating Officer Chase Carey could get as much as $32.2 million (including $1 million of health benefits), plus $15.4 million in accumulated pension benefits; Chief Financial Officer David F. DeVoe could get $8.2 million (plus his $14.75 million pension); and Fox Television guru Roger Ailes could get $31.6 million, on top of his $8.8 million pension. Unusually for such a prominent company, all these executives get to keep health benefits no matter how they lose their jobs — even if they’re fired for cause. Carey even gets his payouts grossed up for any golden-parachute excise taxes under various circumstances.

The Murdochs, by contrast, don’t have employment agreements: Officially, as of the last proxy, Rupert Murdoch would get a mere $1.6 million in health benefits (!) if the company terminated him without cause or if he quit without good reason. James Murdoch would get nothing unless he died (in which case equity acceleration would bring his estate $4.6 million as of the last proxy). But that ignores the pension benefits each man is entitled to: $62.4 million for the older Murdoch and nearly $4.1 million for James Murdoch.

Of course, given that Rupert Murdoch controlled something like 40% of the company’s Class B shares, the only ones entitled to a vote at the annual meeting, he’ll presumably have a lot to say about his own departure or that of his son, should either come to pass. So even if one of both of them winds up leaving the company over the scandal — and it’s far from clear that such a thing will happen — it’s a pretty good bet that they would get ad-hoc severance arrangements on their way out.

Image source: Reuters slideshow of Murdoch before parliamentary committee.