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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.  )
 
 
Filed by the Registrant 
       Filed by a Party other than the Registrant 
Check the appropriate box:
 
  Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material under
Section 240.14a-12
Fox Corporation
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
  No fee required
  Fee paid previously with preliminary materials
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11
 


 

LOGO

 

LOGO

 

 

November 17, 2023 at 10:00 a.m. (Pacific Time)

Zanuck Theatre at the FOX Studio Lot

10201 West Pico Boulevard, Los Angeles, California 90035


LOGO   

Fox Corporation

1211 Avenue of the Americas

New York, New York, 10036

(212) 852-7000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on November 17, 2023

Dear Stockholder:

The Annual Meeting of Stockholders (the “Annual Meeting”) of Fox Corporation (the “Company”) will be held on November 17, 2023 at 10:00 a.m. (Pacific Time) at the Zanuck Theatre at the FOX Studio Lot, 10201 West Pico Boulevard, Los Angeles, California 90035.

At the Annual Meeting, the Company’s stockholders will be asked to:

 

 

elect the seven Director nominees identified in this proxy statement to the Company’s Board of Directors;

 

 

ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2024;

 

 

approve, on an advisory basis, named executive officer compensation; and

 

 

consider any other business properly brought before the Annual Meeting and any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Company’s proxy statement. While all of the Company’s stockholders are invited to attend the Annual Meeting, only stockholders of record of the Company’s Class B Common Stock (“Class B Common Stock”) at the close of business on September 19, 2023 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. Holders of the Company’s Class A Common Stock are not entitled to notice and to vote on the matters to be presented at the Annual Meeting or any adjournment or postponement thereof.

 

Important Information for Holders of Class B Common Stock

It is important that your shares of Class B Common Stock be represented and voted at the Annual Meeting. If you are a holder of shares of Class B Common Stock, you may submit a proxy for those shares by telephone or the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials, or if you requested a paper proxy card, you may submit your proxy by mail if you prefer. If you attend the Annual Meeting, you may vote your shares in person. Please review the instructions on the proxy card or the information forwarded by your broker, bank or other nominee regarding the voting instructions. You may vote your shares of Class B Common Stock in person even if you previously submitted a proxy. Please note, however, that if your shares of Class B Common Stock are held of record by a broker, bank or other nominee and you wish to vote in person at the Annual Meeting, you must obtain a proxy issued in your name from such broker, bank or other nominee. Whether or not you plan to attend the Annual Meeting, we urge you to submit a proxy for your shares of Class B Common Stock by telephone or the Internet or, if you requested a paper proxy card, by completing and returning the proxy card as promptly as possible prior to the Annual Meeting to ensure that your shares will be represented at the Annual Meeting.

The Annual Meeting will be audiocast live on the Internet at investor.foxcorporation.com/annual-meeting. If you would like to attend the Annual Meeting in person, please refer to the information regarding admission requirements, transportation and other logistical information contained in the Company’s proxy statement in the section titled “Information About the Annual Meeting.”


If you would like to register to receive materials relating to next year’s annual meeting of stockholders electronically instead of by mail, please select the “Electronic Delivery” link in the “Resources” section of the Company’s website at investor.foxcorporation.com. We highly recommend that you consider electronic delivery of these documents as it reduces the amount of paper used and mailed to your home.

 

 

LOGO

Laura A. Cleveland

Senior Vice President and

Corporate Secretary

New York, New York

September 22, 2023


YOUR VOTE IS IMPORTANT

REGARDLESS OF HOW MANY SHARES OF CLASS B COMMON STOCK YOU OWN AS OF THE RECORD DATE, PLEASE SUBMIT A PROXY FOR YOUR SHARES BY TELEPHONE OR INTERNET OR, IF YOU HAVE REQUESTED A PAPER PROXY CARD, BY COMPLETING, SIGNING AND DATING THE PROXY CARD AND RETURNING IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, THE COMPANY ASKS YOUR COOPERATION IN PROMPTLY SUBMITTING YOUR PROXY BY TELEPHONE, INTERNET OR PROXY CARD.


TABLE OF CONTENTS

 

EXECUTIVE SUMMARY

 

     1  

PROPOSAL NO. 1: ELECTION OF DIRECTORS

 

     7  

Corporate Governance

     10  

Corporate Culture and Social Responsibility

     20  

PROPOSAL NO. 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

     25  

Report of the Audit Committee

     26  

Certain Relationships and Related-Party Transactions

     28  

PROPOSAL NO. 3: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

 

     29  

COMPENSATION DISCUSSION AND ANALYSIS

 

     30  

Named Executive Officers

     30  

Compensation Design Principles

     30  

Fiscal 2023 Business and Management Review

     32  

Use of Information on Peer Companies and Industry Trends

     33  

Elements of Compensation

     34  

Framework for Fiscal 2024 Long-Term Equity-Based Incentive Awards

     42  

Employment Arrangements, Severance and Change in Control Arrangements

     42  

Engagement with Stockholders and Compensation Committee’s Annual Review of its Compensation Practices

     42  

Recoupment of Previously Paid Named Executive Officer Performance-Based Compensation

     43  

Prohibition on Hedging and Pledging of FOX Stock

     43  

Executive Stock Ownership Guidelines

     43  

Role of Compensation Consultant

     44  

Compensation Deductibility Policy

     44  

COMPENSATION COMMITTEE REPORT

 

     45  

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

     45  

RISKS RELATED TO COMPENSATION POLICIES AND PRACTICES

 

     45  

EXECUTIVE COMPENSATION

 

     46  

Summary Compensation Table for the Fiscal Year Ended June 30, 2023

     46  

Grants of Plan-Based Awards During the Fiscal Year Ended June 30, 2023

     47  

Employment Arrangements

     48  

Outstanding Equity Awards at June 30, 2023

     50  

Stock Vested During the Fiscal Year Ended June 30, 2023

     52  

Pension Benefits as of June 30, 2023

     52  

Potential Payments Upon Termination

     53  

CEO Pay Ratio

     56  

Pay Versus Performance

     57  

Compensation-Related Events Occurring Following Fiscal Year End

     59  

NON-EXECUTIVE DIRECTOR COMPENSATION

 

     60  

Board and Committee Retainers for the Fiscal Year Ended June 30, 2023

     60  

Director Compensation for the Fiscal Year Ended June 30, 2023

     60  

Non-Executive Director Stock Ownership Guidelines

     61  

EQUITY COMPENSATION PLAN INFORMATION

 

     62  

EXECUTIVE OFFICERS OF FOX CORPORATION

 

     63  

SECURITY OWNERSHIP OF FOX CORPORATION

 

     64  

INFORMATION ABOUT THE ANNUAL MEETING

 

     66  

ANNUAL REPORT ON FORM 10-K

 

     70  

2024 ANNUAL MEETING OF STOCKHOLDERS

 

     70  

OTHER MATTERS

 

     70  

APPENDIX A

 

     A-1  

 

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 2023 Proxy Statement

 

 

 

 

 

 

 

 

 

 i

 

 

 

 


This proxy statement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical or current fact are “forward-looking statements” for purposes of federal and state securities laws. Forward-looking statements may include, among others, the words “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” or any other similar words. Although the Company’s management believes that the expectations reflected in any of the Company’s forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties. Important factors that could cause the Company’s actual results, performance and achievements to differ materially from those estimates or projections contained in the Company’s forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions. For more detailed information about these factors, see Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Caution Concerning Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Forward-looking statements in this proxy statement speak only as of the date hereof. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement made herein or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in our expectations, except as required by law.

We are providing our website address in this proxy statement solely for the information of investors. We do not intend the address to be an active link or to otherwise incorporate the contents of the website, including any reports that are noted in this proxy statement as being posted on the website, into this proxy statement or into any of our other filings with the Securities and Exchange Commission.

 

 

ii    

 

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    2023 Proxy Statement

 


EXECUTIVE SUMMARY

This proxy statement is first being made available to stockholders on or about September 22, 2023 in connection with the solicitation by the Board of Directors (the “Board”) of Fox Corporation of proxies for use at the Company’s 2023 Annual Meeting of Stockholders (the “Annual Meeting”). Except as otherwise indicated or where the context otherwise requires, in this proxy statement, “FOX,” the “Company,” “we,” “us” and “our” refer to Fox Corporation; “you,” “your,” “yours” and other words of similar import refer to holders of Class B Common Stock; and “fiscal” refers to the applicable fiscal year ended June 30.

We provide below highlights of certain information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider before you decide how to vote. You should read the entire proxy statement carefully before voting.

2023 Annual Meeting of Stockholders

 

 

   

Date and Time:

 

November 17, 2023 at 10:00 a.m. (Pacific Time)

   

Place:

 

Zanuck Theatre at the FOX Studio Lot, 10201 West Pico Boulevard, Los Angeles, California 90035

   

Record Date:

 

September 19, 2023

   

 

Voting:

 

 

Holders of Class B Common Stock, par value $0.01 per share (“Class B Common Stock”), are entitled to one vote per share on all matters to be presented at the Annual Meeting.

 

Holders of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”) are not entitled to vote on the matters to be presented at the Annual Meeting. The Class A Common Stock and Class B Common Stock are referred to collectively in this proxy statement as the “Common Stock.”

Meeting Agenda Items

 

 

Proposal   

Page    

Number    

      Voting Standard      

    Board Vote Recommendation    

 

Management Proposals

       

Proposal No. 1: Election of Directors

   7         Majority of votes cast       FOR each Director nominee
       

Proposal No. 2: Ratification of Selection of Independent Registered Public Accounting Firm for Fiscal Year Ending June 30, 2024

   25         Majority of votes cast       FOR
       

Proposal No. 3: Advisory Vote to Approve Named Executive Officer Compensation

   29         Majority of votes cast       FOR

 

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    2023 Proxy Statement

 

 

 

   

 

    1

 

 

 


Board Nominees

 

 

Director Nominee

 

 

 

 Director  
Since 

 

 

Independent

 

 

 

  Committee Memberships 

 

 

 

A

 

 

 

C

 

 

 

NCG

 

 

Lachlan K. Murdoch

 

 

 

2019 

 

               

 

Tony Abbott AC*

 

 

 

 

             

 

William A. Burck

  2021             

 

 

Chase Carey

 

 

2019 

 

 

     

 

 

   

 

Roland A. Hernandez

 

 

 

2019 

 

 

 

 

 

 

Chair

 

     

 

Margaret “Peggy” L. Johnson*

 

 

 

 

 

 

 

 

 

 

       

 

Paul D. Ryan

 

 

 

2019 

 

 

 

 

     

 

 

 

 

Chair

 

A = Audit Committee

C = Compensation Committee

NCG = Nominating and Corporate Governance Committee

* = Committee membership to be determined after the Annual Meeting

Board Diversity, Skills, Independence and Age

 

Our seven talented Director nominees have diverse skill sets and professional backgrounds, as reflected in their biographies beginning on page 7. For more information about our Director nominees, including information regarding diversity as required by Nasdaq listing rules and skills, please see the sections titled “Proposal No. 1: Election of Directors” and “Corporate Governance – Director Nomination Process,” as well as “Compensation Discussion and Analysis – Named Executive Officers.”

 

Diversity   Independence   Age
LOGO   LOGO   LOGO

Fiscal 2023 Business Highlights

 

FOX once again delivered strong operational and financial results in fiscal 2023. The Company focuses on producing and distributing quality news, sports and entertainment content that engages and informs audiences, deepens consumer relationships and creates more compelling product offerings through its iconic brands, including FOX News Media, FOX Sports, FOX Entertainment, FOX Television Stations and Tubi Media Group. FOX also continued to focus on its growth in fiscal 2023, investing in organic initiatives, while delivering meaningful returns of capital to stockholders.

During the fiscal year, FOX continued to reach and, in some cases, exceed its strategic goals, all pursuant to its fundamental priorities of delivering quality live and on-demand programming to large and engaged audiences, securing value for its market-leading brands and content and positioning itself for long-term growth. Fiscal 2023 highlights include:

 

 

FOX News continued as the top-rated national cable news channel in both Monday to Friday primetime and total day viewing, a ranking it has held for over 20 consecutive years. For the fiscal year, FOX News delivered primetime total viewership that beat the combined viewership of its closest cable news channel competitors and delivered ratings throughout the year that were comparable to ratings delivered by the four broadcast networks. FOX Business finished as the most-watched business network among total business day viewers each quarter during fiscal 2023. Additionally, FOX News Media continued to enhance its digital footprint as the FOX Nation subscription video-on-demand (“SVOD”) service continued to grow its subscriber base and the FOX Weather free advertising-supported streaming television (“FAST”) service expanded its distribution while significantly increasing audience engagement.

 

 

FOX Sports was the industry leader in live events for the fourth consecutive calendar year with 265 billion minutes of live sports viewing on the FOX Network and followed that achievement with the broadcast of Super Bowl LVII, which set an

 

 

2 

 

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 2023 Proxy Statement

 


 

all-time record as the most-watched program in U.S. television history. During the fiscal year, the NFL regular season on FOX averaged over 19 million viewers and finished as the #1 NFL package on television highlighted by the Thanksgiving Day matchup between the Dallas Cowboys and New York Giants, which was the most watched regular season NFL game in history. FOX’s America’s Game of the Week remained television’s #1 show for the 14th year in a row and FOX’s Big Noon Saturday continued as the #1 game window in all of college football. FOX Sports solidified its leadership in college football, entering into a landmark rights extension with the Big Ten Conference. The 2022 Fédération Internationale de Football Association (“FIFA”) Men’s World Cup averaged 3.6 million viewers across the FOX Network and FS1, up 30% from the 2018 matches, with the final ranking as the most watched men’s soccer game in U.S. history. In addition, the United States Football League (the “USFL”) returned for its second season and expanded into additional markets.

 

 

FOX Entertainment delivered over 150 million unduplicated monthly viewers across all platforms during the 2022-2023 broadcast season. FOX featured the #1 entertainment telecast with Next Level Chef following Super Bowl LVII, the #1 broadcast drama 9-1-1, #1 new unscripted series Special Forces: Worlds Toughest Test, #1 new scripted drama in 2023 Accused, and three of the top 10 comedies on broadcast television with The Simpsons, Family Guy and Bobs Burgers during the 2022-2023 broadcast season. FOX Entertainment is investing in more co-production arrangements and owns a stake in each new series that premiered on the FOX Network during the 2022-2023 broadcast season. During the year, FOX Entertainment and Hulu renewed a multi-year content partnership, encompassing in-season streaming rights for FOX Entertainment’s expansive programming slate and an extensive multi-platform strategic marketing alliance. Additionally, FOX Entertainment launched FOX Entertainment Global which oversees international and multi-platform sales of content from FOX and its portfolio of in-house production studios, as well as programming acquired from third-party producers.

 

 

FOX Television Stations achieved record political revenues from a competitive U.S. midterm election cycle during the fiscal year. FOX Television Stations remains a leader in local news coverage, producing approximately 1,200 hours of local news coverage each week across 18 markets, including 14 of the top 15 Nielsen-designated market areas (“DMAs”). During the year, FOX Television Stations grew and enhanced its digital offerings through the expansion and success of the FOX Local Extension (FLX) digital advertising platform as well as the rollout of local news content on connected televisions and FAST services in a number of markets. These initiatives led to digital advertising revenue growth of over 50% as compared to the prior fiscal year.

 

 

In fiscal 2023, Tubi delivered record revenues, which grew 33% compared to the prior year. Total view time (the total number of hours watched) reached approximately 6.8 billion hours over the course of fiscal 2023, an increase of over 50% over the prior year. According to Nielsen’s The Gauge, Tubi was the most-watched FAST service in the U.S., reaching approximately 1.4% of total TV viewing minutes in June 2023. Tubi also expanded its content library to over 60,000 titles, including the premiere of over 100 new original titles throughout the fiscal year. Tubi also grew its linear streaming offerings to supplement its on-demand library, with the launch of over 100 sports, entertainment and local news channels to bring its total offering to nearly 250 channels as of the end of fiscal 2023.

 

 

The Company generated affiliate fee revenue growth of 3% due to higher average rates per subscriber for its owned and operated stations and higher reverse retransmission fees collected from third-party stations, led by contractual annual price increases on existing distribution agreements and from affiliate agreement renewals. Additionally, the Company’s key networks continue to be distributed on all major virtual multi-channel video programming distributor (“MVPD”) services, reflecting the “must have” nature of the Company’s content.

 

 

The Company generated robust advertising revenue growth of 12%, as its portfolio of leadership live news and sports brands continued to deliver engaged, real-time audiences at scale. During the fiscal year, the Company saw record revenues from the U.S. midterm election cycle and benefitted from the broadcast of Super Bowl LVII and the FIFA Men’s World Cup. Tubi also set new engagement records in fiscal 2023.

 

 

The Company ended the year with approximately $4.3 billion of cash and cash equivalents on its balance sheet while returning approximately $2.3 billion of capital to its stockholders in fiscal 2023 through the Company’s cash dividend and its stock repurchase program. During the fiscal year, the Company authorized incremental stock repurchases of $3 billion, including a $1 billion accelerated share repurchase transaction. As of August 8, 2023, the Company has repurchased over $4.6 billion (approximately 130 million shares) under the stock repurchase program since the program’s launch in November 2019.

 

 

FOX continues to broaden and deepen its corporate social responsibility efforts, with a focus on local community engagement. Our recent environmental, social and governance achievements are highlighted in FOX’s fourth annual Corporate Social Responsibility Report, published in August 2023.

 

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 2023 Proxy Statement

 

 

 

   

 

 3

 

 

 


Corporate Governance

 

The Board has adopted a Statement of Corporate Governance that, in conjunction with the Company’s Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws (the “By-laws”), other corporate governance documents and all applicable laws, provides a framework within which the Board may conduct its business and provides the appropriate oversight of management. Highlights of the Board’s approach to corporate governance include:

 

 

Director Accountability. Each Board member is elected annually with a majority vote standard in uncontested elections, which includes a Director resignation policy as set forth in the Statement of Corporate Governance.

 

 

Independent Board Oversight. As outlined in the Statement of Corporate Governance, the independent Directors of the Board annually elect a Lead Independent Director who has substantive responsibilities and significant authority including over meeting schedules, agendas and information sent to the Board. The Board holds regular executive sessions of the independent Directors without management present and the Lead Independent Director presides over such sessions. At present, Jacques Nasser AC serves as the Lead Independent Director, which he will do through the Annual Meeting. The independent Directors will elect a new Lead Independent Director following the Annual Meeting.

 

 

Independent Board Committees. Only independent Directors serve on the Board’s key committees.

 

 

Dual-Class Capital Structure. The Nominating and Corporate Governance Committee recently conducted a thorough review of the benefits and considerations of multi-class capital structures, including their effects on economic performance, investment in innovation, and the protections that such structures allow to pursue independent journalism in media companies, and concluded that our dual-class capital structure continues to be appropriate and in the best long-term interests of our stockholders.

 

 

Board Oversight of Risk. The Board oversees the identification, monitoring and management of the Company’s risks and, with or through its committees as appropriate, regularly receives periodic updates from, and discusses with, senior management risks the Company faces, including operational, strategic, legal and regulatory, financial, reputational and sustainability and corporate social responsibility risks, and the plans to address them. The independent Board members also discuss the Company’s significant risks when they meet in executive session without management. In addition, each of the Board’s committees assists the Board in overseeing the management of the Company’s risks within the areas delegated to that committee by providing guidance and reports to the full Board with respect to these risks as appropriate.

 

 

Stock Ownership Requirements. The Compensation Committee maintains stock ownership guidelines for our named executive officers and non-executive Directors to ensure the close alignment of their interests with those of other long-term stockholders.

 

 

Prohibition on Hedging and Pledging. To further align interests and protect against unnecessary risk-taking, the Board has adopted a policy that prohibits all Directors and employees, including our named executive officers, from engaging in short sales of the Company’s securities and investing in Company-based derivative securities. In addition, the policy prohibits all Directors and employees, including our named executive officers, from pledging any Company securities that they hold directly, hedging any Company securities that they hold directly or indirectly, or hedging or pledging equity compensation.

Board Responsiveness

 

2023 Stockholder Proposal Response. In May 2023, the Company received a stockholder proposal from Arjuna Capital requesting that the Board issue a report on the merits of establishing a risk oversight committee of the Board. After discussing the proposal, the Board agreed to and has commissioned an independent evaluation of the merits of establishing a risk oversight committee and general Board governance. The Company has retained the law firm of Cleary Gottlieb Steen & Hamilton LLP (“Cleary”) to analyze and report on the Board’s existing risk oversight governance and practice, the allocation of responsibilities among the Board’s committees and the potential merits of establishing a standalone risk oversight committee. As part of this evaluation, Cleary will consult with Arjuna Capital and other risk oversight experts. This thorough third-party evaluation is ongoing and will likely not be completed before the Annual Meeting. Following Cleary’s delivery of the findings of its assessment and deliberations of the Board, the Board will disclose the key results of the report, including the rationale as to why or why not the Company will establish a risk oversight committee, no later than in the Company’s proxy statement for the 2024 annual meeting of stockholders.

 

 

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Enhancements to Political Activities Report. In fiscal 2022, the Company published its inaugural Political Activities Report in response to stockholder feedback received. In fiscal 2023, in line with additional feedback received, the Company further enhanced the transparency of the report, which now also includes the membership dues the Company pays to trade associations in addition to the names of the associations. The Company’s 2022 Political Activities Report is available on the Company’s website at foxcorporation.com.

Executive Compensation

 

The Company has established a compensation program that seeks to closely align the interests of its named executive officers with the interests of its stockholders.

 

 

The Company’s executive compensation program is designed to attract, retain and motivate top executive talent, drive performance without encouraging unnecessary or excessive risk-taking and support both short-term and long-term growth for stockholders.

 

 

The Company’s annual bonus program and long-term equity-based program under the Fox Corporation 2019 Shareholder Alignment Plan (the “2019 SAP”) for its named executive officers rely on a number of diversified performance metrics. Collectively, the annual bonus program and equity-based awards granted under the 2019 SAP result in a significant portion of each named executive officer’s total compensation opportunity being dependent upon achievement of target financial performance, stock price appreciation, relative total shareholder returns and individual and group contributions.

 

 

The Company has strong governance policies related to executive compensation. The Compensation Committee is comprised entirely of independent Directors. In addition, the Company’s named executive officer compensation programs include risk mitigation features, such as Compensation Committee discretion and oversight, a balance of annual and long-term incentives, the use of multiple performance metrics, award opportunities that are fixed or capped and recoupment provisions for performance-based compensation. The Compensation Committee annually oversees an assessment of risks related to compensation policies and practices.

 

 

As described above, the Compensation Committee maintains stock ownership guidelines that apply to the Company’s named executive officers, and the Company prohibits hedging and pledging of the Company’s securities by all Directors and employees, including the named executive officers.

 

 

The Board has also adopted a clawback policy, under which the Compensation Committee has sole discretion to require reimbursement of all or any portion of any performance-based compensation, or discretionary bonus paid to any executive for the period when the executive engaged in harassment, discrimination and/or retaliation, including the failure to respond to allegations or complaints of such behaviors.

The “Compensation Discussion and Analysis” begins on page 30 and the “Executive Compensation” section, which includes the fiscal year ended June 30, 2023 Summary Compensation Table and other related tables and disclosure, begins on page 46.

Corporate Social Responsibility

 

In August 2023, FOX published its fourth annual Corporate Social Responsibility Report, which is available at foxcorporation.com.

From the Company’s inception in March 2019, FOX has been dedicated to using its scale, platforms and reach to positively impact its colleagues, neighbors and communities. Our Corporate Social Responsibility Report provides a summary of our approach to corporate giving and our environmental, social and governance activities during fiscal 2023. Organized around five key areas, highlights include:

 

 

Community Forward: philanthropic support through employee and corporate donations, leveraging the FOX Studio Lot as a resource for the local community, and public service announcements (or PSAs) and television coverage that spotlight key causes;

 

 

People Forward: providing training, opportunities and benefits to develop our employees professionally and personally, which garnered external recognition from workplace diversity organizations applauding FOX for being a top employer;

 

 

Sustainably Forward: operating efficiently and reducing environmental impacts associated with our operations;

 

 

Policy Forward: the ethical principles, policies and standards that guide our business practices, including guarding and defending our journalists in their search for the truth, and integrity in editorial guidelines, broadcast standards and advertising; and

 

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Data Forward: data privacy policies and data security programs designed to safeguard information against loss, theft, and unauthorized use, disclosure or modification.

Also, as discussed in our 2023 Corporate Social Responsibility Report, we have posted our Employment Information Report (EEO-1), showing the race, ethnicity and gender of our employees on our website at foxcorporation.com/eeo-1-data.

 

 

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PROPOSAL NO. 1: ELECTION OF DIRECTORS

The Board has nominated seven Director nominees for election at this Annual Meeting to hold office until the next annual meeting or until his or her successor is duly elected and qualified. If, for any reason, any of the Director nominees become unavailable for election, the proxy holders may exercise discretion to vote for a substitute nominee proposed by the Board. The information with respect to principal occupation or employment, other affiliations and business experience was furnished to the Company by the respective Director nominee. The ages shown are as of September 19, 2023. Each of the Director nominees has indicated that he or she will be able to serve if elected and has agreed to do so. All nominees except Mr. Abbott and Ms. Johnson are incumbent director nominees.

 

 

 

Lachlan K. Murdoch

Age: 52

Director Since: 2019

 

 

Lachlan K. Murdoch has been Executive Chair of the Board since January 2019 and Chief Executive Officer of the Company since October 2018. Mr. L.K. Murdoch served as Executive Chairman of Twenty-First Century Fox, Inc. (“21CF”), the Company’s former parent, from 2015 to March 2019, its Co-Chairman from 2014 to 2015 and a Director since 1996. He served as Executive Chairman of NOVA Entertainment, an Australian media company, from 2009 to 2022 and has served as the Executive Chairman of Illyria Pty Ltd, a private company, since 2005. Mr. L.K. Murdoch was a Director of Ten Network Holdings Limited, an Australian media company, from 2010 to 2014 and its Non-Executive Chairman from 2012 to 2014, after serving as its Acting Chief Executive Officer from 2011 to 2012. He has served as a Director of News Corporation (“News Corp”) since 2013 and as its Co-Chairman since 2014.

 

Mr. L.K. Murdoch brings to the Board a wealth of knowledge regarding the Company’s operations and the media industry, as well as management and strategic skills. With his extensive experience leading the Company and 21CF and his expertise in the media industry, Mr. L.K. Murdoch leads the Board in developing corporate strategies, directing the corporate agenda and overseeing the Company’s operations.

 

 

 

Tony Abbott AC

Age: 65

Director Since: N/A

 

 

Tony Abbott AC served as the 28th Prime Minister of Australia from 2013 to 2015. Mr. Abbott was Leader of the Liberal Party of Australia from 2009 to 2015 and a member of parliament from 1994 to 2019. Mr. Abbott has been an advisor to the UK Board of Trade since 2020. In addition, he has served on the Board of Trustees of the Global Warming Foundation since 2023, the Advisory Board of The Alliance for Responsible Citizenship since 2023, the Council for the Australian War Memorial since 2019 and the Board of the Ramsay Center for Western Civilisation since 2016.

 

Mr. Abbott brings to the Board decades of executive leadership, expertise in matters of trade, economic and public policy, and a strong international business development network.

 

 

 

William A. Burck

Age: 52

Director Since: 2021

 

 

William A. Burck has been a Director of the Company since June 2021 and serves as a member of the Nominating and Corporate Governance Committee. Mr. Burck is Global Co-Managing Partner of the law firm Quinn Emanuel Urquhart & Sullivan, LLP, where he has been a partner since 2012. Mr. Burck served as Deputy Staff Secretary, Special Counsel and Deputy White House Counsel to President George W. Bush from 2005 to 2009. Mr. Burck previously served in the Criminal Division of the U.S. Department of Justice, as an Assistant United States Attorney in the Southern District of New York, and as a law clerk for Supreme Court Justice Anthony M. Kennedy.

 

Mr. Burck is a leading trial lawyer and corporate counselor who brings to the Board his decades of experience advising companies, boards of directors, senior executives and government officials in complex litigation and business matters. His experience, including government service, strengthens the Board’s insight on regulatory issues and important constitutional questions.

 

 

 

 

   

 

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PROPOSAL NO. 1: ELECTION OF DIRECTORS

 

 

Chase Carey

Age: 69

Director Since: 2019

 

 

Chase Carey has been a Director of the Company since March 2019 and serves as a member of the Compensation Committee. He served as Chief Executive Officer of Formula 1 Group from 2017 to 2021 and as its Chairman from 2016 to 2022. Mr. Carey served 21CF in numerous roles, including as Vice Chairman of the 21CF Board from July 2016 to March 2019, Executive Vice Chairman from July 2015 through June 2016, President and Chief Operating Officer and Deputy Chairman from 2009 through June 2015, Co-Chief Operating Officer from 1996 to 2002, a consultant from 2016 to 2018 and a Director from 1996 to 2007. Mr. Carey served on the Supervisory Board of Sky Deutschland, a German media company, from 2010 to 2014 and as its Chairman from 2010 to 2013. Mr. Carey was a Director of Sky plc from 2003 to 2009 and from 2013 to 2018. He was a Director of Saban Capital Acquisition Corp. from 2016 to 2019 and Chief Executive Officer, President and Director of DIRECTV from 2003 to 2009.

 

Mr. Carey has a broad and deep understanding of the Company and its operations, having served in a variety of leadership positions of 21CF and its affiliates for over 30 years. Mr. Carey provides the Board with executive experience and expertise in the media and sports industries.

 

 

 

Roland A. Hernandez

Age: 65

Director Since: 2019

 

 

Roland A. Hernandez has been a Director of the Company since March 2019 and serves as Chair of the Audit Committee and as a member of the Nominating and Corporate Governance Committee. Since 2001, Mr. Hernandez has been the Founding Principal and Chief Executive Officer of Hernandez Media Ventures, a company engaged in the acquisition and management of media assets. Mr. Hernandez was Chief Executive Officer of Telemundo Group, Inc. from 1995 to 2000 and its Chairman from 1998 to 2000. Mr. Hernandez also serves on the Board of Directors of U.S. Bancorp and Take-Two Interactive Software, Inc. Mr. Hernandez previously served on the Boards of Directors of Belmond Ltd., MGM Resorts International, The Ryland Group, Inc., Sony Corporation, Vail Resorts, Inc. and Wal-Mart Stores Inc. He serves on the Advisory Board of Harvard Law School.

 

As a veteran media owner and executive, Mr. Hernandez offers strong leadership and operational expertise. His significant experience on public company boards of directors is a valuable resource to the Board, in particular relating to financial reporting, accounting and corporate governance matters.

 

 

 

Margaret “Peggy” L.

Johnson

Age: 61

Director Since: N/A

 

 

Margaret “Peggy” L. Johnson has been the Chief Executive Officer of Magic Leap, Inc., a U.S. augmented reality company, since August 2020. From 2014 to 2020, Ms. Johnson was Executive Vice President of Business Development at Microsoft Corporation, where she was responsible for strategic deals and partnerships across various industries. Before Microsoft, Ms. Johnson was Executive Vice President of Qualcomm Technologies, Inc. and President of Global Market Development at Qualcomm Incorporated. Ms. Johnson has served on the Board of Directors of BlackRock, Inc. since 2018 and served on the Board of Directors of Live Nation Entertainment, Inc. from 2013 to 2018. She was an Advisor to Huntington’s Disease Society of America, San Diego Chapter from 2010 to 2020.

 

Ms. Johnson brings to the Board a wealth of expertise and leadership experience across the technology sector, providing the Company with three decades of business operations and strategic development experience and unique insight into emerging technology trends.

 

 

 

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PROPOSAL NO. 1: ELECTION OF DIRECTORS

 

 

Paul D. Ryan

Age: 53

Director Since: 2019

 

 

Paul D. Ryan has been a Director of the Company since March 2019 and serves as Chair of the Nominating and Corporate Governance Committee and a member of the Compensation Committee. He is a general partner of the private equity firm Solamere Capital, LLC and chair of the firm’s Executive Partner Group. He is Vice Chairman of Teneo Strategy LLC and also serves on the Advisory Boards of Robert Bosch Gmbh and Paradigm Operations L.P. and the Boards of Directors of Xactus (formerly UniversalCIS) and SHINE Medical Technologies, LLC. Mr. Ryan served as Chairman of the Board of Directors of Executive Network Partnering Corporation from 2020 to 2022. He has been a Professor of the Practice, Political Science and Economics, at the University of Notre Dame since 2019. Mr. Ryan was the 54th Speaker of the U.S. House of Representatives from 2015 to 2019. Mr. Ryan was Chairman of the House Ways and Means Committee from January 2015 to October 2015 and Chairman of the House Budget Committee from 2011 to 2015. Mr. Ryan served as a Member of the U.S. House of Representatives from 1999 to 2019. In 2012, he was selected to serve as former Governor Mitt Romney’s Vice-Presidential nominee.

 

A proven leader and policy expert, Mr. Ryan’s extensive experience provides the Company with perspectives on strategy and operations in regulated industries. He offers the Board valuable insight on leadership, public policy and strategic development.

 

 

 

The Board unanimously recommends a vote “FOR”

the election of each of the nominees listed above.

 

 

   

 

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CORPORATE GOVERNANCE

Commitment to Corporate Governance and Ethical Compliance. The Company is committed to maintaining robust governance practices and a strong ethical culture that benefit the long-term interests of our stockholders. The Company, along with the Board, regularly reviews, updates and enhances its corporate governance practices and compliance and training programs, as appropriate, in light of stockholder feedback, changes in applicable laws, regulations and stock exchange requirements, and the evolving needs of the Company’s business. The Company’s corporate governance and compliance practices include:

 

 

Director Accountability. Each Board member is elected annually with a majority vote standard in uncontested elections, which includes a Director resignation policy as set forth in the Statement of Corporate Governance.

 

 

Independent Board Oversight. As outlined in the Statement of Corporate Governance, the independent Directors of the Board annually elect a Lead Independent Director who has substantive responsibilities and significant authority including over meeting schedules, agendas and information sent to the Board. The Board holds regular executive sessions of the independent Directors without management present and the Lead Independent Director presides over such sessions. At present, Jacques Nasser AC serves as the Lead Independent Director, which he will do through the Annual Meeting. The independent Directors will elect a new Lead Independent Director following the Annual Meeting.

 

 

Independent Board Committees. Only independent Directors serve on the Board’s key committees.

 

 

Dual-Class Capital Structure. The Nominating and Corporate Governance Committee recently conducted a thorough review of the benefits and considerations of multi-class capital structures, including their effects on economic performance, investment in innovation, and the protections that such structures allow to pursue independent journalism in media companies, and concluded that our dual-class capital structure continues to be appropriate and in the best long-term interests of our stockholders.

 

 

Board Oversight of Risk. Although risk management is primarily the responsibility of the Company’s management, the Board is responsible for overseeing management’s identification, monitoring and management of risk. The Board does not view risk in isolation; it considers risks in making significant business decisions and as part of the Company’s overall business strategy.

 

   

The Board, with or through its committees as appropriate, regularly receives periodic updates from, and discusses with, the Company’s Chair, Executive Chair and Chief Executive Officer, Chief Operating Officer, Chief Legal and Policy Officer, Chief Financial Officer and other members of senior management regarding significant risks to the Company, including in connection with the annual review of the Company’s business plan and its review of budgets, strategy and major transactions. These discussions include operational, strategic, legal and regulatory, financial, reputational and sustainability and corporate social responsibility risks, and the plans to address these risks. The independent Board members also discuss the Company’s significant risks when they meet in executive session without management.

 

   

In addition, each of the Board’s committees assists the Board in overseeing the management of the Company’s risks within the areas delegated to that committee by providing guidance and reports to the full Board with respect to these risks as appropriate. The Board conducted a review of its risk oversight responsibilities and updated the charters of its committees in fiscal 2022 to reflect their responsibilities and oversight of various risks. The Audit Committee is responsible for (i) reviewing the Company’s policies and practices with respect to risk assessment and management, including cybersecurity, (ii) overseeing the Company’s financial and other major risk exposures and the steps taken to monitor and control them, and (iii) providing guidance to the Board on such matters. The Compensation Committee has responsibility for monitoring risks associated with the design and administration of the Company’s compensation programs, and the Nominating and Corporate Governance Committee oversees risks relating to the Company’s corporate governance processes and sustainability and corporate social responsibility. Each committee has full access to management, as well as the ability to engage advisors.

 

   

In May 2023, the Company received a stockholder proposal from Arjuna Capital requesting that the Board issue a report on the merits of establishing a risk oversight committee of the Board. After discussing the proposal, the Board agreed to and has commissioned an independent evaluation of the merits of establishing a risk oversight committee and general Board governance. The Company has retained Cleary to analyze and report on the Board’s existing risk oversight governance and practice the allocation of responsibilities among the Board’s committees and the potential merits of establishing a standalone risk oversight committee. As part of this evaluation, Cleary will consult with Arjuna Capital and other risk oversight experts. This thorough third-party evaluation is ongoing and will likely not be completed before the Annual Meeting. Following Cleary’s delivery of the findings of its assessment and deliberations of the Board, the Board will disclose the key results of the report, including the rationale as to why or why not the Company will establish a risk oversight committee, no later than in the Company’s proxy statement for the 2024 annual meeting of stockholders.

 

 

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CORPORATE GOVERNANCE

 

 

Board Oversight of Human Capital Management and Sustainability and Corporate Social Responsibility Matters. The Compensation Committee assists the Board in reviewing and assessing the Company’s strategies and polices related to human capital management and oversight of the Company’s stockholder engagement efforts with respect to human capital management matters, together with the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee also oversees, reviews and monitors the Company’s sustainability and corporate social responsibility efforts, as well as the related risks and the Company’s reporting with respect to such matters.

 

 

Political Activities. The Nominating and Corporate Governance Committee reviews and oversees compliance with the Company’s Political Activities Policy and reviews and oversees its Political Activities Report. In direct response to stockholder feedback and as part of our efforts to promote transparency and accountability, in fiscal 2022, the Company adopted significant updates to its Political Activities Policy and enhanced its political activities disclosures by publishing its first annual Political Activities Report in February 2022. In fiscal 2023, in line with additional feedback received, the Company further enhanced the transparency of the report, which now also includes the membership dues the Company pays to trade associations in addition to the names of the associations. The Company updates the report on an annual basis. The policy and the Company’s 2022 Political Activities Report are available on the Company’s website at foxcorporation.com. FOX’s Political Activities Policy reflects our commitment to ensuring that all FOX employees, officers and Directors comply with all laws and regulations that apply to political activities due to employment or association with FOX. The policy provides for Board oversight of the Company’s political activities and the publication of the annual Political Activities Report, which confirms that fees paid to industry trade organizations are for membership dues and not earmarked for indirect grassroots lobbying.

FOX’s Political Activities Report outlines the Company’s engagement efforts in the following areas of corporate political activity in 2022:

 

   

the names of all individual candidate and committee recipients and amounts contributed by the FOX Political Action Committee;

 

   

the names of all individual state and local candidate recipients and amounts contributed by FOX;

 

   

our total federal lobbying expenses of $3.8 million;

 

   

the federal public policy matters on which the Company lobbied;

 

   

our lobbying activities in the four states in which we engaged outside lobbying services;

 

   

the names of FOX executives and outside consulting firms that performed lobbying activities for us; and

 

   

our trade association memberships and annual dues and details of our contributions to certain non-profit organizations.

 

 

Stock Ownership Requirements. The Compensation Committee maintains stock ownership guidelines for our named executive officers and non-executive Directors to ensure the close alignment of their interests with those of other long-term stockholders.

 

 

Prohibition on Hedging and Pledging. To further align interests and protect against unnecessary risk-taking, the Board has adopted a policy that prohibits all Directors and employees, including our named executive officers, from engaging in short sales of the Company’s securities and investing in Company-based derivative securities. In addition, the policy prohibits all Directors and employees, including our named executive officers, from pledging any Company securities that they hold directly, hedging any Company securities that they hold directly or indirectly or hedging or pledging equity compensation. The Compensation Committee periodically reviews the Company’s hedging and pledging policies.

 

 

Codes of Conduct and Other Corporate Governance Policies. The Board has adopted a Statement of Corporate Governance, Standards of Business Conduct and charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, each of which assist the Board in the exercise of its responsibilities and serve as a framework for the effective governance of the Company. The Board supervises the enforcement of the Standards of Business Conduct and other Company policies through the Company’s Ethics and Compliance Program, with the assistance of the Audit Committee, which oversees the content and operation of the program.

 

 

Harassment or Discrimination Based on Sex, Race or Other Protected Categories. The Standards of Business Conduct, together with the Preventing Harassment, Discrimination and Retaliation Policy, provide the Company with a framework for handling discrimination or harassment complaints and taking remedial measures if the Company determines that there has been a violation of the Company’s policies against such conduct. The Board also adopted a clawback policy, under which the Compensation Committee has sole discretion to require reimbursement of all or any portion of any

 

 

   

 

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  performance-based compensation, or discretionary bonus paid to any executive for the period when the executive engaged in harassment, discrimination and/or retaliation, including the failure to respond to allegations or complaints of such behaviors.

 

 

Workplace Civility and Inclusion. The Standards of Business Conduct, Statement of Corporate Governance and Preventing Harassment, Discrimination and Retaliation Policy affirm the Company’s commitment to corporate policies that create a safe, productive and welcoming workplace for all of the Company’s employees and foster an environment of trust. FOX has several employee-driven employee resource groups formed around shared identity, interests or pursuits for the purpose of advancing careers, encouraging a more respectful workplace community and fostering a sense of belonging.

 

 

Oversight and Ongoing Enhancement of Compliance Programs. The Company has adopted several operational compliance policies and programs to effectuate and supplement the principles set forth in the Standards of Business Conduct, including an Anti-Bribery and Anti-Corruption Policy, an Insider Trading and Confidentiality Policy, a Political Activities Policy, a Global Sanctions, Anti-Boycott and Import/Export Policy, a Human Rights Statement, a Preventing Harassment, Discrimination and Retaliation Policy and Supplier and Subcontractor Standards titled “Doing Business with FOX.” In addition, the Board has also adopted and oversees the Company’s Ethics and Compliance Program to enforce the Standards of Business Conduct and these policies. The Audit Committee assists the Board by reviewing the content and operation of the Ethics and Compliance Program, including the content of the Standards of Business Conduct. All employees, officers and Directors are required to complete periodic training on the key elements of these policies and the Standards of Business Conduct. The Company has established internal controls to monitor and evaluate ongoing compliance with these policies. These policies and controls are regularly reviewed and audited to evaluate their effectiveness and adequacy to address potential compliance risks posed by factual and legal developments.

 

 

Independent, Anonymous Complaint Process. The Company maintains a third-party managed hotline (“Alertline”) that permits the anonymous reporting of compliance and other concerns by employees and non-employees. All Alertline submissions are reviewed and investigated by appropriate members of management. The results of all such investigations are reported to senior management and the Audit Committee on a quarterly basis.

Independent Directors. The Board considers the criteria contained in the definition of “Independent Director” as set forth in the Nasdaq Stock Market (“Nasdaq”) Listing Rule 5605(a)(2) in its determination of whether a Director shall be deemed to be independent of the Company. However, the Board may determine that a Director is not independent for any reason it deems appropriate.

During its review of Director independence, the Board considers all relevant facts and circumstances. The Board considers transactions and relationships between each Director, or any member of his or her immediate family and the Company and its subsidiaries and affiliates. The Board also examines transactions and relationships between the Directors or their affiliates and members of the Company’s senior management or their affiliates. The purpose of this review is to determine whether any such relationships or transactions are inconsistent with a determination that the Director is independent.

As a result of its review, the Board affirmatively determined that Mr. Burck, Mr. Carey, Ms. Anne Dias, Mr. Hernandez, Mr. Nasser and Mr. Ryan are independent of the Company and its management under the standards set forth in the Nasdaq listing rules. Additionally, the Board has nominated Mr. Abbott and Ms. Johnson for election as directors of the Company. The Board has affirmatively determined that, if elected, Mr. Abbott and Ms. Johnson would be independent of the Company and its management under the standards set forth in the Nasdaq listing rules. A majority of Directors is independent as required under applicable Nasdaq listing rules and by the Statement of Corporate Governance and committee charters.

In making the independence determination with respect to Mr. Burck, the Board considered that Mr. Burck is a partner of Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”). The Company did not pay any fees to Quinn Emanuel during fiscal 2023. The Company has no current professional relationship with Quinn Emanuel, nor does it expect to enter into any relationship so long as Mr. Burck continues to serve on the Board. Consistent with Nasdaq listing rules, the Board determined that Mr. Burck’s position does not interfere with his independence.

Board Leadership Structure. The Board is responsible for establishing and maintaining the most effective leadership structure for the Company. To retain flexibility in carrying out this responsibility, the Board has not adopted a policy that expressly requires that the Chair of the Board shall be an independent member of the Board. However, pursuant to the Statement of Corporate Governance, if the Chair is not an independent Director, an independent, non-executive Director shall be elected annually by a majority of the independent, non-executive Directors of the Board as Lead Independent Director. Since March 19, 2019, the date on which the Company became a standalone publicly traded company, Mr. K. Rupert Murdoch AC has served as Chair and Mr. L.K. Murdoch has served as Executive Chair and Chief Executive Officer. On September 21, 2023, Mr. K.R. Murdoch notified the Company of his decision to step down as Chair following the Annual Meeting. He will be appointed Chairman Emeritus of the Board.

 

 

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The independent Directors have elected Mr. Nasser to serve as the Lead Independent Director, which he will do through the Annual Meeting. The independent Directors will elect a new Lead Independent Director following the Annual Meeting. As set forth in the Statement of Corporate Governance, the Lead Independent Director’s responsibilities include:

 

 

presiding over all meetings of the Board at which the Chairs of the Board are not present, including executive sessions of the non-executive Directors and the independent Directors;

 

 

communicating to the Chairs of the Board feedback from executive sessions as appropriate;

 

 

serving as liaison between the Chairs of the Board and the independent Directors;

 

 

approving information sent to the Board and meeting agendas for the Board;

 

 

approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;

 

 

calling meetings of the non-executive Directors and/or independent Directors, if desired;

 

 

participating in the Compensation Committee’s evaluation of the performance of the Chief Executive Officer;

 

 

supervising the self-evaluations of the Directors in coordination with the Nominating and Corporate Governance Committee;

 

 

supervising the Board’s determination of the independence of its Directors; and

 

 

ensuring his or her availability for consultation and direct communications, if requested by major stockholders.

The Board believes that this management and Board leadership structure, combined with the oversight of the Board comprised of a majority of independent Directors, a Lead Independent Director role with significant responsibilities and the Company’s robust corporate governance policies and procedures, effectively maintains independent oversight of management and is in the best interests of the Company’s stockholders. Having Messrs. K.R. Murdoch and L.K. Murdoch, who each are deeply involved with the Company’s businesses, serve as Chair and Executive Chair and Chief Executive Officer, respectively, provides strong leadership to the Board in the execution of the Company’s strategy and facilitates the flow of information between the Board and management.

The Board reviews its leadership structure at least annually taking into account the responsibilities of the leadership positions and the Directors qualified to hold such positions. In conducting this review, the Board considers, among other things: (i) the policies and practices in place that provide independent Board oversight; (ii) the Company’s performance and the effect a particular leadership structure may have on that performance; (iii) the structure that serves the best interests of the Company’s stockholders; and (iv) any relevant legislative or regulatory developments.

CEO and Management Succession Planning. The Board, with the assistance of the Compensation Committee, oversees succession planning for the CEO and other members of senior management. As set forth in the Statement of Corporate Governance, the Board, in coordination with the Compensation Committee, also sees that the Company has in place appropriate steps to address emergency CEO succession in the event of extraordinary circumstances.

As part of the succession planning process, the Chief Executive Officer provides the Compensation Committee recommendations and evaluations of candidates and their succession potential to the CEO and other senior management positions. The Compensation Committee reviews potential candidates with the Chief Executive Officer or other members of senior management as the Compensation Committee considers appropriate, which covers development needs and progress with respect to specific individuals. Directors engage with potential candidates at Board and committee meetings and periodically in less formal settings to allow personal assessment of candidates. Further, the Compensation Committee periodically reviews the qualifications, tenure and experience of members of senior management. The Lead Independent Director also participates in the Compensation Committee’s evaluation of the performance of the Chief Executive Officer.

The Compensation Committee reports on its succession planning review to the full Board, and the full Board reviews succession planning at least annually at a regularly scheduled Board meeting.

Emergency CEO succession planning enables the Company to respond to an unexpected vacancy in the CEO position while continuing the effective operation of the Company and minimizing any potential disruption to the Company’s business and operations, including in the case of a major catastrophe.

Stockholder Engagement. The Board values engaging directly with the Company’s stockholders. The Company has participated in several investor conferences and has held numerous meetings with institutional stockholders to discuss various

 

 

   

 

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topics, including its financial performance, strategy, corporate governance and executive compensation program. The Company is committed to ongoing engagement with its investors on all matters, including executive compensation, governance, political activities and board diversity. These engagement efforts take place through telephone calls, in-person meetings and correspondence with our investors. For further information, please see “Compensation Discussion and Analysis—Engagement with Stockholders and Compensation Committee’s Annual Review of its Compensation Practices.”

Statement of Corporate Governance. The Board has adopted a Statement of Corporate Governance that sets forth the Company’s corporate governance guidelines and practices. The full text of the Statement of Corporate Governance may be found on the Company’s website at foxcorporation.com/corporate-governance/statement-corporate-governance and is available in print to any stockholder from the Secretary of the Company. Each Director has certified that he or she has reviewed the Statement of Corporate Governance, has complied with it and will comply with it.

Standards of Business Conduct. The Board has adopted a code of ethics, the Standards of Business Conduct. The Standards of Business Conduct confirm the Company’s policy to conduct its affairs in compliance with all applicable laws and regulations and observe the highest standards of business ethics. The Standards of Business Conduct also apply to ensure compliance with stock exchange requirements and to ensure accountability at a senior management level for that compliance. The Company intends that the spirit, as well as the letter, of the Standards of Business Conduct be followed by all Directors, officers and employees of the Company, its subsidiaries and divisions, including the Company’s principal executive officer and principal financial and accounting officer. This is communicated to each new Director, officer and employee and was communicated to those in such positions at the time the Standards of Business Conduct were adopted. The Board has also adopted and, with the assistance of the Audit Committee, oversees the Company’s Ethics and Compliance Program to enforce the Standards of Business Conduct and other Company policies. The full text of the Standards of Business Conduct may be found on the Company’s website at foxcorporation.com/corporate-governance/sobc and is available in print to any stockholder from the Secretary of the Company. Amendments to the Standards of Business Conduct or any waiver from a provision of the Standards of Business Conduct requiring disclosure under applicable SEC rules will also be disclosed on the Company’s website.

Director Nomination Process. The Nominating and Corporate Governance Committee develops criteria for filling vacant Board positions, taking into consideration such factors as it deems appropriate, including the candidate’s education and background; his or her leadership and ability to exercise sound judgment; his or her general business experience and familiarity with the Company’s businesses; and whether he or she possesses unique expertise or perspective that will be of value to the Company. Candidates should not have any interests that would materially impair their ability to exercise independent judgment or otherwise discharge the fiduciary duties owed as a Director to the Company and its stockholders. All candidates must be individuals of personal integrity and ethical character, and who value and appreciate these qualities in others. It is expected that each Director will devote the necessary time to the fulfillment of his or her duties as a Director. In this regard, the Nominating and Corporate Governance Committee will consider the number and nature of each Director’s other commitments, including other directorships. The Nominating and Corporate Governance Committee seeks to promote a diversity of professional background, expertise, perspective, age, gender and ethnicity among Board members, including by ensuring that minority and female candidates are presented for consideration with each vacancy. In addition, the Board evaluates diversity as part of its annual review and evaluation of the Board’s conduct and performance.

Russell Reynolds Associates Inc. has been retained to assist the Nominating and Corporate Governance Committee in its work in identifying and vetting candidates from time to time. The Nominating and Corporate Governance Committee makes its recommendation to the full Board, which makes the final determination whether to nominate or appoint Director candidates. Russell Reynolds recommended Peggy Johnson as a Director candidate to the Nominating and Corporate Governance Committee. Mr. L.K. Murdoch, our Executive Chair and Chief Executive Officer, introduced Mr. Abbott to the Nominating and Corporate Governance Committee, which recommended Mr. Abbott to the full Board for nomination.

 

 

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The following table sets forth certain diversity statistics relating to the Board members as of the date of this proxy statement, as required by Nasdaq listing rules:

 

 

Board Diversity Matrix (as of September 22, 2023)

 
   

 Total Number of Directors

  

 

8

 

     
    

 

Female

 

  

 

Male

 

 

 Part I: Gender Identity

 

     

   Directors

  

 

1

 

  

 

7

 

 

 Part II: Demographic Background

 

     

   African American or Black

  

 

0

 

  

 

1

 

     

   Hispanic or Latinx

  

 

0

 

  

 

1

 

     

   White

  

 

1

 

  

 

6

 

     

   Two or More Races or Ethnicities

  

 

0

 

  

 

1

 

The FOX Board is comprised of highly skilled directors who bring a diverse range of skills and experiences to the Board’s oversight role. The following table summarizes the key skills and experiences the Board considered important in its decision to nominate or re-nominate that individual to the Board. Additional details about each individual Director nominee’s experiences and qualifications are presented in his or her biography.

 

     Executive   
Management   
Experience   
  Public   
Company   
Board   
Experience   
  Media   
Industry   
Experience   
 

Finance   

&   
Accounting   

  Corporate   
Strategy   
  Technology      Risk   
Management &   
ESG   
  Business   
Development,   
M&A &   
Capital   
Markets   
 

Government &   
Public   

Policy   

  Non-Profit,   
Education &   
Philanthropic   
Experience   

Directors:

 

Lachlan Murdoch

                                             

Tony Abbott

                                                         

William A. Burck

                                                               

Chase Carey

                                             

Roland A. Hernandez

                                             

Margaret “Peggy” L. Johnson

                                       

Paul D. Ryan

                                                   

Stockholder Nomination Procedure. The Company’s By-laws provide procedures for stockholders to nominate persons for election as Directors.

Pursuant to the By-laws, to be timely for the 2024 Annual Meeting (as defined below), stockholder nominations must be in writing and received by the Company’s Secretary at the Company’s principal executive offices between 5:00 p.m. (New York Time) on July 20, 2024 and 5:00 p.m. (New York Time) on August 19, 2024. Stockholder nominations must contain all information relating to the stockholder and the stockholder nominee as would be required pursuant to the By-laws. For further information, please see “2024 Annual Meeting of Stockholders” below.

Director candidates recommended by stockholders should meet the Director qualifications set forth under the heading “Director Nomination Process.” Director candidates recommended by stockholders who meet these Director qualifications will be considered by the Chair of the Nominating and Corporate Governance Committee, who will present the information on the candidate to the entire Nominating and Corporate Governance Committee. All Director candidates recommended by stockholders will be considered by the Nominating and Corporate Governance Committee in the same manner as any other candidate.

 

 

   

 

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Communication with the Board. Stockholders play an integral part in corporate governance and the Board ensures that stockholders are kept fully informed through:

 

 

information provided on the Company’s website foxcorporation.com, including the Company’s annual report which is distributed to all stockholders electing to receive it and which is available to all stockholders on request, as set forth under the heading “Annual Report;”

 

 

reports and other disclosures made periodically to the SEC and Nasdaq; and

 

 

notices and proxy statements of special and annual meetings of stockholders.

It is the policy of the Company to facilitate communications of stockholders and other interested parties with the Board and its various committees. Stockholders may raise matters of concern at the annual meetings of stockholders. In addition, any stockholder or other interested party wishing to communicate with any Director, including the Lead Independent Director, any committee of the Board or the Board as a whole, may do so by submitting such communication in writing and sending it by regular mail to the attention of the appropriate party or to the Board of Directors, Fox Corporation, 1211 Avenue of the Americas, New York, New York 10036. This information is also posted on the Company’s website at foxcorporation.com.

Director Evaluation Policy. The Lead Independent Director and the Nominating and Corporate Governance Committee are responsible for conducting an annual review and evaluation of the Board’s conduct and performance through a self-evaluation form that assesses, among other things, Board structure and composition, Board responsibilities, Board meetings and materials and Board and management interactions. The review seeks to identify specific areas, if any, in need of improvement or strengthening and culminates in a discussion by the full Board, as well as a separate discussion among the independent Directors, of the results and any actions to be taken. In addition, each standing committee of the Board evaluates its performance annually and reports to the Board on such evaluation.

Committees and Meetings of the Board of Directors

 

During fiscal 2023, the Board held a total of 13 meetings. All of the Directors attended at least 75% of the regularly scheduled and special meetings of the Board that he or she was eligible to attend and the meetings of the committees on which he or she served.

It is the policy of the Board to hold regular executive sessions of the independent Directors without management present. During fiscal 2023, the independent Directors of the Board met seven times without management present. Mr. Nasser currently serves as the Lead Independent Director and presides over executive sessions, which he will do through the Annual Meeting. The independent Directors will elect a new Lead Independent Director following the Annual Meeting. Directors are encouraged to attend and participate in the Company’s annual meetings of stockholders. All of the Directors attended the Company’s 2022 annual meeting of stockholders. In addition, during fiscal 2023 the Board formed a Special Committee comprised of independent Directors to explore a potential combination with News Corp. The Special Committee of the Board, which held a total of 11 meetings during fiscal 2023, was dissolved in January 2023.

The Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. These committees are comprised entirely of independent Directors, as required under the rules of the Exchange Act and Nasdaq. Each committee is governed by a written charter approved by the Board. These charters are available on the Company’s website at foxcorporation.com/corporate-governance/board-committees and are available in print to any stockholder from the Secretary of the Company.

Audit Committee. The Audit Committee consists of Mr. Hernandez, who serves as Chair, Ms. Dias and Mr. Nasser. Committee membership following the Annual Meeting will be determined at a later date, in accordance with the Nasdaq listing rules and rules under the Exchange Act.

The Audit Committee assists the Board in its oversight of:

 

 

the integrity of the Company’s financial statements and the Company’s financial reporting processes and systems of internal control;

 

 

the qualifications, independence and performance of the Company’s independent registered public accounting firm and the performance of the Company’s corporate auditors and corporate audit function;

 

 

the Company’s compliance with legal and regulatory requirements involving financial, accounting and internal control matters;

 

 

investigations into complaints concerning financial matters;

 

 

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the Company’s policies and practices with respect to risk assessment and management, including cybersecurity, and the Company’s major financial and other risk exposures and the steps taken to monitor and control them, and it provides guidance to the Board on such matters;

 

 

the review, approval and ratification of transactions with related parties; and

 

 

the content and operation of the Company’s Ethics and Compliance Program, including the Company’s Standards of Business Conduct.

The Audit Committee provides an avenue of communication among management, the independent registered public accounting firm, the corporate auditors and the Board. During fiscal 2023, the Audit Committee held seven meetings. The Audit Committee’s report required by the SEC rules is included in this proxy statement under the heading “Report of the Audit Committee.”

The Audit Committee Charter provides that its members shall consist entirely of Directors who the Board determines are “independent” in accordance with the Nasdaq listing rules. The Board determined that each member of the Audit Committee meets the foregoing independence requirements and that each member of the Audit Committee is financially sophisticated in accordance with the Nasdaq listing rules. The Board also determined that Ms. Dias, Mr. Hernandez and Mr. Nasser are “audit committee financial experts” as defined under the SEC rules.

Compensation Committee. The Compensation Committee consists of Mr. Nasser, who serves as Chair, Mr. Carey, Ms. Dias and Mr. Ryan. Committee membership following the Annual Meeting will be determined at a later date, in accordance with the Nasdaq listing rules and rules under the Exchange Act. The primary responsibilities of the Compensation Committee are:

 

 

to review and approve goals and objectives relevant to the compensation of the Chief Executive Officer, to evaluate the performance of the Chief Executive Officer in light of these goals and objectives and other factors the Compensation Committee deems appropriate, and, based on this review and evaluation, determine the compensation of the Chief Executive Officer;

 

 

to consider, authorize and oversee the incentive compensation plans in which the Company’s executive officers participate and the Company’s equity-based plans and recommend changes in such plans to the Board as needed, and to exercise all authority of the Board with respect to the administration of such plans, including the granting of awards under the Company’s incentive compensation plans and equity-based plans;

 

 

to review and approve equity awards and other fixed and performance-based compensation, benefits and terms of employment of the Company’s executive officers (as defined by SEC rules) and such other senior executives identified by the Compensation Committee after consultation with the Company’s Chief Executive Officer and other members of management;

 

 

to review and approve employment and severance arrangements and obligations for executive officers, including employment agreements, separation agreements and similar plans or agreements;

 

 

to review and approve or ratify the principal employment terms for each other employment arrangement (excluding arrangements for talent) where the sum of the base salary, bonus target and long-term incentive target for the contract period is equal to or greater than a threshold amount set by the Compensation Committee;

 

 

to review and approve other separation obligations that exceed by more than a certain amount set by the Compensation Committee those contractually provided for in an employment agreement approved or ratified by the Compensation Committee as described above;

 

 

to review the Company’s recruitment, retention, compensation, termination and severance policies for senior executives;

 

 

to review and assist with the development of executive succession plans and to consult with the Chief Executive Officer and other executive officers regarding the selection of senior executives;

 

 

to review at least annually the form and amount of compensation of non-executive Directors for service on the Board and its committees and recommend changes in such compensation to the Board as appropriate;

 

 

to review the Company’s compensation policies and practices applicable to all employees to determine whether they create risk-taking incentives that are reasonably likely to have a material adverse impact on the Company;

 

 

to consider the results of the most recent stockholder advisory vote on executive compensation matters in evaluating and determining the compensation of the Company’s Chief Executive Officer and in establishing and determining compensation of the Company’s other named executive officers;

 

 

   

 

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in coordination with the Nominating and Corporate Governance Committee, to oversee and make recommendations to the Board regarding the Company’s stockholder engagement with respect to compensation and human capital management matters;

 

 

to assist the Board, as necessary, in reviewing and assessing the Company’s strategies and policies related to human capital management;

 

 

to establish and periodically review stock ownership guidelines for executive officers and monitor compliance with ownership guidelines by executive officers and non-executive Directors;

 

 

to review periodically any hedging and pledging policy applicable to Directors and employees; and

 

 

to review and approve the creation or revision of any clawback policy allowing the Company to recoup compensation paid to executive officers.

During fiscal 2023, the Compensation Committee held four meetings. Pursuant to its charter, the Compensation Committee may delegate its authority to one or more subcommittees, members of the Board, the Chair of the Committee or officers of the Company, to the extent permitted by law, as it deems appropriate and in the best interests of the Company. The Compensation Committee has delegated to Messrs. L.K. Murdoch, Nallen and Tomsic the authority to make awards of restricted stock units and stock options, as applicable, within certain prescribed limits to certain eligible persons. Any awards made by Messrs. L.K. Murdoch, Nallen and Tomsic pursuant to this authority are reported to the Compensation Committee on an annual basis. Further discussion of the processes and procedures for the consideration and determination of the compensation paid to the named executive officers is found in the section titled “Compensation Discussion and Analysis.”

Pursuant to its charter, the Compensation Committee has the sole authority to select, retain, oversee, terminate and approve the fees and other retention terms of any compensation consultants, outside legal counsel and any other experts or advisors as the Committee may deem appropriate in its sole discretion.

The Board has retained Frederic W. Cook & Co., Inc. (“FW Cook”) to advise the Board and the Compensation Committee on its named executive officer and non-executive Director compensation practices and framework. FW Cook does not provide any other services to the Company. In February 2023, the Board considered FW Cook’s independence as the compensation consultant to the Board and the Compensation Committee by taking into account, among other things, the factors prescribed by the Nasdaq listing rules. Based on its evaluation, the Board determined that no conflict of interest exists.

Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee consists of Mr. Ryan, who serves as Chair, Ms. Dias and Messrs. Burck and Hernandez. Committee membership following the Annual Meeting will be determined at a later date, in accordance with the Nasdaq listing rules and rules under the Exchange Act. The primary responsibilities of the Nominating and Corporate Governance Committee are:

 

 

to manage a succession planning process for the Board, its leadership and its committees;

 

 

to develop, review and recommend to the Board criteria for identifying and evaluating Director candidates;

 

 

to review the qualifications of candidates for Director according to criteria approved by the Board and set forth in the Statement of Corporate Governance;

 

 

to maintain procedures for the consideration of Board candidates recommended by the Company’s stockholders;

 

 

to consider the performance and independence of incumbent Directors in determining whether to nominate them for re-election;

 

 

to recommend to the Board nominees for election or re-election to the Board at each annual meeting of stockholders or as necessary to fill vacancies and newly created directorships;

 

 

to advise and make recommendations to the Board on corporate governance matters;

 

 

to review communications from the Company’s stockholders;

 

 

to oversee the Company’s stockholder engagement and make recommendations to the Board regarding its involvement in stockholder engagement;

 

 

to oversee, review and monitor the Company’s efforts on sustainability and corporate social responsibility and related risks, including reporting with respect thereto, and provide guidance to the Board on such matters; and

 

 

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to review and oversee compliance with the Company’s Political Activities Policy, including the annual Political Activities Report.

The Nominating and Corporate Governance Committee also makes recommendations to the Board as to determinations of Director independence and conducts an annual self-evaluation for the Board. During fiscal 2023, the Nominating and Corporate Governance Committee held four meetings.

 

 

   

 

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The Company delivers the finest in news, sports and entertainment. We do this by serving all of our stakeholders, from our viewers and creative partners to our employees, distributors and advertisers, in a principled, transparent, respectful and fair manner. We are rooted by lessons learned and legacies built over decades through the energy and ingenuity of many colleagues and leaders. We have defied conventional wisdom and delivered enduring stories and experiences that capture the hearts and minds of audiences.

We undertake our role as a source of news, information, analysis and entertainment as both a responsibility and a privilege. We are purveyors of First Amendment activities and defenders of the U.S. Constitution and its rule of law. Our company will remain steadfast and focused on those core values in building a culture of trust, integrity and ethical behavior. FOX is uncompromisingly committed to being neutral arbiters of timely news, and we consider journalistic independence and editorial integrity to be sacrosanct. Through our opinion programming, we contribute to the marketplace of ideas by providing our audiences with engaging entertainment about virtually everything people care about – from politics to sports, business to health, weather, natural disasters to uplifting stories of courage, hope and humanity. The Company has adopted and published on our website the Standards of Business Conduct and key policies that further integrity and ethics, including our Preventing Harassment, Discrimination and Retaliation Policy, our Insider Trading and Confidentiality Policy, our Supplier and Subcontractor Standards titled “Doing Business with FOX,” our Human Rights Statement, our Political Activities Policy and our Global Anti-bribery and Anti-corruption Policy.

We approach corporate social responsibility as another way to create value – value by investing in our people, our reputation and our brands; value to our colleagues, neighbors and communities; and value in knowing our actions help others and in seeing the impact of our philanthropy. Our fourth annual Corporate Social Responsibility Report was published in August 2023 and is available at foxcorporation.com.

Investment in Our Human Capital Resources

 

Our workforce is the creative, strategic and operational engine of FOX’s success, and we are committed to developing and supporting our employees. We aim to develop our human capital by recruiting a talented and diverse workforce, offering competitive compensation and benefits, fostering a healthy work-life balance, providing growth and development opportunities, protecting health and safety, fostering workplace civility and inclusion and encouraging our employees to have an impact in their communities.

As of June 30, 2023, we had approximately 10,400 full-time employees. In the ordinary course of our business and consistent with industry practice, we also employ freelance and temporary workers who provide important production and broadcast support services. The vast majority of our workforce is based in the United States, and a portion is unionized. We have posted on our corporate website our Employment Information Report (EEO-1), showing the race, ethnicity and gender of our U.S. employees at foxcorporation.com/eeo-1-data.

Recruitment and Diversity

 

We are committed to diversity from the very top of the Company. Our Board of Directors requires that minority and female candidates are presented for consideration with each Director vacancy. We believe that the more voices in the room and the more diverse the experiences of our colleagues, the better FOX’s internal culture and external programming are. Our diversity enables us to be more reflective of the audiences we reach and enhances our ability to create news, sports and entertainment programming that serves all viewers across the country.

FOX lists job openings internally and externally because we believe this is one of the best tools to reach the widest and most diverse pool of candidates. We include the salary range in job postings to promote pay transparency and further pay equity. We also collaborate with professional organizations that offer FOX access to talent at recruiting events and conventions. These organizations include:

 

 

Asian American Journalists Association (AAJA);

 

 

National Association of Black Journalists (NABJ);

 

 

National Association of Hispanic Journalists (NAHJ);

 

 

Native American Journalists Association (NAJA);

 

 

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NLGJA: The Association of LGBTQ+ Journalists; and

 

 

Radio Television Digital News Association (RTDNA).

We also offer paid internships to build a diverse pipeline of early-career talent and emerging leaders. The FOX Internship Program offers students an exciting opportunity to gain practical experience, participating in real-world projects and seminars on the media industry, technology and professional development. This internship program, which runs for 8-10 weeks three times per year, welcomed over 475 students in calendar year 2022. We are proud that our internship program was listed on Vault’s 2022 and 2023 “100 Best Internships,” and it was the 2023 Winner of the Interns 2 Pros Internship Program of the Year (for excellence in its 2022 program). We also partner with the Emma Bowen Foundation, the T. Howard Foundation, the International Television and Radio Society, Sports Biz Careers, NAB Emerson Coleman Fellowship, Pathway at UCLA Extension and the Entertainment Industry College Outreach Program to provide media internships for promising students.

In addition, FOX has developed and implemented a number of internal early career training programs designed to provide outstanding individuals with workforce skills and professional development opportunities. These programs build the pipeline of our next generation of leaders, many of whom are from underrepresented backgrounds. Examples include:

 

 

FOX Ad Sales Training: Initiated in 2021, this rotational program aims to attract, develop, and retain early career talent. Through exposure to various functions within Ad Sales, the program develops professional skills of promising individuals recruited from outside FOX.

 

 

FOX Alternative Entertainment (“FAE”) FASTRACK: This highly selective accelerated producers’ initiative is designed to nurture producers with diverse backgrounds and life experiences, and create a pipeline for new, behind-the-camera talent on FAE series. Launched in 2020, the program places candidates as associate producers on production teams across various FAE-produced shows to provide valuable exposure to many facets of production.

 

 

FOX News Media Digital Rotational Program: Launched in 2021, this program strives to identify high potential talent from diverse backgrounds with a passion for the FOX News Media brand. The goal is to find staff placement for the individuals who complete the one-year rotational program across three key departments for four months each and have proven themselves to be integral members of the FOX News Media Digital team.

 

 

FOX News Multimedia Reporters Training Program: This program places talent from diverse backgrounds in multimedia reporter roles across the country, where they shoot, report, edit and produce their own high-end content across FOX News platforms. Through daily guidance and feedback from management, we challenge and enable the talent to continually hone their journalistic skills.

 

 

FOX Sports Professional Development Program: This program prepares production team leaders with skills for the unique sports production environment, such as communication and influence in the control room under short deadlines.

 

 

FOX Television Stations Sales Training Program: This program was created to develop and mentor the next generation of diverse and motivated sales professionals for FOX Television Stations. Trainees participate in both intensive classroom study of all aspects of the television station advertising sales business and shadowing of FOX Television Stations sales account executives.

 

 

FOX Writers Incubator Initiative: This FOX Entertainment program, which welcomed its first class in March 2022, nurtures and trains talented writers with diverse voices, backgrounds and life experiences. Writers work intensively on their scripts with the support of established writers, executives, directors and producers across all genres (comedy, drama, animation, etc.).

Employee Compensation and Benefits

 

We are proud to invest in our people through competitive pay and comprehensive benefits designed to attract, motivate and retain our talent. Providing equal pay for equal work, without regard to race, gender or other protected characteristics, is an imperative at FOX. We link our more senior employees’ pay to corporate performance through discretionary annual incentive compensation awards. Other employees may be eligible for equity awards or other long-term incentives depending on their business unit and level/role.

FOX also provides generous benefits that support the health, wellness and financial stability of our employees and their families. Full-time employees are eligible for medical insurance through a choice of several plans, in which employees also may enroll family members, including domestic partners and their children. Many employees benefit from the convenience of covered telemedicine visits as well as virtual primary care services. In addition, we provide vision and dental insurance, which includes coverage for adult orthodontic care. Our coverage is generous, with employee contributions and costs more favorable

 

 

   

 

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than national averages according to a 2022 Mercer LLC survey. Eligible employees may participate in flexible spending accounts, health savings accounts, and qualified transportation expense accounts. We also provide employees with a health advocate service, with experts who support employees and their eligible family members in navigating a wide range of health and insurance-related issues.

Full-time employees are eligible to receive paid Company holidays, floating holidays, vacation, sick and safe time, life insurance, accidental death and dismemberment insurance, business travel accident insurance, full salary replacement for up to 26 weeks of short-term disability, basic long-term disability insurance, charitable gift matching, cybersecurity and malware protection for personal devices and an employee assistance program that offers onsite counseling in our New York and Los Angeles worksites, as well as smoking cessation and weight management programs. The FOX 401(k) Savings Plan provides employees with a company contribution, and it offers a company match, Roth and post-tax contribution options and catch-up contributions. Freelance employees who work a minimum number of hours are also eligible for a medical, dental, and vision plan, as well as our FOX 401(k) Savings Plan and the health advocate service. Finally, FOX also offers employees group discounts in various voluntary benefits such as critical illness insurance, group universal life insurance, auto and home insurance, access to legal services, pet insurance, supplemental long-term disability insurance and student loan refinancing.

Work-Life Balance and Workplace Flexibility

 

We believe offering our employees the tools necessary for a healthy work-life balance empowers them to thrive in our modern workforce. To that end, FOX allows eligible individuals the opportunity to work on a partially remote (i.e., “hybrid”) or fully remote basis in appropriate circumstances. We support these working arrangements by deploying online collaboration tools, offering e-learning courses on effective remote work, providing reasonable office supplies and reimbursing business expenses. The Company also reimburses employees who work on a fully remote basis with a monthly stipend for business expenses (including mobile or other devices, Internet and electricity). Where appropriate, we provide technology and mobile communication devices, tailored to employee duties.

Our parental leave policy allows eligible new parents to bond with their children for a substantial period with full pay, and our workplaces have lactation rooms for our new mothers. We provide onsite subsidized childcare to full-time employees at the Los Angeles FOX Child Care Center. In addition, we offer up to 40 days of backup child, adult, elder and return-to-work care. Starting in 2022, we added backup pet care and online academic help with homework and tutors for all ages. In addition, we have onsite fitness centers in our New York and Los Angeles worksites.

Learning and Development

 

FOX offers employees multiple learning and development programs, including tuition reimbursement, management and leadership development, online and on-demand e-learning, live webinars and assessment tools. Our annual MentorMatch program provides junior employees with the tools and resources to grow their careers through relationship-building and networking. We also identify key individuals for ongoing talent management, retention and succession planning. Within FOX News Media and FOX Television Stations, we deliver specialized training on the First Amendment, defamation, privacy, infringement and other newsgathering and reporting topics to educate employees on these principles and provide advice on best practices.

Health and Safety

 

FOX is committed to protecting the health, safety and working environment of our employees, clients and neighbors. Our Environment, Health and Safety Program manages risks by implementing proactive, practical and feasible controls into daily work activities, as appropriate. Employees receive health and safety training orientations and have access to several workplace safety programs and resources. The program works to continuously improve performance through preventive measures, as well as efforts to correct hazards or dangerous conditions and minimize the environmental impact of our activities.

Moreover, FOX has a Global Security team that oversees the Company’s security and emergency response efforts as well as emergency planning and preparedness. The team proactively monitors, reports and responds to potential and actual threats to people, physical assets, property, as well as productions and events, using a number of tools, including advanced technology, active training programs and risk assessment and management processes.

Workplace Civility and Inclusion

 

Trust begins in the workplace every single day. We are committed to fostering a working environment of trust for our colleagues, in which people do their best work. Harassment, discrimination, retaliation and threats to health and safety all undermine our working environment of trust and make it harder for people to excel. Therefore, it is our policy to provide a safe work environment free from this or any other unlawful conduct.

 

 

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CORPORATE CULTURE AND SOCIAL RESPONSIBILITY

 

Creating and maintaining an environment free of discrimination and harassment begins at the highest leadership level of the Company and we have focused on embedding this commitment throughout our policies and practices. The FOX Standards of Business Conduct and the Preventing Harassment, Discrimination and Retaliation Policy, which are posted on our website, create our framework for addressing complaints and taking remedial measures as needed. These policies offer multiple complaint channels, including a third-party managed hotline that allows for anonymous reporting of concerns. In addition, all new hires must complete training on the Preventing Harassment, Discrimination and Retaliation Policy, as well as compliance and business ethics, and existing employees must complete the training periodically.

FOX also has several employee-driven Employee Resource Groups (ERGs) formed around shared identity, interests or pursuits for the purpose of advancing careers, encouraging a more respectful workplace community and fostering a sense of belonging. They include:

 

 

ABLE — promotes an inclusive environment and culture for our colleagues with disabilities through advocacy and allyship;

 

 

ACE (Asian Community Exchange) — serves Asian Americans at FOX by advancing our members, championing our stories and empowering our communities;

 

 

BLK+ — celebrates our Black colleagues and seeks to build community through programming and professional development while standing in solidarity with our allies;

 

 

HOLA (Hispanic Organization for Leadership and Advancement) — develops Hispanic leaders, enriches FOX’s diverse culture and drives positive impact;

 

 

PRIDE — cultivates community among FOX’s LGBTQ+ colleagues and allies, supports causes important to the LGBTQ+ community;

 

 

VETS — committed to the community of veterans, current service members, military supporters and military spouses employed at FOX by embracing our four core values — Community, Appreciation, Connection & Education;

 

 

WiT (Women in Tech) — attracts, advances and empowers women technologists and amplifies their impact at FOX; and

 

 

WOMEN@FOX — creates the space for developing female leadership at all levels and fostering a culture where all women thrive.

Maintaining a work environment where employees can thrive, advance and feel included is one of our top priorities at FOX.

As a result of these and other efforts, many outside organizations have recognized FOX for our deep commitment to inclusion and diversity. For example:

 

 

DiversityComm once again recognized FOX as a Top Employer and as a Top LGBTQ+ Friendly Company for 2023;

 

 

FOX was appointed to the Military Friendly® Employer list again for 2023 and named a Military Friendly® Brand; FOX also was rated a 4-Star Employer by VETS Indexes;

 

 

FOX was named to Disability Equality Index’s “Best Places to Work for Disability Inclusion” list for 2023, continuing year-over-year recognition as a top scoring employer; and

 

 

Black EOE Journal, HISPANIC Network Magazine, Professional WOMAN’s Magazine and U.S. Veterans Magazine have all listed FOX as a 2023 top employer.

Community Impact

 

FOX employees are deeply engaged in their communities. Nowhere is that more evident than through the commitment and involvement of our colleagues who volunteer their time, share their skills and contribute to worthy causes through our philanthropic program, FOX Forward. Through volunteer opportunities and service projects, FOX employees support community groups, veteran service organizations, local schools and families in need, and we encourage our colleagues to donate their time and resources to change-making organizations. Over the course of fiscal 2023, across all FOX businesses, our giving programs generated over $9 million in impact to multiple communities.

During the fiscal year, FOX and its employees supported military veterans, first responders and their families by partnering with Purple Heart Homes, U.S.VETS to champion their Make Camo Your Cause campaign and in an effort to leave a positive imprint in the Super Bowl LVII host city, we made a multi-year commitment to the Pat Tillman Veterans Center at Arizona State University to provide scholarship funding and mental health resources for student veterans. FOX continued to serve as an

 

 

   

 

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CORPORATE CULTURE AND SOCIAL RESPONSIBILITY

 

Annual Disaster Giving Program partner for the American Red Cross, while also making three additional donations of $1 million each to the Hurricane Ian and Southern and Midwest Tornadoes & Storms Relief Campaigns as well as ongoing humanitarian relief efforts in Ukraine.

As a part of our wider “FOX For Students” initiative, FOX became a Founding Partner of the Roybal Film and Television Production Magnet Fund. This investment provides historically underrepresented college- and career-ready students with the resources and experiences to pursue below-the-line careers in the film and television industry.

FOX holiday giving programs raised over $525,000 in November and December of 2022 for non-profit organizations across the country, including Team Rubicon, Angel City Sports, Feeding America and Toys for Tots, providing meals, coats, and holiday gifts for those in need.

As part of the Company’s commitment to give back to the communities in which its employees live and work, our FOX Giving program matches contributions made by regular full-time employees to eligible non-profit organizations, dollar for dollar, up to a total of $1,000 per fiscal year when submitted through the FOX Giving platform. We also track and reward employee volunteer hours with the opportunity to earn up to $1,000 per year that employees may direct to charities through the program. Over the course of the fiscal year, across all FOX businesses, contributions through FOX Giving exceeded $1 million.

Additionally, FOX provides invaluable in-kind support through public service announcements and editorial coverage for non-profit organizations such as Big Brothers, Big Sisters, The National Alliance on Mental Illness, Common Goal and the Elizabeth Dole Foundation, while also creating additional impact in our communities through efforts such as FOX Sports Supports’ Gamechanger Fund, FOX Entertainment’s #TVForAll, FOX Television Stations’ Holiday Community Giving Campaigns and FOX News Media’s support of the Police Athletic League NYC, Tunnel to Towers and Save Our Allies.

 

 

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PROPOSAL NO. 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Subject to stockholder ratification, the Audit Committee has selected Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm to audit the books and accounts of the Company for the fiscal year ending June 30, 2024. EY has audited the books and records of the Company since the fiscal year ended June 30, 2018. A representative of EY is expected to be present at the Annual Meeting to respond to appropriate questions and will be given the opportunity to make a statement if the representative desires to do so.

 

 

The Board unanimously recommends a vote “FOR” the proposal to ratify
Ernst & Young LLP as the Company’s independent registered public

accounting firm for the fiscal year ending June 30, 2024.

Fees Paid to Independent Registered Public Accounting Firm

 

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm. Accordingly, the Audit Committee has appointed EY to perform audit and other permissible non-audit services for the Company and its subsidiaries. The Company has formal procedures in place for the pre-approval by the Audit Committee of all services provided by EY. These pre-approval procedures are described below under “Audit Committee Pre-Approval Policies and Procedures.”

The description of the fees for professional services rendered to the Company and its subsidiaries by EY for the fiscal years ended June 30, 2023 and June 30, 2022 is set forth below.

 

     

 

Fiscal 2023

    

 

Fiscal 2022

 

Audit Fees(1)

  

  $

11,516,000

 

  

  $

11,477,000

 

Audit-Related Fees(2)

  

  $

657,000

 

  

  $

544,000

 

Tax Fees(3)

  

  $

709,000

 

  

  $

975,000

 

All Other Fees

  

  $

 

  

  $

 

Total Fees

  

  $

12,882,000

 

  

  $

12,996,000

 

 

(1)

Audit fees include: fees rendered in connection with the annual audit of the Company’s consolidated financial statements as of and for the fiscal years ended June 30, 2023 and June 30, 2022; the audit of internal control over financial reporting as of June 30, 2023 and June 30, 2022 (as required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”)); reviews of the Company’s unaudited condensed consolidated interim financial statements included in the Company’s regulatory filings; statutory and separate subsidiary audits; and other services normally provided by the independent registered public accounting firm in connection with regulatory filings.

 

(2)

Audit-related fees principally relate to employee benefit plan audits and due diligence related to mergers and acquisitions.

 

(3)

Tax fees include fees for various tax consultations.

Audit Committee Pre-Approval Policies and Procedures

 

The Audit Committee has established policies and procedures under which all audit and non-audit services performed by the Company’s independent registered public accounting firm must be approved in advance by the Audit Committee. The Audit Committee’s policy provides for pre-approval of audit, audit-related, tax and certain other services specifically described by the Audit Committee on an annual basis. In addition, individual engagements anticipated to exceed pre-established thresholds, as well as certain other services, must be separately approved. The policy also provides that the Audit Committee can delegate pre-approval authority to any member of the Audit Committee provided that the decision to pre-approve is communicated to the full Audit Committee at its next meeting. The Audit Committee has delegated this responsibility to the Chair of the Audit Committee. Management has also implemented internal procedures to ensure compliance with this policy. As required by the Sarbanes-Oxley Act, all audit and non-audit services provided in the fiscal years ended June 30, 2023 and June 30, 2022 have been pre-approved by the Audit Committee in accordance with these policies and procedures. The Audit Committee also reviewed the non-audit services provided by EY during the fiscal years ended June 30, 2023 and June 30, 2022, and determined that the provision of such non-audit services was compatible with maintaining the auditor’s independence.

 

 

   

 

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REPORT OF THE AUDIT COMMITTEE

The following Report of the Audit Committee shall not be deemed to be soliciting material or to be filed with the SEC under the Securities Act or the Exchange Act or incorporated by reference in any document so filed.

In accordance with its written charter, the Audit Committee assists the Board in its oversight of:

 

 

the integrity of the Company’s financial statements and the Company’s financial reporting processes and systems of internal control;

 

 

the qualifications, independence and performance of the Company’s independent registered public accounting firm and the performance of the Company’s corporate auditors and corporate audit function;

 

 

the Company’s compliance with legal and regulatory requirements involving financial, accounting and internal control matters;

 

 

investigations into complaints concerning financial matters;

 

 

the Company’s policies and practices with respect to risk assessment and management, including cybersecurity, and oversight of the Company’s major financial and other risk exposures and the steps taken to monitor and control them, and provides guidance to the Board on such matters;

 

 

the review, approval and ratification of transactions with related parties; and

 

 

the content and operation of the Company’s Ethics and Compliance Program, including the Company’s Standards of Business Conduct.

The Audit Committee provides an avenue of communication among management, the independent registered public accounting firm, the corporate auditors and the Board. Management has the primary responsibility for the preparation of the Company’s financial statements and the reporting process, including the system of internal control over financial reporting. The independent registered public accounting firm has the responsibility for the audit of those financial statements and internal control over financial reporting. The Audit Committee is directly responsible for the appointment and oversight of our independent registered public accounting firm, including review of their qualifications, independence and performance and their compensation.

A discussion of the Audit Committee’s composition is included in this proxy statement in the section titled “Committees and Meetings of the Board of Directors.”

In discharging its oversight responsibility as to the audit process, the Audit Committee (i) obtained from the independent registered public accounting firm a report describing all relationships between the independent registered public accounting firm and the Company that might bear on the independent registered public accounting firm’s independence and affirming its independence consistent with applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, (ii) discussed with the independent registered public accounting firm, which documented the discussion, any relationships that may impact the firm’s objectivity and independence, and (iii) considered whether the non-audit services provided to the Company by EY are compatible with maintaining the accountants’ independence. The Audit Committee reviewed with both the independent registered public accounting firm and the corporate auditors their identification of audit risks, audit plans and audit scope. The Audit Committee discussed with management, the independent registered public accounting firm and the corporate auditors the corporate audit function’s organization, responsibilities, budget and staffing.

The Audit Committee also discussed and reviewed with the independent registered public accounting firm all communications required by generally accepted auditing standards, including those described in Auditing Standards No. 1301, “Communication with Audit Committees,” as adopted by the Public Company Accounting Oversight Board. The Audit Committee met with the independent registered public accounting firm and the corporate auditors, both with management present and separately with each in private sessions without management present, to discuss and review the results of the independent registered public accounting firm’s audit of the financial statements, including the independent registered public accounting firm’s evaluation of the accounting principles, practices and judgments applied by management, the results of the corporate audit activities and the quality and adequacy of the Company’s internal controls.

The Audit Committee discussed the interim financial information contained in each of the quarterly earnings announcements with Company management and the independent registered public accounting firm. The Audit Committee also reviewed the audited financial statements of the Company as of and for the fiscal year ended June 30, 2023 with management and the independent registered public accounting firm.

 

 

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REPORT OF THE AUDIT COMMITTEE

 

The Audit Committee met with members of management, the independent registered public accounting firm and the corporate auditors to review the fiscal 2023 certifications provided by the Chief Executive Officer and the Chief Financial Officer under the Sarbanes-Oxley Act, the rules and regulations of the SEC and the overall certification process. At these meetings, management reviewed with the Audit Committee each of the Sarbanes-Oxley Act certification requirements including whether there were any (i) significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (ii) fraud, whether or not material, involving management or other employees who have a significant role in the Company’s internal control over financial reporting.

The Audit Committee also reviewed any anonymous complaints received through the Alertline reporting system to assist the Audit Committee in administering the anonymous complaint procedures outlined in the Company’s Standards of Business Conduct. The Sarbanes-Oxley Act required the Audit Committee to establish procedures for the confidential submission of employee concerns regarding questionable accounting, internal controls or auditing matters.

Based on the above-mentioned review and discussions with management, the independent registered public accounting firm and the corporate auditors, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2023, for filing with the SEC.

The Audit Committee annually reviews the independent registered public accounting firm’s independence and performance in connection with the Audit Committee’s determination of whether to retain EY or engage another firm. In the course of these reviews, the Audit Committee considers, among other things, such factors as:

 

 

EY’s historical and recent performance on the Company’s audit;

 

 

an analysis of EY’s known legal risks and significant proceedings;

 

 

external data relating to audit quality and performance, including recent Public Company Accounting Oversight Board reports on EY;

 

 

the appropriateness of EY’s fees for audit and non-audit services (for additional information on fees paid to EY please see “Proposal No. 2, Ratification of Selection of Independent Registered Public Accounting Firm”);

 

 

EY’s tenure as our independent registered public accounting firm, and its familiarity with our operations and businesses, accounting policies and practices and internal control over financial reporting (EY has audited the books and records of the Company since the fiscal year ended June 30, 2018);

 

 

EY’s industry expertise;

 

 

EY’s independence; and

 

 

the impact to the Company of changing auditors.

In accordance with the SEC rules and EY’s policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to our Company. For lead partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of the Company’s lead partner pursuant to this rotation policy involves meetings between the Chair and members of the Audit Committee and the candidate for the role, as well as a discussion by the full Audit Committee and with management.

Based on the above-mentioned review, the Audit Committee believes that it is in the best interests of the Company and its stockholders to retain EY to serve as our independent registered public accounting firm.

Accordingly, the Audit Committee also recommended the reappointment, subject to stockholder ratification, of EY as the Company’s independent registered public accounting firm, and the Board concurred in such recommendation.

THE AUDIT COMMITTEE:

Roland A. Hernandez (Chair)

Anne Dias

Jacques Nasser

 

 

   

 

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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

Arrangements between the Company and Directors or Director-Related Persons or Entities

 

Directors of the Company and Directors of its related parties, or their Director-related entities, conduct transactions with subsidiaries of the Company that occur within a normal employee, customer or supplier relationship on terms and conditions that are believed to be no more favorable than those with which it is reasonable to expect the entity would have adopted if dealing with the Director or Director-related entity in the ordinary course of business.

In fiscal 2023, a subsidiary of Fox Corporation entered into an arrangement in the ordinary course of business with 110% Content Limited (“110% Content”) for development services related to an unscripted development project and potential production and for which the Company has paid 110% Content $163,000. 110% Content is a television production company where Ms. Elisabeth Murdoch serves as a director and in which she is a minority shareholder. Ms. Murdoch is the daughter of Mr. K.R. Murdoch, Chair of the Company, and the sister of Mr. L.K. Murdoch, Executive Chair and Chief Executive Officer of the Company.

Policy for Evaluating Related Party Transactions

 

The Audit Committee has established written procedures for the review, approval or ratification of related party transactions. Pursuant to these procedures, the Audit Committee reviews and approves (i) all related party transactions when and if required to do so by applicable rules and regulations, (ii) all transactions between the Company or any of its subsidiaries and any of the Company’s executive officers, Directors, Director nominees, Directors emeritus or any of their immediate family members and (iii) all transactions between the Company or any of its subsidiaries and any security holder who is known by the Company to own more than 5% of any class of the Company’s voting securities or any immediate family members of such security holder, other than transactions (i) that have an aggregate dollar amount or value of less than $120,000 (either individually or in combination with a series of related transactions) or (ii) where a related party has an indirect interest solely as a result of being (a) a Director or, together with all other related parties, a less than 10% beneficial owner of an equity interest in another entity, or both, or (b) a limited partner in a partnership in which the related party, together with all other related parties, has an interest of less than 10%. All of the transactions described in this section that are subject to the Audit Committee’s policies and procedures described above are reviewed and approved or ratified by the Audit Committee of the Board in accordance with such policies and procedures.

 

 

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PROPOSAL NO. 3: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

As required pursuant to Section 14A of the Exchange Act, the Company provides our stockholders the opportunity to vote, on an advisory, nonbinding basis, on whether to approve named executive officer compensation.

As described in detail in the “Compensation Discussion and Analysis,” the Compensation Committee seeks to closely align the interests of our named executive officers with the interests of the Company’s stockholders. The Company’s executive compensation program is designed to attract, retain and motivate top executive talent, and support both short-term and long-term growth for stockholders.

The Board recommends that stockholders indicate their support for the Company’s compensation of its named executive officers. The vote on this resolution, commonly known as a “say on pay” resolution, is not intended to address any specific element of compensation but rather the overall named executive officer compensation program as described in this proxy statement. Although this vote is advisory and not binding on the Company or the Board, the Compensation Committee, which is responsible for developing and administering the Company’s executive compensation philosophy and program, will consider the results as part of its ongoing review of the Company’s executive compensation program.

Accordingly, we ask our stockholders to vote on the following resolution:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the fiscal year ended June 30, 2023 Summary Compensation Table and the other related tables and disclosure.”

 

 

The Board unanimously recommends an advisory vote “FOR” the

approval of the compensation of our named executive officers.

 

 

   

 

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COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officers

 

The Board and Compensation Committee believe FOX is best served by relying on a lean group of executives that have significant cross-functional responsibilities and are charged with performing multiple roles. To that end, the Board and the Compensation Committee have retained an accomplished group of senior executives to manage the growth of one of the country’s leading news, sports and entertainment companies in a fast-changing competitive environment. Each of our named executive officers brings institutional knowledge, breadth of expertise and unique leadership talent to the Company.

This Compensation Discussion and Analysis, together with the tables and accompanying descriptions that follow, provides a comprehensive explanation of our compensation design principles and the compensation awarded to or earned by the individuals listed below, who are our named executive officers for fiscal 2023:

 

 

Mr. K.R. Murdoch, the Company’s Chair, has led the Company and its predecessors for 71 years. Mr. K.R. Murdoch has been the driving force behind the evolution of the Company from the single, family-owned Australian newspaper he took over in 1953 to the global public media and entertainment company that was 21CF and that, through his vision and efforts, he most recently transformed into the focused news, sports and entertainment company that is FOX today. With his invaluable knowledge and expertise regarding the Company’s businesses, Mr. K.R. Murdoch provides broad strategic vision, actively advises on capital allocation and key operational decisions, and fosters the entrepreneurial culture throughout the Company. In addition, as Executive Chair of Fox News Media, Mr. K.R. Murdoch has vigorously driven brand extensions, digital enhancements and expanded newsgathering to power recent multi-platform growth on top of sustained ratings leadership at FOX News. His unique global perspectives also provide valuable insights to the Board and the Company’s leadership. On September 21, 2023, Mr. K.R. Murdoch notified the Company of his decision to step down as Chair following the Annual Meeting. He will be appointed Chairman Emeritus of the Board.

 

 

Mr. L.K. Murdoch, the Company’s Executive Chair and Chief Executive Officer, was a 21CF director for 25 years and had served 21CF in a number of executive roles from 1994 to 2005, including as Executive Chairman since 2015 and Co-Chairman from 2014 to 2015. In addition, he has led a number of international and domestic media companies. With his wealth of knowledge regarding the Company’s operations and the media industry, Mr. L.K. Murdoch supervises all strategic, operational and corporate decisions and oversees the Company’s portfolio of news, sports and entertainment assets in addition to leading our Board.

 

 

Mr. Nallen, the Company’s Chief Operating Officer, has been employed by the Company and its predecessors for 29 years. He previously served as 21CF’s Chief Financial Officer for six years and as an Executive Vice President and Deputy Chief Financial Officer of 21CF for 12 years, overseeing various functional areas, including corporate finance, tax, internal audit, and planning and analysis. He currently oversees the Company’s finance, strategy, business development, distribution, real estate and human capital functions.

 

 

Mr. Dinh, the Company’s Chief Legal and Policy Officer, has been employed by the Company and its predecessors for five years and previously served as a director of 21CF for 14 years. He currently leads all legal, compliance and regulatory matters and oversees government relations and public affairs.

 

 

Mr. Tomsic, the Company’s Chief Financial Officer, has been employed by the Company and its predecessors for 21 years. He previously served as Deputy Chief Financial Officer of 21CF for two years. He currently oversees all of our corporate and operational finance activities, including capital markets and merger and acquisition transactions, treasury, risk management, tax, financial planning and analysis, accounting and external reporting.

Compensation Design Principles

 

The Compensation Committee evaluates the compensation program for our named executive officers with the aim of (a) creating a holistic program to align the interests of our named executive officers with those of our stockholders, (b) maintaining the Company’s competitive position as a best-in-class employer and (c) encouraging retention of key talent who are uniquely positioned to drive performance and deliver results for our key stakeholders. In light of these goals, the Compensation Committee designs compensation applicable to our named executive officers in accordance with the following principles:

 

 Drive performance without encouraging unnecessary or excessive risk-taking

 

 

A major portion of target compensation of our named executive officers is variable and performance-based.

 

 

Our compensation program features a balanced combination of annual and long-term elements along with fixed and performance-based components.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

 

We cap payouts for annual and long-term performance-based incentives and incorporate risk mitigation features into our compensation program.

 

  Ensure policies and practices support long-term growth for stockholders

 

 

Performance-based compensation is the biggest element of our named executive officers’ annual pay.

 

 

Long-term performance-based incentives awarded to our named executive officers are based on challenging three-year performance objectives.

 

 

We maintain robust stock ownership guidelines for named executive officers and non-executive Directors.

 

 

We regularly review stock utilization and overhang.

 

  Structure packages to attract, retain and motivate top executive talent

 

 

We compete to recruit and retain executives against a relatively small number of large, complex, diversified and publicly traded broadcasting, cable and satellite, and entertainment companies.

 

 

Our goal is to provide compensation packages that are competitive with prevailing practices in our industry.

 

  Follow compensation best practices

 

 

We closely link pay to performance.

 

 

We use diversified performance metrics and set rigorous short- and long-term goals for our executives.

 

 

We maintain a clawback policy covering performance-based compensation.

 

  Prohibit activities inconsistent with stockholder interests

 

 

We do not provide any “single trigger” change in control severance benefits.

 

 

We do not pay excise tax gross-ups associated with change in control benefits.

 

 

We do not pay dividends on unvested equity awards.

 

 

We prohibit all of our Directors and employees, including our named executive officers, from engaging in short sales of FOX securities and investing in FOX-based derivative securities.

 

 

We prohibit all of our Directors and employees, including our named executive officers, from pledging any FOX securities they hold directly, hedging any FOX securities they hold directly or indirectly, or hedging or pledging equity compensation.

In adherence to these compensation design principles, the significant majority of fiscal 2023 compensation for our named executive officers is at risk, as follows:

 

       
Average of the Named Executive
Officers as a Group
   Percentage of
Target Direct
Compensation
   At
Risk?
   Rationale
   

Base Salary

     22%    No    Attract and retain quality executive talent
   

Annual Incentive

     31%    Yes    Motivate achievement of pre-specified annual goals
   

Performance-based Stock Units

     12%    Yes    Drive the achievement of: (1) long-term (three-year) operational, strategic goals that promotes the creation of sustainable stockholder value, and (2) relative stockholder return
   

Performance Stock Options

     12%    Yes    Incentivize sustained share price growth by having the award vest only if FOX’s stock price achieves pre-specified goals; the value of the award increases in line with incremental stockholder value creation
   

Restricted Stock Units

     23%    Yes    Support retention and the alignment of interests with long-term stockholders
   

Total Direct Compensation

   100%    78%    78% of our named executive officers’ Total Direct Compensation is at risk, and 85% of our CEO’s Total Direct Compensation is at risk, meaning that realizable pay is conditioned on the achievement of short-and long-term goals.

 

 

   

 

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The table above represents amounts approved by the Compensation Committee for fiscal 2023. The aggregate cost of our fiscal 2023 target total direct named executive officer compensation is approximately the 45th percentile of our Peer Group (as defined below), which the Compensation Committee believes appropriately balances our need to engage an elite group of executives and our need to provide value to our stockholders. For further information, please see “Use of Information on Peer Companies and Industry Trends” below.

Fiscal 2023 Business and Management Review

 

FOX once again delivered strong operational and financial results in fiscal 2023. The Company focuses on producing and distributing quality news, sports and entertainment content that engages and informs audiences, deepens consumer relationships and creates more compelling product offerings through its iconic brands, including FOX News Media, FOX Sports, FOX Entertainment, FOX Television Stations and Tubi Media Group. FOX also continued to focus on its growth in fiscal 2023, investing in organic initiatives, while delivering meaningful returns of capital to stockholders.

During the fiscal year, FOX continued to reach and, in some cases, exceed its strategic goals, all pursuant to its fundamental priorities of delivering quality live and on-demand programming to large and engaged audiences, securing value for its market-leading brands and content and positioning itself for long-term growth. Fiscal 2023 highlights include:

 

 

FOX News continued as the top-rated national cable news channel in both Monday to Friday primetime and total day viewing, a ranking it has held for over 20 consecutive years. For the fiscal year, FOX News delivered primetime total viewership that beat the combined viewership of its closest cable news channel competitors and delivered ratings throughout the year that were comparable to ratings delivered by the four broadcast networks. FOX Business finished as the most-watched business network among total business day viewers each quarter during fiscal 2023. Additionally, FOX News Media continued to enhance its digital footprint as the FOX Nation SVOD service continued to grow its subscriber base and the FOX Weather FAST service expanded its distribution while significantly increasing audience engagement.

 

 

FOX Sports was the industry leader in live events for the fourth consecutive calendar year with 265 billion minutes of live sports viewing on the FOX Network and followed that achievement with the broadcast of Super Bowl LVII, which set an all-time record as the most-watched program in U.S. television history. During the fiscal year, the NFL regular season on FOX averaged over 19 million viewers and finished as the #1 NFL package on television highlighted by the Thanksgiving Day matchup between the Dallas Cowboys and New York Giants, which was the most watched regular season NFL game in history. FOX’s Americas Game of the Week remained television’s #1 show for the 14th year in a row and FOX’s Big Noon Saturday continued as the #1 game window in all of college football. FOX Sports solidified its leadership in college football, entering into a landmark rights extension with the Big Ten Conference. The 2022 FIFA Men’s World Cup averaged 3.6 million viewers across the FOX Network and FS1, up 30% from the 2018 matches, with the final ranking as the most watched men’s soccer game in U.S. history. In addition, the USFL returned for its second season and expanded into additional markets.

 

 

FOX Entertainment delivered over 150 million unduplicated monthly viewers across all platforms during the 2022-2023 broadcast season. FOX featured the #1 entertainment telecast with Next Level Chef following Super Bowl LVII, the #1 broadcast drama 9-1-1, #1 new unscripted series Special Forces: Worlds Toughest Test, #1 new scripted drama in 2023 Accused, and three of the top 10 comedies on broadcast television with The Simpsons, Family Guy and Bobs Burgers during the 2022-2023 broadcast season. FOX Entertainment is investing in more co-production arrangements and owns a stake in each new series that premiered on the FOX Network during the 2022-2023 broadcast season. During the year, FOX Entertainment and Hulu renewed a multi-year content partnership, encompassing in-season streaming rights for FOX Entertainment’s expansive programming slate and an extensive multi-platform strategic marketing alliance. Additionally, FOX Entertainment launched FOX Entertainment Global which oversees international and multi-platform sales of content from FOX and its portfolio of in-house production studios, as well as programming acquired from third-party producers.

 

 

FOX Television Stations achieved record political revenues from a competitive U.S. midterm election cycle during the fiscal year. FOX Television Stations remains a leader in local news coverage, producing approximately 1,200 hours of local news coverage each week across 18 markets, including 14 of the top 15 DMAs. During the year, FOX Television Stations grew and enhanced its digital offerings through the expansion and success of the FOX Local Extension (FLX) digital advertising platform as well as the rollout of local news content on connected televisions and FAST services in a number of markets. These initiatives led to digital advertising revenue growth of over 50% as compared to the prior fiscal year.

 

 

In fiscal 2023, Tubi delivered record revenues, which grew 33% compared to the prior year. Total view time (the total number of hours watched) reached approximately 6.8 billion hours over the course of fiscal 2023, an increase of over 50% over the prior year. According to Nielsen’s The Gauge, Tubi was the most-watched FAST service in the U.S., reaching approximately 1.4% of total TV viewing minutes in June 2023. Tubi also expanded its content library to over 60,000 titles, including the premiere of over 100 new original titles throughout the fiscal year. Tubi also grew its linear streaming

 

 

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  offerings to supplement its on-demand library, with the launch of over 100 sports, entertainment and local news channels to bring its total offering to nearly 250 channels as of the end of fiscal 2023.

 

 

The Company generated affiliate fee revenue growth of 3% due to higher average rates per subscriber for its owned and operated stations and higher reverse retransmission fees collected from third-party stations, led by contractual annual price increases on existing distribution agreements and from affiliate agreement renewals. Additionally, the Company’s key networks continue to be distributed on all major virtual MVPD services, reflecting the “must have” nature of the Company’s content.

 

 

The Company generated robust advertising revenue growth of 12%, as its portfolio of leadership live news and sports brands continued to deliver engaged, real-time audiences at scale. During the fiscal year, the Company saw record revenues from the U.S. midterm election cycle and benefitted from the broadcast of Super Bowl LVII and the FIFA Men’s World Cup. Tubi also set new engagement records in fiscal 2023.

 

 

The Company ended the year with approximately $4.3 billion of cash and cash equivalents on its balance sheet while returning approximately $2.3 billion of capital to its stockholders in fiscal 2023 through the Company’s cash dividend and its stock repurchase program. During the fiscal year, the Company authorized incremental stock repurchases of $3 billion, including a $1 billion accelerated share repurchase transaction. As of August 8, 2023, the Company has repurchased over $4.6 billion (approximately 130 million shares) under the stock repurchase program since the program’s launch in November 2019.

 

 

FOX continues to broaden and deepen its corporate social responsibility efforts, with a focus on local community engagement. Our recent environmental, social and governance achievements are highlighted in FOX’s fourth annual Corporate Social Responsibility Report, published in August 2023.

Use of Information on Peer Companies and Industry Trends

 

A competitive compensation program is essential to attract and retain talented executives with the requisite skills and experience to successfully manage the Company’s businesses. The Company competes against a relatively small number of large, complex, diversified and publicly traded broadcasting, cable and satellite, and entertainment companies. The Compensation Committee considers the compensation practices of a peer group of companies (the “Peer Group”), FOX’s performance relative to the performance of members of the Peer Group, as well as evolving broad market practices to ensure that it remains informed when making compensation decisions. Because of the complex mix of industries and markets in which the Company operates, the Compensation Committee does not target any element of compensation or total compensation to a specific range within the Peer Group. The goal of the Compensation Committee is to provide total compensation packages that are competitive with prevailing practices in our industry and are reflective of FOX’s performance in our industry relative to the Peer Group.

The Compensation Committee, with advice from FW Cook, its independent compensation consultant, annually reviews the Peer Group and approves updates to its composition as necessary to better reflect the Company’s competitive landscape and account for any corporate changes and reorganizations among members of the Peer Group as well as changes in relative size. For fiscal 2023, no changes were made to the Peer Group, which consisted of AMC Networks Inc., Charter Communications, Inc., Comcast Corporation, Liberty Global plc, Live Nation Entertainment, Inc., MSG Networks Inc., Netflix, Inc., Nexstar Media Group, Inc., Paramount Global (formerly known as ViacomCBS, Inc.), Sinclair Broadcast Group, Inc., Sirius XM Holdings, Inc., Warner Bros. Discovery, Inc. (formed through the merger of Discovery, Inc. and the WarnerMedia business of AT&T, Inc.) and The Walt Disney Company. When reviewing and approving the fiscal 2023 base salary, target non-equity incentive compensation and target long-term incentive compensation for our named executive officers, the Compensation Committee considered the compensation practices of the Peer Group.

In addition, the Compensation Committee considered the cost to FOX for the compensation provided to our named executive officers in the aggregate, relative to the aggregate cost of the top five executives of our Peer Group. In light of FOX’s unique named executive officer structure, the cross-functional roles assumed by each named executive officer and the significant tenure and history of many of our named executive officers, the Compensation Committee believes that evaluating the aggregate cost of compensation paid to our named executive officers relative to the aggregate cost borne by the Peer Group appropriately assesses FOX’s compensation expenditures while avoiding comparisons among individual named executive officers that may not align with their roles or contributions to our business. While the Compensation Committee does not target the aggregate cost of named executive officer compensation to a specific range within the Peer Group, the aggregate cost of our fiscal 2023 target total direct named executive officer compensation is approximately the 45th percentile of our Peer Group, which the Compensation Committee believes appropriately balances our need to recruit, retain and motivate an elite group of executives and our need to provide value to our stockholders.

 

 

   

 

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Elements of Compensation

 

The key elements of our executive compensation program for our named executive officers are (1) base salary; (2) annual incentive compensation that is based on an evaluation of Company, individual and group performance; (3) long-term incentive awards that support alignment with the interests of our long-term stockholders and are contingent on the achievement of long-term share price, relative total shareholder return, and financial performance goals; and (4) retirement benefits. In establishing the elements of our named executive officers’ compensation, the Compensation Committee considered each named executive officer’s management experience, cross-functional duties and responsibilities with the Company; each named executive officer’s duration of service to the Company and its predecessors; the industry and peer group in which the Company competes for talent; and, in certain instances, the compensation required to recruit and retain the named executive officer into a role with the Company. For fiscal 2023, 85% of the Chief Executive Officer’s target total direct compensation and 78% of all named executive officers’ target total direct compensation was “at risk.”

Base Salary

One element of compensation needed to attract and retain an employee in any organization is base salary. Base salary is the fixed element of a named executive officer’s compensation and does not vary with performance. The base salary provided for by the respective employment agreements of Messrs. L.K. Murdoch, Nallen, Dinh and Tomsic, and the base salary for Mr. K.R. Murdoch, were approved by the Compensation Committee in the context of each named executive officer’s particular position; the responsibilities associated with that position; his experience, expertise, knowledge and qualifications; market factors; the industry in which we operate and compete; recruitment and retention factors; and the Company’s overall compensation principles.

Set forth below are the base salaries for each of the named executive officers for fiscal 2023.

 

   
Named Executive Officer    Base Salary

K. Rupert Murdoch

   $5.0 million  

Lachlan K. Murdoch

   $3.0 million  

John P. Nallen

   $2.0 million  

Viet D. Dinh

   $3.0 million  

Steven Tomsic

   $1.75 million

The Compensation Committee annually reviews the base salary of each of the named executive officers, subject to the terms of any applicable employment agreements. Base salary may be adjusted if the Compensation Committee determines that an adjustment is warranted or that a different mix of compensation elements may more appropriately compensate the individual named executive officer in light of the Company’s compensation objectives.

Annual Incentive Compensation

The named executive officers have a direct influence on our operations and strategy. The Compensation Committee believes that a significant portion of each named executive officer’s total compensation opportunity should be based on the Company’s financial and operating performance and progress against strategic goals and individual and group contributions. This framework fosters a performance-driven, pay-for-performance culture that aligns our named executive officers’ interests with those of our stockholders while also rewarding the named executive officers for superior individual and group achievements.

The Compensation Committee thoroughly reviewed the fiscal 2023 annual non-equity incentive compensation program (the “Annual Incentive Compensation”) and, following this review, the Compensation Committee elected not to change the performance metrics under which the fiscal 2023 Annual Incentive Compensation would be assessed. Consistent with the prior fiscal year, the Compensation Committee determined that 75% of the fiscal 2023 Annual Incentive Compensation would be based on the Company’s achievement of Adjusted EBITDA2 versus the budgeted Adjusted EBITDA goal, and 25% of the Annual Incentive Compensation would be based on qualitative factors, including each named executive officer’s contributions to the Company’s financial and non-financial objectives, individually and as a group. The Compensation Committee believes that Adjusted EBITDA is widely used by investors and stockholders to measure the Company’s performance and is a material driver in stockholder returns and therefore is the appropriate quantitative metric against which our named executive officers’

 

2 

“Adjusted EBITDA” is defined as revenues less operating expenses and selling, general and administrative expenses. Adjusted EBITDA does not include amortization of cable distribution investments, depreciation and amortization, impairment and restructuring charges, interest expense, interest income, other, net and income tax (expense) benefit. Adjusted EBITDA is the aggregation of the Segment EBITDA of each of the Company’s operating segments. For a discussion of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA, see pages 45 – 46 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

 

 

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performance should be assessed. The target range of the Adjusted EBITDA metric established by the Compensation Committee is designed to drive total stockholder return for our stockholders by providing our named executive officers with rigorous, but achievable, short-term Company performance metrics.

The Compensation Committee’s determination of the performance levels for the achievement of the financial performance metric are reflected in the table below, with performance that falls between the specified levels to be calculated on a linear basis:

 

     
Performance Level    Performance Goal as a Percentage
of Target Adjusted EBITDA
   Payout as a Percentage of Financial
Performance Portion of the Annual
Incentive Compensation

Maximum

  

120%

  

200%

Target

  

100%

  

100%

Threshold

  

  80%

  

  50%

The Compensation Committee approved the following target and maximum Annual Incentive Compensation opportunities for each named executive officer for fiscal 2023. No changes were made to the value of target bonuses for our named executive officers for fiscal 2023.

 

Named Executive Officer   

 

Fiscal 2023 Target Annual Incentive
Opportunity

  

 

Fiscal 2023 Maximum Annual
Incentive Opportunity

     

K. Rupert Murdoch

  

120% of Base Salary

  

200% of Target

     

Lachlan K. Murdoch

  

200% of Base Salary

  

200% of Target

     

John P. Nallen

  

150% of Base Salary

  

200% of Target

     

Viet D. Dinh

  

100% of Base Salary

  

200% of Target

     

Steven Tomsic

  

143% of Base Salary

  

200% of Target

Quantitative Element of Annual Incentive Compensation

For fiscal 2023, the Compensation Committee set threshold and maximum performance levels and target performance range for Adjusted EBITDA for the quantitative element of the Annual Incentive Compensation opportunities as follows:

 

Performance Level

  

Adjusted EBITDA (in billions)

  

Payout as a % of Target

Maximum

  

$4.24

  

200%

Target

  

$3.48 – $3.58

  

100%

Threshold

  

$2.83

  

  50%

A narrow target range is used, rather than a fixed dollar goal, to address challenges associated with setting performance goals with precision and to avoid unintended windfalls or shortfalls in actual payouts to the named executive officers. No quantitative portion of the Annual Incentive Compensation is payable below the threshold performance level and no additional amount is payable above the maximum performance level.

The Company’s fiscal 2023 Adjusted EBITDA of $3.19 billion fell between the threshold performance level and the lower end of the target performance range and therefore the Compensation Committee determined that the quantitative portion of the Annual Incentive Compensation was earned at 78% of the target range.

The quantitative portion of the fiscal 2023 Annual Incentive Compensation was calculated as follows:

 

       

Calculation Step

   Amount
Achieved
     Threshold      ($ amounts
in millions)
 
         

Subtract Threshold from the Amount Achieved

     $3,191      $ 2,826        A               $365  
         

Calculate difference between Target and Threshold

     $3,482      $ 2,826        B               $656  
         

Divide result by the difference between Target and Threshold to yield percentage of Threshold to Target achieved

                       A/B = C          56
         

Multiply by difference in payout opportunity between Threshold and Target

     100      50      D               50
         

Percentage of payout multiplier earned

                       C*D = E          28
         

Plus percentage earned for achieving Threshold

                       F               50
         

Adjusted EBITDA payout multiplier earned

                       E+F             78

 

 

   

 

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The table below illustrates the calculation of the quantitative portion of our named executive officers’ Annual Incentive Compensation opportunity:

 

       
Named Executive Officers   

75% of Target

    (Quantitative Portion)    

       Adjusted EBITDA    
Payout Multiplier
  

    Annual Incentive Compensation    

Earned based on Quantitative
Performance

K. Rupert Murdoch

  

$4,500,000

  

78%

  

$3,510,000

Lachlan K. Murdoch

  

$4,500,000

  

78%

  

$3,510,000

John P. Nallen

  

$2,250,000

  

78%

  

$1,755,000

Viet D. Dinh

  

$2,250,000

  

78%

  

$1,755,000

Steven Tomsic

  

$1,875,000

  

78%

  

$1,462,500

Qualitative Element of Annual Incentive Compensation

Additionally, when determining each named executive officer’s Annual Incentive Compensation, the Compensation Committee also considered the named executive officers’ performance, individually and collectively as a group, against the qualitative factors and related evaluation metrics established in advance by the Compensation Committee for fiscal 2023, as well as other factors the Compensation Committee in its discretion deemed relevant to the achievement of the qualitative element of the Annual Incentive Compensation. This assessment comprised 25% of the Annual Incentive Compensation determination.

The performance factors underpinning this component of the Annual Incentive Compensation help focus the named executive officers on cross-functional strategic initiatives that are imperative to the Company’s continued long-term success. In order to evaluate the extent to which the performance factors were achieved for fiscal 2023, the Compensation Committee undertook a qualitative assessment of the Company’s performance and the performance of our named executive officers, individually and collectively as a group, taking into account the following qualitative factors and fiscal 2023 achievements:

 

   
Qualitative Performance
Factor
   Fiscal 2023 Achievements

 

On-screen leadership

  

 

•  FOX News continued as the top-rated national cable news channel in both Monday to Friday primetime and total day viewing, a ranking it has held for over 20 consecutive years. For the fiscal year, FOX News delivered primetime total viewership that beat the combined viewership of its closest cable news channel competitors and delivered ratings throughout the year that were comparable to ratings delivered by the four broadcast networks. FOX Business finished as the most-watched business network among total business day viewers each quarter during fiscal 2023.

 

•  FOX Sports was the industry leader in live events for the fourth consecutive calendar year and followed that achievement with the broadcast of Super Bowl LVII, which set an all-time record as the most-watched program in U.S. television history. During the fiscal year, the NFL regular season on FOX averaged over 19 million viewers and finished as the #1 NFL package on television. FOX’s America’s Game of the Week remained television’s #1 show for the 14th year in a row and FOX’s Big Noon Saturday continued as the #1 game window in all of college football. FOX Sports solidified its leadership in college football, entering into a landmark rights extension with the Big Ten Conference. The 2022 FIFA Men’s World Cup averaged 3.6 million viewers across the FOX Network and FS1, up 30% from the 2018 matches, with the final ranking as the most watched men’s soccer game in U.S. history.

 

•  FOX Television Stations was the #1 or #2 rated news provider in the hours of 5 a.m. – 9 a.m. in the majority of the markets in which it operates. FOX Television Stations achieved record political advertising revenues from a competitive U.S. midterm election cycle during the fiscal year.

 

•  Tubi expanded its content library to over 60,000 titles, including the premiere of over 100 new original titles throughout the fiscal year, up from 40 in the prior year.

 

•  During the 2022-2023 broadcast season, FOX featured the #1 entertainment telecast with Next Level Chef following Super Bowl LVII, the #1 broadcast drama 9-1-1, #1 new unscripted series Special Forces: World’s Toughest Test, #1 new scripted drama in 2023 Accused, and three of the top 10 comedies on broadcast television with The Simpsons, Family Guy and Bob’s Burgers.

 

 

 

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Qualitative Performance
Factor
   Fiscal 2023 Achievements

 

Expanding the Company’s digital/direct-to-consumer reach

  

 

•  FOX News Media continued to enhance its digital footprint as FOX Nation continued to grow its subscriber base and FOX Weather expanded its distribution while significantly increasing audience engagement. FOX News Digital total page views grew 10% over the prior year, led by a 22% increase in mobile app engagement, and it undertook a refresh of the foxnews.com homepage.

 

•  Tubi became the most-watched FAST service in the U.S., reaching approximately 1.4% of total TV viewing minutes in June 2023, as measured by Nielsen’s The Gauge. In fiscal 2023, Tubi delivered record revenues, which grew approximately 33% compared to the prior year. Total view time (the total number of hours watched) reached approximately 6.8 billion hours over the course of fiscal 2023, an increase of over 50% over the prior year.

 

•  FOX Television Stations grew its digital advertising revenues by over 50% as compared to the prior fiscal year, led by the expansion and success of the FOX Local Extension (FLX) digital advertising platform, as well as the rollout of local news content on connected televisions and FAST channel distribution platforms, including Tubi’s linear streaming channels, in a number of markets.

 

 

Execute commercial priorities

  

 

•  FOX Sports and the Big Ten Network entered into a landmark 7-year media rights agreement with the Big Ten Conference.

 

•  The Company completed multi-year distribution and content licensing agreement renewals with key distribution partners.

 

•  The USFL returned for its second season and expanded into three additional markets (Detroit, Memphis and Canton).

 

•  FOX Sports achieved a favorable outcome in arbitration proceedings that decided claims FOX filed against Flutter Entertainment plc (“Flutter”). The arbitrator’s ruling confirmed that FOX Sports holds a 10-year call option that expires in December 2030 to acquire an 18.6% equity interest in Flutter’s majority-owned subsidiary FanDuel Group for $3.7 billion, plus an annual escalator of 5%. As of June 30, 2023, the option price is approximately $4 billion. FOX has no obligation to commit capital towards this opportunity unless and until it exercises the option.

 

 

Capital allocation

  

 

•  Increased annual dividend by $0.02 to $0.50 per share.

 

•  Returned approximately $2.3 billion of capital to our stockholders through the Company’s cash dividend and its stock repurchase program, including a $1 billion accelerated share repurchase transaction.

 

•  Maintained significant liquidity with approximately $4.3 billion of cash and cash equivalents on our balance sheet and approximately $7.2 billion in debt.

 

 

Corporate culture and furthering our commitment to our environmental, social and governance agenda

  

 

•  Our ESG commitments were recognized with an “A” rating from MSCI ESG Research and inclusion in the FTSE Russell’s FTSE4Good Index Series, which place the Company as a leader among its peers in terms of ESG rating scores.

 

•  Promoted inclusion and diversity through our approach to talent recruitment, development and retention; fostered employee career growth through increased enrollment in FOX leadership training programs and investment in our early career development and mentorship programs in order to build the pipeline of next generation of leaders; and grew the FOX Internship Program, welcoming over 475 students in calendar year 2022.

 

•  Recognized by workplace inclusion organizations, including:

 

•  DiversityComm once again recognized FOX as a Top Employer and as a Top LGBTQ+ Friendly Company for 2023.

 

 

 

   

 

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Qualitative Performance
Factor
   Fiscal 2023 Achievements
 

 

  

 

•  FOX was appointed to the Military Friendly® Employer list again for 2023 and named a Military Friendly® Brand; FOX also was rated a 4-Star Employer by VETS Indexes.

 

•  FOX was named to Disability Equality Index’s “Best Places to Work for Disability Inclusion” list for 2023, continuing year-over-year recognition as a top scoring employer.

 

•  Black EOE Journal, HISPANIC Network Magazine, Professional WOMAN’s Magazine and U.S. Veterans Magazine have all listed FOX as a 2023 top employer.

 

•  Invested in the communities we serve by supporting community groups, veteran service organizations, students, schools and families in need through volunteerism, partnerships, charitable gift matching and in-kind support to groups such as U.S.VETS and the American Red Cross.

 

•  Submitted our first response to the CDP Climate Change Questionnaire; began implementation of an environmental management system to better manage our environmental impacts at the FOX Studio Lot, and collaborated with the NFL during Super Bowl LVII and MLB throughout the 2022 MLB season to implement waste and energy reduction strategies; planted 10,000 trees and increased environmental awareness through our partnership with One Tree Planted and employee campaigns.

 

•  Published our second annual Political Activities Report.

 

•  Our Corporate Social Responsibility Report highlights these achievements, our investment in human capital resources, inclusion and diversity and more. Additionally, our Employment Information Report (EEO-1) highlights the diversity of our workforce. Both reports are published on our website.

 

In order to determine the extent to which the qualitative portion of the Annual Incentive Compensation was achieved, the Compensation Committee evaluated both the level of achievement in relation to the qualitative performance goals established at the start of the fiscal year as well as other factors that emerged over the course of the fiscal year that impacted the Company’s performance. In addition, the Compensation Committee determined that each of our named executive officers contributed equally to the performance described above, and therefore the extent to which the qualitative performance was achieved was applied uniformly to each named executive officer’s Annual Incentive Compensation. The Compensation Committee determined that the above-described qualitative evaluation of the named executive officers, individually and as a group, did not fully satisfy qualitative performance objectives and therefore awarded 62.5% of the target qualitative portion of the Annual Incentive Compensation to the named executive officers.

In light of the Compensation Committee’s consideration of these factors, the Compensation Committee confirmed the payout multiples set forth below and calculated the Annual Incentive Compensation, which was paid in cash, as follows:

 

       
 

 

Quantitative Performance Qualitative Performance Total
Named Executive Officers 75% of
Target
Multiple Subtotal 25% of
Target
Multiple Subtotal

K. Rupert Murdoch

$

4,500,000

  78%  

$

3,510,000

$

1,500,000

  62.5%  

$

937,500

$

4,447,500

Lachlan K. Murdoch

$

4,500,000

  78%  

$

3,510,000

$

1,500,000

  62.5%  

$

937,500

$

4,447,500

John P. Nallen

$

2,250,000

  78%  

$

1,755,000

$

750,000

  62.5%  

$

468,750

$

2,223,750

Viet D. Dinh

$

2,250,000

  78%  

$

1,755,000

$

750,000

  62.5%  

$

468,750

$

2,223,750

Steven Tomsic

$

1,875,000

  78%  

$

1,462,500

$

625,000

  62.5%  

$

390,625

$

1,853,125

 

 

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Long-Term Equity-Based Incentive Awards

The Compensation Committee believes that granting long-term equity-based incentive awards to our named executive officers aligns their compensation with the long-term performance of the Company and thereby links the named executive officers’ interests directly to those of the Company’s long-term stockholders. The Company’s compensation design principles are to drive performance without encouraging unnecessary risk taking, support long-term growth for stockholders, and attract, retain and motivate top executive talent. Consequently, in August 2022, the Compensation Committee granted for fiscal 2023 a mix of long-term equity-based incentive awards focused on performance with the primary goal of enhancing alignment with the Company’s stockholders while also serving to reward performance and support retention. The mix of long-term equity-based incentive awards granted for fiscal 2023 is as follows:

 

 

Twenty-five percent (25%) of a named executive officer’s target long-term incentive award was granted as performance-based stock options with a three-year performance period (the “PSOs”). PSOs granted to our named executive officers will vest at the end of the three-year performance period and have a term of seven years thereafter. PSOs granted to our named executive officers vest only if, at any point during the three-year performance period, the closing price of the Class A Common Stock exceeds the exercise price of the PSO by at least 15% for at least 30 consecutive calendar days (the “Stock Hurdle”). The performance period for the PSOs granted in August 2022 remains open and the Stock Hurdle is subject to achievement.

 

 

Twenty-five percent (25%) of a named executive officer’s target long-term incentive award was granted as performance-based restricted stock units (“PSUs”) with a three-year performance period. PSUs granted to our named executive officers will vest after three years based on achievement of targets for the following performance metrics:

 

  (a)

Average annual adjusted earnings per share (“EPS”) growth, weighted 15%;

 

  (b)

Average annual adjusted free cash flow (“FCF”) growth, weighted 15%; and

 

  (c)

The Company’s three-year total stockholder return as measured against the three-year total stockholder return of the companies that comprise the Standard & Poor’s 500 Index (“Relative TSR”), weighted 70%.

 

 

Fifty percent (50%) of a named executive officer’s target long-term incentive award was granted as time-vested restricted stock units (“RSUs”) that will vest in equal annual installments over a three-year period.

The Compensation Committee believes that allocating 50% of FOX’s long-term equity-based incentive awards as performance-based compensation appropriately aligns our named executive officers’ interests with those of FOX’s stockholders. For comparison, within the Peer Group, performance-based equity makes up an average of approximately 50% of regular annual long-term equity-based incentive grant value. Collectively, the Compensation Committee allocated 85% of the grant value of the performance-based portion of each named executive officer’s target long-term incentive award to the Stock Hurdle and Relative TSR (which we refer to collectively as the hurdled stock performance measures) and 15% of the grant value to Company financial performance. The Compensation Committee selected the hurdled stock performance measures to strengthen the alignment of interests between the named executive officers and our stockholders.

Company financial performance is measured through EPS and FCF. The Compensation Committee selected these metrics because it believes they support the Company’s long-term creation of stockholder value. EPS is one of the primary measures used by FOX’s investors and analysts to assess FOX’s and our management’s performance, and FCF gives a clear view of the Company’s ability to generate cash that can be used for investments in the business, returns to stockholders and other actions that enhance stockholder value. The Company adjusts EPS and FCF to ensure that the measurement of performance reflects factors that management can directly control and is not artificially inflated or diminished by factors unrelated to the ongoing operation of the business. This is intended to ensure that our named executive officers neither benefit from nor are penalized for unexpected or uncontrollable events or strategic decisions that are in the long-term interest of stockholders, but may have a negative or neutral effect on our named executive officers’ compensation and thus might drive decision-making that is not aligned with our stockholders’ interests.

For the fiscal 2023-2025 performance period, in August 2022 each of our named executive officers received long-term equity-based incentive awards in the following aggregate target amount:

 

   

Named Executive Officer

     Fiscal 2023-2025 Target Long-Term  
Incentive Award Opportunity
   

K. Rupert Murdoch

  

140% of Base Salary

   

Lachlan K. Murdoch

  

367% of Base Salary

   

John P. Nallen

  

250% of Base Salary

   

Viet D. Dinh

  

167% of Base Salary

   

Steven Tomsic

  

171% of Base Salary

 

 

   

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

The grant date for long-term equity-based incentive awards is the date on which the Compensation Committee approves awards under the 2019 Shareholder Alignment Plan, with the exercise price of stock options set as the volume-weighted average price of the Class A Common Stock on Nasdaq on the date of grant and the number of RSUs and PSUs underlying each award determined based on the 20-day trailing average of the closing price of the Class A Common Stock as of the last day of the fiscal year.

Vesting of Performance-Based Long-Term Equity-Based Incentive Awards for Fiscal 2021-2023 Performance Period

As previously disclosed in our proxy statement filed in connection with our 2020 Annual Meeting of Stockholders, in August 2020, the Compensation Committee granted long-term equity-based incentive awards that include PSUs (the “fiscal 2021 PSUs”) for the three-year performance period ended June 30, 2023 (the “fiscal 2021-2023” performance period). The fiscal 2021 PSUs vested based on the extent to which average annual adjusted EPS3 growth (15%), average annual adjusted FCF4 growth (15%), and the Company’s Relative TSR (70%) (collectively referred to as the “performance metrics”) were achieved over the fiscal 2021-2023 performance period.

In August and September 2020, the Compensation Committee established the following performance levels and weightings for the fiscal 2021 PSUs’ performance metrics:

 

     
  

 

  Fiscal 2021 – 2023 PSU Performance Metrics     

 

         

Performance Levels

   Adjusted EPS Growth    
(15% Weighting)   
   Adjusted FCF Growth    
(15% Weighting)   
  TSR (70% Weighting)   (a)   Payout as a % of   
 Target Opportunity    
         

Maximum

 

7%   

 

10%   

 

75th Percentile   

 

200%   

         

Target

 

1%   

 

5%   

 

  50th Percentile   

 

100%   

         

Threshold

 

-5%   

 

0%   

 

<25th Percentile   

 

0%   

 

(a)

TSR has a 50% payout at the 25th Percentile.

In August 2023, the Compensation Committee evaluated the average annual adjusted EPS growth, the average annual adjusted FCF growth and the Company’s three-year Relative TSR and approved the weighted payout of the three performance metrics (the “Final Performance Factor”) as set forth below.

 

       

Performance Metrics

  

Target   

 Performance    

  

Actual   

 Performance    

  

Weighted   

 Contribution    

       

Adjusted EPS Growth

  

1%

  

12.9%

  

30%

       

Adjusted FCF Growth

  

5%

  

0.3%

  

1%

       

Relative TSR

  

50th Percentile

  

30th Percentile

  

41%

       

Final Performance Factor

            

72%

 

3 

“Adjusted EPS” is calculated by dividing adjusted net income by the number of shares of stock (or stock equivalents) of the combined classes of the Company’s common stock used in the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2023 included in its Annual Report on Form 10-K (the “Financial Statements”) for the applicable fiscal year in determining diluted earnings per share, after adjusting for new share issuances and the effect of corporate reorganizations such as stock splits. Adjusted net income is determined by excluding net income effects of impairment and restructuring charges; adjustments to equity (losses) earnings of affiliates; other, net; and tax provision adjustments. The determination of Adjusted EPS may reflect such other adjustments that the Compensation Committee deems appropriate so that the measurement of performance against the performance metric is not distorted. The Compensation Committee did not make any such additional adjustments to Adjusted EPS in determining Adjusted EPS growth for the fiscal 2021-2023 performance period.

4 

“FCF” is calculated as net cash provided by operating activities as reported in the Financial Statements, less capital expenditures. Comparable adjustments made to net income as reported in the Financial Statements in connection with the determination of adjusted net income will be made to FCF to the extent such adjustments impact FCF. The determination of Adjusted FCF may reflect such other adjustments to FCF that the Compensation Committee deems appropriate so that the measurement of performance against the performance metric is not distorted. The Compensation Committee did not make any such additional adjustments to FCF in determining Adjusted FCF growth for the fiscal 2021-2023 performance period.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

The weighted contribution disclosed in the table above reflects the percentage of the aggregate fiscal 2021 PSU performance achievement, factoring in the extent to which the applicable performance metric was achieved and the weighting placed on the applicable performance metric by the Compensation Committee. Based on the Company’s performance, the Compensation Committee determined a Final Performance Factor of 72% of target. As a result, the fiscal 2021 PSUs vested at 72% of the sum of the target number of shares of Class A Common Stock originally granted under such award plus the amount of dividend equivalents accrued on the award during the performance period. The ultimate performance payout for the fiscal 2021 PSUs reflects the initial rigor associated with the performance goals established by the Compensation Committee. Our named executive officers received shares of Class A Common Stock in respect of the fiscal 2021 PSUs determined by multiplying the target number of fiscal 2021 PSUs awarded (including accrued dividend equivalents) by the Final Performance Factor as follows:

 

       

Named Executive Officers

Fiscal 2021
Target PSU Award

   Opportunity (# Shares)   

Final

    Performance    

Factor

Fiscal 2021

Final PSU Award

   Shares Earned (# Shares)(a)   

       

K. Rupert Murdoch

60,869 72% 45,676
       

Lachlan K. Murdoch

95,652 72% 71,777
       

John P. Nallen

43,478 72% 32,624
       

Viet D. Dinh

43,478 72% 32,624
       

Steven Tomsic

17,391 72% 13,049

 

(a)

The amount of shares earned with respect to the 2021 PSU Awards includes additional shares of Class A Common Stock that reflect dividend equivalents accrued and settled at the time the underlying PSUs vested.

Retirement Benefits

In conjunction with 21CF’s spin-off of FOX and the establishment of FOX as a standalone public company in March 2019 (the “Transaction”), the Company adopted and maintains certain legacy retirement benefits in which certain of our named executive officers participate. The Compensation Committee believes maintaining these legacy retirement benefits continues to serve as an important retention tool for long-tenure executives. For additional information on these arrangements, please see the “Pension Benefits as of June 30, 2023” table and the “Potential Payments Upon Termination” table, together with the accompanying footnotes, and the section titled “Description of Pension Benefits” in “Executive Compensation” below.

Perquisites

Our named executive officers are provided with limited types of perquisites and other personal benefits that the Compensation Committee determined are reasonable and consistent with the overall compensation philosophy. Perquisites constitute a very small percentage of each named executive officer’s total compensation package. The perquisites received by each named executive officer in fiscal 2023, as well as their incremental cost to the Company, are reported in the Summary Compensation Table and its accompanying footnotes below.

Some perquisites are generally intended to serve a specific business need for the benefit of the Company, including the safety and security of our named executive officers. Our named executive officers must adhere to a security plan developed with the assistance of a third-party consultant and assessed annually by our Compensation Committee based on the high visibility of our Company, the executives’ positions and work locations, and a review of the judgments and recommendations of internal and external security experts. The Compensation Committee, with guidance from our third-party security consultant, has determined that these security-related costs are necessary to reduce the risk to the Company associated with our named executive officers’ positions and affiliation with our business. In particular, a core aspect of our business involves broadcasting extensive news coverage of elections, sociopolitical events and public controversies and related opinion programming, which sometimes produces strong reactions from viewers and critics. In addition, the FOX brand may be subject to significant publicity related to the Company or its operations, content and individuals associated with its content, management, employees, business partners and culture, among others. Due to their tenure and prominence in our industry, certain of our named executive officers – particularly our Chair and our Executive Chair and Chief Executive Officer – are synonymous with the FOX brand and face enhanced personal risk from being viewed as extensions of the FOX brand. In light of the risk inherent in their roles and the potential adverse impact this risk could have on the Company, the Compensation Committee approved the security plan and associated costs and considers our named executive officers’ adherence to this plan within the best interests of the Company.

 

 

   

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Framework for Fiscal 2024 Long-Term Equity-Based Incentive Awards

 

In order to maintain our pay for performance principles, the Compensation Committee granted equity-based awards for fiscal 2024 in a form substantially consistent with those granted for fiscal 2023, as follows:

 

 

Twenty-five percent (25%) of a named executive officer’s target long-term incentive award was granted as PSOs with a three-year performance period. PSOs granted to our named executive officers will vest at the end of the three-year performance period and have a term of seven years thereafter. PSOs granted to our named executive officers vest only if, at any point during the three-year performance period, the closing price of the Class A Common Stock exceeds the exercise price of the PSO by at least 15% for at least 30 consecutive calendar days.

 

 

Twenty-five percent (25%) of a named executive officer’s target long-term incentive award was granted as PSUs with a three-year performance period. PSUs granted to our named executive officers will vest after three years based on achievement of targets for the following performance metrics:

 

  (a)

Average annual adjusted EPS growth, weighted 15%;

 

  (b)

Average annual adjusted FCF growth, weighted 15%; and

 

  (c)

The Company’s Relative TSR, weighted 70%.

 

 

Fifty percent (50%) of a named executive officer’s target long-term incentive award was awarded in time-vested RSUs that will vest in equal annual installments over a three-year period.

Collectively, the Compensation Committee allocated 85% of the grant value of the performance-based portion of each named executive officer’s fiscal 2024 target long-term incentive award to a hurdled stock performance metric and 15% of the grant value to Company financial projections. Consistent with prior PSUs granted to our named executive officers, the PSU and PSO performance metrics for the fiscal 2024 program are designed to align to stockholder value creation while maintaining 50% of the award as performance-based compensation. The Compensation Committee believes maintaining 50% of FOX’s long-term equity-based incentive awards as performance-based compensation for fiscal 2024 appropriately aligns our named executive officers’ interests with those of FOX’s stockholders and is broadly consistent with peer practice.

Employment Arrangements, Severance and Change in Control Arrangements

 

The Compensation Committee believes that employment agreements, which are broadly used in the media industry, are important tools to attract and retain executive talent. The Company and its subsidiaries maintain employment agreements with each of Messrs. L.K. Murdoch, Nallen, Dinh and Tomsic, the terms of which conclude on June 30, 2026 for Messrs. L.K. Murdoch and Tomsic and on June 30, 2025 for Messrs. Nallen and Dinh.

The employment agreements generally provide for base salary, target Annual Incentive Compensation and target grants of long-term incentive awards for each year of the term of the respective agreement. The employment agreements also provide for severance protection in the event of a termination of the executive’s employment during the term and bind the executives to restrictive covenants in favor of the Company. None of the named executive officers’ employment agreements or other arrangements contains provisions that guarantee a payment upon a change in control of the Company. The employment agreements and severance arrangements contained therein are further described below in the sections titled “Employment Arrangements” and “Potential Payments Upon Termination.”

Engagement with Stockholders and Compensation Committee’s Annual Review of its Compensation Practices

 

At the 2022 Annual Meeting of Stockholders, the Company’s stockholders voted to approve, on an advisory basis, the compensation of our named executive officers as described in the Company’s 2022 proxy statement. The Company’s 2022 executive compensation program received the support of 95% of the votes cast. Our Board and our Compensation Committee carefully considered the results of the 2022 say-on-pay vote and senior management engaged with every stockholder who accepted an invitation to speak with us.

During fiscal 2023, senior management actively and regularly engaged with our stockholders to offer them an opportunity to provide feedback regarding the Company’s performance. As part of this engagement, over 20 meetings were conducted with our largest stockholders who collectively held approximately 38% of the unaffiliated Class B Common Stock. Members of the Board, as well as members of senior management, participated in certain of these conversations. Senior management also participated in a number of meetings with individual and group investors at investor and industry conferences, including question-and-answer sessions. Our investor relations group separately responded to retail investor email and telephone inquiries, which also provided access to our representatives and a forum for providing feedback. Finally, senior management also engages with proponents of stockholder proposals as part of the Company’s annual proxy process.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

This continued effort allowed senior management and Board members to exchange perspectives and receive input from stockholders on a number of topics. The majority of investors commented positively on the opportunity to furnish input on the issues important to them and shared their appreciation for the work of our named executive officers and, in certain instances, our compensation program and its alignment with stockholders’ interests.

The Compensation Committee considered feedback from stockholders obtained in these meetings as part of its evaluation of the effectiveness of the Company’s compensation program, including the compensation program for our named executive officers, and whether the compensation program reflects the interests of various stakeholders, including stockholders and employees. The Compensation Committee also shared the feedback from these meetings with the Board.

The Compensation Committee will continue to consider feedback from and engage with stockholders and monitor trends and developments to ensure that the Company’s executive compensation programs remain competitively positioned for executive talent and aligned with the interests of various stakeholders, including stockholders and employees.

Recoupment of Previously Paid Named Executive Officer Performance-Based Compensation

 

The Board has adopted policies requiring the recoupment of performance-based compensation paid to the named executive officers in the event of certain financial restatements or of other bonus compensation in certain other instances. Specifically, if an executive is engaged in acts or omissions that are determined, by final judicial decision or order from which there is no further right to appeal, to involve intentional misconduct or a knowing violation of law or if an executive is engaged in harassment, discrimination or retaliation, including, but not limited to, the failure to respond to allegations or complaints of such behavior, the Compensation Committee has sole discretion to require reimbursement of all or any portion of performance-based compensation or discretionary bonus paid to the executive.

Prohibition on Hedging and Pledging of FOX Stock

 

The Company prohibits all Directors and employees, including our named executive officers (and their family members and controlled entities that are subject to its Insider Trading and Confidentiality Policy), from engaging in short sales of the Company’s securities and investing in Company-based derivative securities. In addition, the Company prohibits all Directors and employees, including our named executive officers, from pledging any Company securities that they hold directly, hedging any Company securities that they hold directly or indirectly (including through the purchase of financial instruments, such as prepaid variable forward contracts, equity swaps, collars, and exchange funds that hedge or offset, or are designed to hedge or offset, any decrease in the market value of FOX’s securities) or hedging or pledging equity compensation.

Executive Stock Ownership Guidelines

 

The Compensation Committee believes that the named executive officers of the Company should have an appropriate equity ownership in the Company to more closely align their economic interests with those of other Company stockholders. The Board has adopted stock ownership guidelines that require the named executive officers to own equity securities of the Company equal in value to at least a defined multiple of the executive’s base salary as follows:

 

   

Named Executive Officer

      Ownership Guideline      

   

K. Rupert Murdoch

    6 times base salary    

   

Lachlan K. Murdoch

6 times base salary

   

John P. Nallen

2 times base salary

   

Viet D. Dinh

2 times base salary

   

Steven Tomsic

2 times base salary

As of the end of fiscal 2023, each of our named executive officers has achieved the appropriate ownership level in accordance with the ownership guidelines. All fully owned shares held by the executive or direct family members, vested shares held in retirement and deferred compensation accounts, shares held by the executive or direct family members in trust, and all unvested restricted shares or time-based RSUs count for purposes of assessing an executive’s ownership level. No portion of unexercised options (such as the current “in the money” value) nor any portion of unearned performance awards count for purposes of assessing an executive’s ownership level under the ownership guidelines.

 

 

   

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Role of Compensation Consultant

 

The Compensation Committee has retained FW Cook to advise the Compensation Committee on its named executive officer and non-executive Director compensation practices and framework. For information on the Compensation Committee’s consideration of FW Cook’s independence, please see the section titled “Committees and Meetings of the Board of Directors – Compensation Committee.”

Compensation Deductibility Policy

 

Section 162(m) of the Internal Revenue Code generally prohibits executive compensation in excess of $1 million per year to be deducted by the Company as a compensation expense. The Compensation Committee has approved, and may continue to approve, compensation exceeding the $1 million limitation, including with respect to a portion of base salary, Annual Incentive Compensation and long-term incentives, in order to provide appropriate compensation. While accounting and tax treatment are relevant issues to consider, the Compensation Committee believes that stockholder interests are best served by not restricting flexibility in designing compensation programs, even though such programs may result in nondeductible compensation expenses for tax purposes.

 

 

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and discussed it with the Company’s management. Based on the Compensation Committee’s review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for fiscal 2023 and this proxy statement.

THE COMPENSATION COMMITTEE:

Jacques Nasser (Chair)

Chase Carey

Anne Dias

Paul D. Ryan

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 2023, the Compensation Committee consisted of the following non-executive Directors: Jacques Nasser (Chair), Chase Carey, Anne Dias and Paul D. Ryan, all of whom the Board has determined are independent in accordance with Nasdaq listing rules. There are no interlocking relationships as defined in the applicable SEC rules.

RISKS RELATED TO COMPENSATION POLICIES AND PRACTICES

The Compensation Committee has been delegated the authority to oversee the risk assessment of the Company’s compensation policies and practices. At the direction of the Compensation Committee, members of senior management conducted the risk assessment. Such members gathered and reviewed information regarding pay practices and risk-mitigation factors within the Company’s principal business units and its corporate division. Following an analysis of the data with the Compensation Committee, the Compensation Committee does not believe there are any risks from the Company’s compensation policies and practices for its employees that are reasonably likely to have a material adverse effect on the Company. In addition, the Company’s compensation programs include sufficient risk mitigation features, such as Compensation Committee and senior management discretion and oversight, a balance of annual and long-term incentives for senior executives, the use of multiple performance metrics which are generally set at the beginning of the performance period, award opportunities that are fixed or capped, and recoupment provisions for named executive officers’ performance-based and other bonus compensation in the event of certain financial restatements or certain other instances. Specifically, if an executive is engaged in acts or omissions that are determined, by final judicial decision or order from which there is no further right to appeal, to involve intentional misconduct or a knowing violation of law or if an executive is engaged in harassment, discrimination or retaliation, including, but not limited to, the failure to respond to allegations or complaints of such behavior, then the Compensation Committee has sole discretion to require reimbursement of all or any portion of performance-based compensation paid to such executive. The Compensation Committee annually oversees an assessment of risk related to compensation policies and practices.

 

 

   

 

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EXECUTIVE COMPENSATION

The following section, and the tables that appear herein, sets forth information with respect to total compensation for the fiscal year ended June 30, 2023, and, with respect to the Summary Compensation Table below, the fiscal years ended June 30, 2022 and June 30, 2021, respectively, for the Company’s Chief Executive Officer, Chief Financial Officer and the other three most highly compensated executive officers of the Company (collectively, the “named executive officers”) who served in such capacity on June 30, 2023.

Summary Compensation Table for the Fiscal Year Ended June 30, 2023

 

The following table, and the accompanying footnotes, set forth information with respect to total compensation for the fiscal years ended June 30, 2023, June 30, 2022 and June 30, 2021, respectively, for our named executive officers who served in such capacity on June 30, 2023.

 

Name and
Principal
Position
    Fiscal  
  Year  
    Salary     Stock
Awards(b)
    Option
Awards(c)
    Non-Equity
Incentive Plan
Compensation
    Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(d)
    All Other
Compensation(e)
  Total  
                 

K. Rupert Murdoch

Chair

 

2023

 

$

5,000,000

 

 

 

 $5,834,521

 

 

 

$1,750,000

 

 

 

$ 4,447,500

 

 

 

$ 5,709,000

 

 

$  200,879

 

$

22,941,900

 

 

2022

 

$

5,000,000

 

 

 

 $5,225,715

 

 

 

 $1,750,000

 

 

 

$ 6,270,000

 

 

 

$        —

 

 

$  191,059

 

$

18,436,774

 

 

2021

 

$

3,750,000

(a) 

 

 

 $5,064,327

 

 

 

 $1,750,000

 

 

 

$10,500,000

 

 

 

$ 9,918,000

 

 

$  137,971

 

$

31,120,298

 

                 

Lachlan K. Murdoch

Executive Chair and Chief
Executive Officer

 

2023

 

$

3,000,000

 

 

 

 $9,168,582

 

 

 

 $2,750,000

 

 

 

$ 4,447,500

 

 

 

$   646,000

 

 

$1,765,820

 

$

21,777,902

 

 

2022

 

$

3,000,000

 

 

 

 $8,211,824

 

 

 

 $2,750,000

 

 

 

$ 6,270,000

 

 

 

$        —

 

 

$1,516,857

 

$

21,748,681

 

 

2021

 

$

2,250,000

(a) 

 

 

 $7,958,246

 

 

 

 $2,750,000

 

 

 

$10,500,000

 

 

 

$ 2,923,000

 

 

$1,294,153

 

$

27,675,399

 

                 

John P. Nallen

Chief Operating Officer

 

2023

 

$

2,000,000

 

 

 

 $4,167,486

 

 

 

 $1,250,000

 

 

 

$ 2,223,750

 

 

 

$   924,000

 

 

$  117,350

 

$

10,682,586

 

 

2022

 

$

2,000,000

 

 

 

 $3,732,621

 

 

 

 $1,250,000

 

 

 

$ 3,135,000

 

 

 

$        —

 

 

$  105,073

 

$

10,222,694

 

 

2021

 

$

1,500,000

(a) 

 

 

 $3,617,370

 

 

 

 $1,250,000

 

 

 

$ 5,250,000

 

 

 

$   787,000

 

 

$   46,544

 

$

12,450,914

 

                 

Viet D. Dinh

Chief Legal and Policy

Officer

 

2023

 

$

3,000,000

 

 

 

 $4,167,486

 

 

 

 $1,250,000

 

 

 

$ 2,223,750

 

 

 

$        —

 

 

$   99,955

 

$

10,741,191

 

 

2022

 

$

3,000,000

 

 

 

 $3,732,621

 

 

 

 $1,250,000

 

 

 

$ 3,135,000

 

 

 

$        —

 

 

$   71,848

 

$

11,189,469

 

 

2021

 

$

2,250,000

(a) 

 

 

 $3,617,370

 

 

 

 $1,250,000

 

 

 

$ 5,250,000

 

 

 

$        —

 

 

$   45,248

 

$

12,412,618

 

                 

Steven Tomsic

Chief Financial Officer

 

2023

 

$

1,750,000

 

 

 

 $2,500,493

 

 

 

 $   750,000

 

 

 

$ 1,853,125

 

 

 

$        —

 

 

$   26,461

 

$

6,880,079

 

 

2022

 

$

1,500,000

 

 

 

 $1,493,016

 

 

 

 $   500,000

 

 

 

$ 2,612,500

 

 

 

$        —

 

 

$   31,256

 

$

6,136,772

 

 

2021

 

$

1,125,000

(a) 

 

 

 $1,446,931

 

 

 

 $   500,000

 

 

 

$ 4,375,000

 

 

 

$        —

 

 

$   24,894

 

$

7,471,825

 

 

(a)

The amount reflects base salary earned in fiscal 2021 taking into consideration our named executive officers’ decision to voluntarily forgo 100% of their base salaries from May 1, 2020 until September 30, 2020 in response to the COVID-19 pandemic.

 

(b)

This amount represents the aggregate grant date fair value of stock awards granted during the applicable fiscal year, assuming target performance for all PSUs. Assuming the maximum level of performance, the grant date fair value for the fiscal 2023 PSUs would be $4,547,830 for Mr. K.R. Murdoch; $7,146,604 for Mr. L.K. Murdoch; $3,248,402 for Mr. Nallen, $3,248,402 for Mr. Dinh and $1,949,058 for Mr. Tomsic. The actual value, if any, that the named executive officers will realize for these awards is a function of the value of the underlying shares if and when these awards vest and the level of attainment of the applicable performance targets.

 

(c)

The amounts set forth in the Option Awards column represent the aggregate grant date fair value of option awards granted during the applicable fiscal year estimated on the date of grant using the Black-Scholes option-pricing model. For stock options granted in fiscal 2023, the option awards will vest only if, at any point during the fiscal 2023-2025 performance period, the closing price of the Class A Common Stock exceeds the exercise price of the option awards by at least 15% for at least 30 consecutive calendar days. For additional information about the assumptions used in these calculations, please see Note 12 “Equity-Based Compensation” to the audited consolidated financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC on August 11, 2023.

 

(d)

The values reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column are theoretical, as these amounts are calculated pursuant to SEC requirements and are based on a retirement assumption of age 60 or current age, if later, and other assumptions used in preparing the Company’s June 30, 2023 audited consolidated financial statements. The change in actuarial present value for each named executive officer’s accumulated pension benefits under the applicable Company pension plans from year to year as reported in the Summary Compensation Table is subject to interest rate volatility and may not represent, nor does it affect, the value that a named executive officer will actually accrue under the Company’s pension plans during any given fiscal year. The change in pension value in fiscal 2023 was primarily due to the accrual of an additional year of benefits and a change in the discount rate.

 

 

46 

 

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 2023 Proxy Statement

 

   

 

 

 


EXECUTIVE COMPENSATION

 

(e)

All Other Compensation paid in fiscal 2023 is calculated based on the incremental cost to the Company and is comprised of the following:

 

             
Perquisites   K. Rupert
Murdoch
    Lachlan K.
Murdoch
    John P.
Nallen
    Viet D.
Dinh
    Steven
Tomsic
     

 

 

Personal Use of Corporate Aircraft

 

$

114,335

 

 

$

188,175

 

 

$

58,394

 

 

$

81,373

 

 

$

7,879

 

 

 

 

Personal Use of Corporate Car/Car Allowance

 

$

25,140

 

 

$

14,400

 

 

$

23,175

 

 

$

 

 

$

 

 

Company Contributions to 401(k) Plan

 

$

13,200

 

 

$

13,200

 

 

$

13,200

 

 

$

13,200

 

 

$

13,200

 

 

Life Insurance Premiums(1)

 

$

48,204

 

 

$

5,382

 

 

$

22,581

 

 

$

5,382

 

 

$

5,382

 

 

Residential Security

 

$

 

 

$

1,544,663

 

 

$

 

 

$

 

 

$

 

 

Total

 

$

200,879

 

 

$

1,765,820

 

 

$

117,350

 

 

$

99,955

 

 

$

26,461

 

 

 

  (1)

Represents imputed income to the named executive officers under the Company’s executive life insurance program.

Grants of Plan-Based Awards During the Fiscal Year Ended June 30, 2023

 

The following table sets forth information with respect to grants of plan-based awards to the named executive officers during fiscal 2023.

 

Name

 

 

Grant
Date

 

   

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards ($)

 

   

Estimated Future Payouts
Under Equity Incentive
Plan Awards (#)

 

   

All

Other
Stock
Awards:
Number
of Shares
of Stock
(#)

 

   

All
Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

 

   

Exercise
Price of
Option
Awards
($)(c)

 

   

Grant
Date Fair
Value of
Stock and
Option
Awards

 

 
 

Threshold

 

   

Target

 

   

Maximum

 

   

Threshold

 

   

Target

 

   

Maximum

 

 

 

K. Rupert Murdoch

         

$

2,250,000

 

 

$

6,000,000

 

 

$

12,000,000

 

                                                       
   

 

8/8/2022

 

                         

 

18,617

 

 

 

53,191

 

 

 

106,382

 

                         

$

2,273,915

 

   

 

8/8/2022

(a) 

                                                 

 

106,382

 

                 

$

3,560,606

 

   

 

8/8/2022

(b) 

                                                         

 

168,756

 

 

 

$33.50

 

 

$

1,750,000

 

 

Lachlan K. Murdoch

         

$

2,250,000

 

 

$

6,000,000

 

 

$

12,000,000

 

                                                       
   

 

8/8/2022

 

                         

 

29,255

 

 

 

83,586

 

 

 

167,173

 

                         

$

3,573,302

 

   

 

8/8/2022

(a) 

                                                 

 

167,173

 

                 

$

5,595,280

 

   

 

8/8/2022

(b)