DEF 14A 1 s001742x1_def14a.htm DEF 14A

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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 o

Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material under §240.14a-12


NEWS CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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Notice of Annual Meeting of Stockholders

Date and Time

November 15, 2017, 3:00 p.m. (Pacific Time)

Place

Darryl F. Zanuck Theatre at Fox Studios
10201 West Pico Boulevard
Los Angeles, California 90035

Record Date

September 18, 2017

YOUR VOTE IS IMPORTANT
Even if you plan to attend the Annual Meeting in person, we encourage you to vote in advance by:

visiting www.proxyvote.com (Common Stock) or www.investorvote.com.au (CDIs)

mailing your signed proxy card or voting instruction form

calling toll-free from the United States, U.S. territories and Canada to 1-800-690-6903 (Common Stock only)

Items to be Voted

elect the 11 Directors identified in the attached proxy statement to the Board of Directors (the “Board”) of News Corporation (the “Company”);
ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2018;
consider an advisory vote to approve executive compensation; and
consider any other business properly brought before the Annual Meeting and any adjournment or postponement thereof.

Eligibility to Vote

While all of the Company’s stockholders and all holders of CHESS Depositary Interests (“CDIs”) exchangeable for shares of the Company’s common stock are invited to attend the Annual Meeting, only stockholders of record of the Company’s Class B Common Stock and holders of CDIs exchangeable for shares of the Company’s Class B Common Stock at the close of business on September 18, 2017, the Record Date, are entitled to notice of, and to vote on the matters to be presented at, the Annual Meeting and any adjournment or postponement thereof. Holders of the Company’s Class A Common Stock and holders of CDIs exchangeable for shares of the Company’s Class A Common Stock are not entitled to vote on the matters to be presented at the Annual Meeting or any adjournment or postponement thereof.

By Order of the Board of Directors,


Michael L. Bunder
Corporate Secretary

October 3, 2017

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on November 15, 2017
The proxy statement and annual report for the fiscal year ended June 30, 2017 are available at www.proxyvote.com.

We are making the Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”), proxy statement and the form of proxy first available on or about October 3, 2017.

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Proxy Summary
 
1
 
Proposal No. 1: Election of Directors
 
5
 
Corporate Governance Matters
 
11
 
Corporate Governance Policies
 
11
 
Stockholder Engagement
 
12
 
Annual Director Elections and Majority-Voting Policy
 
12
 
Director Independence
 
12
 
Independent Oversight and Executive Sessions of Independent Directors
 
12
 
Board Leadership Structure
 
13
 
Board Committees
 
14
 
Director Attendance
 
16
 
Board’s Role in Strategy
 
16
 
Board Oversight of Risk
 
17
 
Related Person Transactions Policy
 
17
 
CEO Succession Planning
 
18
 
Annual Board and Committee Evaluations
 
18
 
Director Nomination Process
 
19
 
Stockholder Recommendation of Director Candidates
 
19
 
Communicating with the Board
 
19
 
Director Compensation
 
21
 
Stock Ownership Guidelines for Non-Executive Directors
 
23
 
Proposal No. 2: Ratification of Selection of Independent Registered Public Accounting Firm
 
24
 
Fees Paid to Independent Registered Public Accounting Firm
 
24
 
Audit Committee Pre-Approval Policies and Procedures
 
25
 
Report of the Audit Committee
 
26
 
Proposal No. 3: Advisory Vote to Approve Executive Compensation
 
28
 
Executive Officers of News Corporation
 
29
 
Compensation Discussion and Analysis
 
30
 
Executive Summary
 
30
 
Executive Compensation Practices
 
34
 
Named Executive Officer Compensation
 
35
 
Comparative Market Data and Industry Trends
 
42
 
Severance Arrangements
 
43
 
Stock Ownership Guidelines for Executive Officers
 
44
 
Clawback Policies
 
44
 
Prohibition on Hedging and Pledging of News Corporation Stock
 
44
 
Compensation Deductibility Policy
 
44
 
Report of the Compensation Committee
 
45
 
Compensation Committee Interlocks and Insider Participation
 
45
 
Risks Related to Compensation Policies and Practices
 
45
 
Executive Compensation
 
46
 
Summary Compensation Table
 
46
 
Grants of Plan-Based Awards Table
 
48
 
Employment Agreements
 
48
 
Outstanding Equity Awards Table
 
50
 
Option Exercises and Stock Vested Table
 
51
 
Pension Benefits Table
 
51
 
Nonqualified Deferred Compensation Table
 
52
 
Potential Payments upon Termination
 
53
 
Equity Compensation Plan Information
 
60
 
Security Ownership of News Corporation
 
61
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
63
 
Information about the Annual Meeting
 
64
 
2017 Proxy Materials
 
64
 
Voting Instructions and Information
 
65
 
Attending the Annual Meeting
 
68
 
2018 Annual Meeting of Stockholders
 
69
 
Other Matters
 
69
 
Appendix A: Map and Directions

 
 
 

The Company maintains a 52-53 week fiscal year ending on the Sunday nearest to June 30 in each year. Fiscal 2018, fiscal 2017, fiscal 2016 and fiscal 2015 will include or included 52, 52, 53 and 52 weeks, respectively. Unless otherwise noted, all references to the fiscal years ended June 30, 2018, June 30, 2017, June 30, 2016 and June 30, 2015 relate to the fiscal years ended July 1, 2018, July 2, 2017, July 3, 2016 and June 28, 2015, respectively. For convenience purposes, the Company continues to date its financial statements as of June 30.

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PROXY SUMMARY

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.

2017 Annual Meeting of Stockholders

Date and Time:
November 15, 2017 at 3:00 p.m. (Pacific Time)
Place:
Darryl F. Zanuck Theatre at Fox Studios
10201 West Pico Boulevard
Los Angeles, California 90035
Record Date:
September 18, 2017
Voting:
Holders of Class B Common Stock are entitled to vote by Internet at www.proxyvote.com; telephone at 1-800-690-6903; by completing and returning their proxy card or voting instruction form; or in person at the Annual Meeting
 
Holders of Class B CDIs are entitled to vote by Internet at www.investorvote.com.au; or by completing and returning their voting instruction form

Voting Matters

 
Page Number
Voting Standard
Board Vote Recommendation
Majority of votes cast
FOR each Director nominee
Majority of votes cast
FOR
Majority of votes cast
FOR

Corporate Governance Highlights

Commitment to Board refreshment. In April 2017, Kelly Ayotte was elected to the Board as an independent Director. The Board thanks John Elkann and Elaine L. Chao, who each stepped down from the Board in fiscal 2017, for their service.
Stockholder engagement efforts. The independent Directors view stockholder outreach as an area of priority and in fiscal 2017 directed the continuation of the Company’s engagement program, which includes a specific focus on corporate governance. Our fiscal 2017 outreach program included engagement with unaffiliated stockholders representing over 25% of the outstanding Class B Common Stock and over 50% of the outstanding Class A Common Stock. Our independent Lead Director and Nominating and Corporate Governance Committee Chair directly participated, in person or by telephone, in many of these engagements.
Strong independent Board leadership. In recognition of his leadership and skills, the independent Directors re-elected Peter L. Barnes as the independent Lead Director for an additional one-year term.
Transparency to stockholders. We include voluntary disclosures in our proxy statement on a number of topics, including stockholder engagement, the Board’s role in strategy and performance metrics used to determine executive compensation.
Continually updating key governance policies. Over the past year, our Board has amended the Statement of Corporate Governance and the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee charters to promote best corporate governance practices.

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PROXY SUMMARY



Corporate Governance Practices

Annual Election of All Directors
All Audit Committee Members are “Audit Committee Financial Experts”
Majority Vote Standard and Director Resignation Policy in Uncontested Director Elections
Compensation Committee Oversees Chief Executive Officer (“CEO”) Succession Planning Process
Independent Lead Director with Robust Responsibilities
Robust Anti-Corruption Compliance Program including Compliance Steering Committee overseen by the Audit Committee
Standing Board Committees Comprised Solely of Independent Directors
Active Stockholder Engagement Program with Unaffiliated Class A and Class B Stockholders
Executive Sessions of Independent Directors Held at Every Regular Board Meeting
Comprehensive Standards of Business Conduct and Statement of Corporate Governance
Annual Board and Committee Self-Evaluations
Commitment to Corporate and Board Diversity
Risk Oversight by the Board and Committees
 
 

Board Nominees


(a) For more details on the Board’s leadership structure, including the role and responsibilities of the independent Lead Director, see “Corporate Governance Matters—Board Leadership Structure” beginning on page 13.

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PROXY SUMMARY



Board Nominee Diversity



Fiscal 2017 Business Highlights

The Company reported fiscal 2017 total revenues of $8.14 billion, a decrease of 2% over the prior year.
Loss from continuing operations was $643 million compared to income from continuing operations of $235 million in the prior year. The loss includes approximately $1 billion of pre-tax non-cash impairments and write-downs, primarily related to the write-down of fixed assets at the U.K. and Australian newspapers and the Company's investment in Foxtel.
The Company reported fiscal 2017 Total Segment EBITDA* of $885 million, as compared to $684 million in the prior year; fiscal 2016 included a one-time charge of $280 million related to the settlement of litigation at the Company’s News America Marketing division and a one-time gain of $122 million for the settlement of litigation at Move, Inc. (“Move”), in which the Company owns an 80% interest.
The Company reported fiscal 2017 net cash provided by continuing operating activities of $499 million.
In September 2016, the Company acquired Wireless Group plc (“Wireless Group”), which operates talkSPORT, the leading sports radio network in the U.K., and a portfolio of radio stations in the U.K. and Ireland.
* Total Segment EBITDA is a non-GAAP financial measure. For information on Total Segment EBITDA, as defined by the Company, please see pages 49-50 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2017 filed with the Securities and Exchange Commission (the “SEC”) on August 14, 2017.

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PROXY SUMMARY



Executive Compensation Highlights

Increasing “at-risk” compensation. For fiscal 2017, the performance-based portion of total direct compensation increased for our CEO, former Chief Financial Officer (“CFO”) and General Counsel.
Demonstrating alignment of pay with performance. Based on Company results relative to applicable performance metrics, the fiscal 2017 annual cash incentive awards paid out at 100% of target, and the fiscal 2015-2017 performance stock units (“PSUs”) paid out at 61.4% of target.
Updated compensation peer group. The Compensation Committee adopted a modified peer group to better reflect the Company’s competitive landscape for fiscal 2018.

Executive Compensation Governance Practices

We Pay for Performance
We Seek to Mitigate Compensation-Related Risk
A significant portion of our named executive officers’ (“NEOs”) fiscal 2017 total direct compensation is “at-risk”:
80% for the Executive Chairman
82% for the CEO
76% for the former CFO
62% for the General Counsel
Annual compensation risk assessment
Clawback policy for NEOs covering both cash and equity compensation
Anti-hedging and anti-pledging policy applicable to all executive officers and Directors
100% of equity compensation and 66.7% of annual cash incentive compensation is tied to performance against pre-established, specific, measurable financial performance goals
Rigorous stock ownership guidelines for the CEO, CFO, General Counsel and Non-Executive Directors (as defined herein)
No guaranteed bonuses
No “single trigger” cash severance or automatic vesting of equity awards based solely upon a change in control of the Company
Performance on ethics and compliance objectives impacts payout of discretionary portion of annual cash incentive awards

For additional information, see the “Compensation Discussion and Analysis,” which begins on page 30, and the Summary Compensation Table and other related tables and disclosure in “Executive Compensation,” which begins on page 46.

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our Board has nominated 11 Directors for election at this Annual Meeting to hold office until the next annual meeting or until their successors are duly elected and qualified. If, for any reason, any of the Director nominees become unavailable for election, the Directors may reduce the size of the Board or the proxy holders (as defined herein), to the extent permitted under SEC rules, will 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 nominees. The ages shown are as of October 3, 2017. Each of the Director nominees has indicated that he or she will be able to serve if elected and has agreed to do so.

Elaine L. Chao resigned from the Board effective January 31, 2017. The Board thanks Ms. Chao for her service and contributions. Effective April 1, 2017, the Board appointed Kelly Ayotte as an independent Director. Ms. Ayotte was recommended for consideration by the Nominating and Corporate Governance Committee by an independent Director. The Board is focused on Board succession planning and is currently conducting a search process, which includes engagement of an independent search firm, to identify an additional independent Director to join the Board.


K. Rupert Murdoch AC, age 86
Executive Chairman
   
Director since: June 2013
   
Other Current Reporting Company Directorships: 21st Century Fox (1979-present)
K. Rupert Murdoch has served as the Company’s Executive Chairman since December 2012. He has been Executive Chairman of the Company’s former parent, Twenty-First Century Fox, Inc. (formerly named News Corporation) (“21st Century Fox”), a diversified global media and entertainment company, since July 2015, after serving as its Chief Executive Officer from 1979 to July 2015 and its Chairman since 1991. Since July 2016, he has served as Chairman and acting Chief Executive Officer of 21st Century Fox subsidiaries Fox News Channel and Fox Business Network. Mr. K.R. Murdoch is the father of Messrs. J.R. Murdoch and L.K. Murdoch.
Mr. K.R. Murdoch has been the driving force behind the evolution of the Company and 21st Century Fox from the single, family-owned Australian newspaper he took over in 1953 to the global public media companies they are today. Mr. K.R. Murdoch brings to the Board invaluable knowledge and expertise regarding the Company’s businesses and provides strong operational leadership and broad strategic vision for the Company’s future.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS




Lachlan K. Murdoch, age 46
Co-Chairman
   
Director since: June 2013
   
Other Current Reporting Company Directorships: 21st Century Fox (1996-present)
Lachlan K. Murdoch has been a Director of the Company since June 2013 and has been Co-Chairman since March 2014. Since 1996, he has served as a Director of 21st Century Fox, serving as its Co-Chairman since March 2014 and as its Executive Chairman since July 2015. He has served as Executive Chairman of Nova Entertainment, an Australian media company, since 2009. Mr. L.K. Murdoch has served as the Executive Chairman of Illyria Pty Ltd, a private company, since 2005. Mr. L.K. Murdoch served as a Director of Ten Network Holdings Limited, an Australian media company, from December 2010 to March 2014 and as its Non-Executive Chairman from February 2012 to March 2014, after serving as its Acting Chief Executive Officer from February 2011 to January 2012. Mr. L.K. Murdoch served as an advisor to 21st Century Fox from 2005 to 2007, and served as its Deputy Chief Operating Officer from 2000 to 2005. Mr. L.K. Murdoch is the son of Mr. K.R. Murdoch and the brother of Mr. J.R. Murdoch.
Mr. L.K. Murdoch brings a wealth of knowledge regarding the Company’s operations and the media industry, as well as management and strategic skills, to the Board. Mr. L.K. Murdoch has extensive experience serving in several senior leadership positions within 21st Century Fox, including currently as Executive Chairman, and at various operating units within the Company, in particular as head of News Limited (now known as News Corp Australia) and the New York Post.

Robert J. Thomson, age 56
Chief Executive
   
Director since: June 2013
   
   
 
 
Robert J. Thomson has served as the Company’s Chief Executive since January 2013. He served as Editor-in-Chief of Dow Jones and Managing Editor of The Wall Street Journal from 2008 to 2012. Mr. Thomson previously served as Publisher of Dow Jones from 2007 to 2008, after serving as Editor of The Times of London from 2002 to 2007. Prior to that role, he was Managing Editor of the U.S. edition of the Financial Times.
Through his position as the Company’s Chief Executive, Mr. Thomson has an intimate knowledge of the Company’s operations. Mr. Thomson has extensive business, operational and international experience in the publishing industry through his career as a financial journalist, foreign correspondent and editor. Under his management and leadership, The Wall Street Journal was consistently one of the most innovative and successful newspapers in the U.S. and also greatly expanded its global reach through the digital initiatives of WSJ.com. As Managing Editor of the U.S. edition of the Financial Times, Mr. Thomson led its drive into the U.S. market, where sales trebled during his tenure. His keen understanding of the evolving U.S. and international markets in which the Company operates and his commitment to generating high quality content make him a valuable resource for the Board.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS




Kelly Ayotte, age 49
Director since: April 2017
   
Committees: Nominating and Corporate Governance
   
Other Current Reporting Company Directorships: Caterpillar Inc. (2017-present)
Kelly Ayotte served as a United States Senator for the State of New Hampshire from 2011 to 2017. While in the Senate, she served on the Armed Services, Budget, Commerce, Homeland Security and Governmental Affairs, and Small Business and Entrepreneurship Committees. Prior to her election to the Senate, Senator Ayotte served as the chief of New Hampshire's Homicide Unit and Deputy Attorney General of New Hampshire before being named New Hampshire's first female Attorney General, in which role she served from 2004 until 2009. Ms. Ayotte joined the Board of Directors of Caterpillar Inc. in August 2017. She has also served since 2017 as a Senior Advisor to Blink Health LLC, a technology platform for prescription drugs, on the Advisory Council for Microsoft Corporation and on the Board of Directors for BAE Systems, Inc., a defense contractor.
Ms. Ayotte brings to the Board strong leadership and strategic planning skills as well as in-depth knowledge in the areas of public policy, government and law. She offers valuable insights on private sector innovation from her service on the Senate Commerce Committee, including on its Subcommittee on Communications, Technology, Innovation and the Internet, as well as financial experience from her service on the Senate Budget Committee.

José María Aznar, age 64
Director since: June 2013
   
Committees: Nominating and Corporate Governance (Chair)
José María Aznar has served as the President of the Foundation for Social Studies and Analysis, a political research and educational organization focused on Spain, since 1989. Mr. Aznar has served as President of the Honorary Board of the Bussola Institute since May 2017 and on the Board of Directors of Afiniti, a developer of artificial intelligence systems, since 2016. Mr. Aznar has been a senior advisor to the Global Board of DLA Piper LLP since 2015 and a member of the International Advisory Board of Barrick Gold Corporation since 2011. From 2011 until 2015, Mr. Aznar was a Distinguished Fellow at the Johns Hopkins University Paul H. Nitze School of Advanced International Studies, where he was also Chairman of the Atlantic Basin Initiative. He was previously a Distinguished Scholar at the Edmund A. Walsh School of Georgetown University from 2004 to 2011. Mr. Aznar served as the Executive President of the Partido Popular of Spain from 1990 to 2004, and as its Honorific President from 2004 to 2016. Mr. Aznar was a member of The State Council of Spain from 2005 to 2006 and served as the President of Spain from 1996 to 2004. Mr. Aznar served as a Director of 21st Century Fox from 2006 until June 2013.
Mr. Aznar, with his extensive experience, including serving as President of Spain, brings knowledge, expertise and an international perspective to the Board, providing valuable insight into political and governmental matters throughout the world. He has a unique and deep knowledge with respect to several countries in which the Company operates.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS




Natalie Bancroft, age 37
Director since: June 2013
   
Committees: Compensation; Nominating and Corporate Governance
Natalie Bancroft is a professionally trained opera singer, has studied journalism and is a graduate of L’Institut de Ribaupierre in Lausanne, Switzerland. Since 2016, Ms. Bancroft has served as Director of the Pacific Art Society, a non-profit performing arts company. Since 2017, Ms. Bancroft has served on the board of the Wine Country Music Awards. Ms. Bancroft has a culturally diverse background, having lived across Europe, and speaks several languages fluently. Ms. Bancroft served as a Director of 21st Century Fox from 2007 until June 2013.
Ms. Bancroft brings public company board and committee experience to the Board gained from her service as a current Director and member of both the Company’s Compensation and Nominating and Corporate Governance Committees, and as a former Director of 21st Century Fox and member of its Nominating and Corporate Governance Committee. Ms. Bancroft’s public company board and committee service and international experience add valuable perspective to the deliberations of the Board.

Peter L. Barnes, age 74
Lead Director
   
Director since: June 2013
   
Committees: Audit (Chair); Compensation
Peter L. Barnes has been the Lead Director of the Company since June 2013. Mr. Barnes was a Director of Metcash Limited, a wholesale distribution and marketing company, from 2005 until August 2015, having served as its Chairman since 2010 and as a Director of its predecessor from 1999 to 2005. Mr. Barnes was also formerly a Director of Ansell Limited from 2001 to 2012, having served as its Chairman from 2005 to 2012. Mr. Barnes served in various senior management positions in the United States, the United Kingdom and Asia at Philip Morris International Inc. from 1971 to 1998, including as President of Philip Morris Asia Inc. Mr. Barnes served as a Director of 21st Century Fox from 2004 until June 2013.
Mr. Barnes brings to the Board the leadership, operational and financial skills gained in his several roles at Philip Morris, as well as through his service as a Director at a number of private and public companies, including his service as Chairman of several of these companies.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS




Joel I. Klein, age 70
Director since: June 2013
   
Other Current Reporting Company Directorships: Boston Properties, Inc.
(2013-present)
 
Joel I. Klein has served as the Chief Policy and Strategy Officer of Oscar Insurance Corporation, a health insurance company with a focus on technology, since January 2016. Mr. Klein served as Chief Executive Officer of Amplify, a digital education business formerly owned by the Company, from 2011 until the Company’s sale of Amplify in September 2015, and as an Executive Vice President, Office of the Chairman of the Company from June 2013 until December 2015. Mr. Klein previously served as a Director and Executive Vice President of 21st Century Fox from 2011 until June 2013. He was the Chancellor of the New York City public school system from 2002 through 2010. He was the U.S. Chairman and Chief Executive Officer of Bertelsmann, Inc. and Chief U.S. Liaison Officer to Bertelsmann AG from 2001 to 2002. Mr. Klein also served with the Clinton administration in a number of roles, including Deputy White House Counsel from 1993 to 1995. Mr. Klein also serves on the Board of Boston Properties, Inc., where he is the lead independent director.
Mr. Klein contributes deep knowledge of the Company and its businesses gained through his roles at News Corporation and 21st Century Fox. Mr. Klein brings to the Board strong leadership skills gained from his decades of service in senior executive roles in the private and public sectors, as well as legal expertise.

James R. Murdoch, age 44
Director since: June 2013
   
Other Current Reporting Company Directorships: 21st Century Fox (2007-present); Tesla, Inc. (2017-present)
 
James R. Murdoch has been the Chief Executive Officer of 21st Century Fox since July 2015, after serving as its Co-Chief Operating Officer from March 2014 to July 2015. He previously served as the Deputy Chief Operating Officer and Chairman and Chief Executive Officer, International of 21st Century Fox from 2011 to 2014, after serving as 21st Century Fox’s Chairman and Chief Executive, Europe and Asia beginning in 2007. Since April 2016, Mr. J.R. Murdoch has served as Chairman of Sky plc (formerly British Sky Broadcasting Group), a pan-European digital television provider in which 21st Century Fox holds an approximate 39% interest, where he has served as a Director since 2003, as Chief Executive Officer from 2003 to 2007 and as Chairman from 2007 to 2012. Mr. J.R. Murdoch was the Chairman and Chief Executive Officer of STAR Group Limited, a subsidiary of 21st Century Fox, from 2000 to 2003. Mr. J.R. Murdoch previously served as an Executive Vice President of 21st Century Fox, and served as a member of the Board from 2000 to 2003. He has served as a Director of Tesla, Inc. since July 2017. Mr. J.R. Murdoch was formerly a Director of GlaxoSmithKline plc from 2009 to 2012 and Sotheby’s from 2010 to 2012. Mr. J.R. Murdoch is the son of Mr. K.R. Murdoch and the brother of Mr. L.K. Murdoch.
Mr. J.R. Murdoch brings to the Board deep expertise from having served in a number of leadership positions within 21st Century Fox and at its affiliates over the past two decades, culminating in his appointment as Chief Executive Officer in 2015. His broad-based experience, extensive knowledge of international markets, unique understanding of emerging technologies and strategic perspective of the Company’s business and operations enable him to be a valuable resource for the Board.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS




Ana Paula Pessoa, age 50
Director since: June 2013
   
Committees: Audit
   
 
Ana Paula Pessoa has been a partner and chair of Kunumi Inteligencia Artificial SA, an artificial intelligence company in Brazil, since April 2017. She previously served as the Chief Financial Officer of the 2016 Olympic and Paralympic Summer Games in Rio de Janeiro from 2015 to March 2017 and as a Partner at Brunswick Group, an international corporate communications firm, from 2012 to 2015. She is also the founder of Avanti SC, a strategic planning consulting firm, where she has served as a consultant since 2000, and was a founding Partner of Black-Key Participações SA, which invests in digital start-up companies in Brazil, before selling her position in March 2015, and an investor and a partner of Neemu.com, an e-commerce technology firm, before selling her position in August 2015. Ms. Pessoa previously served in numerous roles during her 18-year career at the Globo Organizations (“Globo”), a media group in South America, most recently as the Chief Financial Officer from 2001 to 2011 and New Business Director from 2008 to 2011 of Infoglobo, the newspaper, Internet and information services business of Globo. She also served as a Director of Globo’s subsidiaries including Valor Economico, a financial newspaper in Brazil, and Zap Internet, an online classified service in Brazil, from 2001 to 2011 and as a Director of SPIX Macaw Internet SA, an online news distribution start-up company, from 2009 to 2011. Ms. Pessoa currently serves on the Board of Directors of Vinci S.A., a French infrastructure company, and is a member of the Strategy and Investments Committee. She also serves as a member of the Audit Committee of Fundação Roberto Marinho and as a member of the advisory board of The Nature Conservancy Brasil, and was a Director of Bonera Participações S.A., an internet start-up holding company, from 2012 to 2016 and a member of the Rio de Janeiro City Council from 2013 to 2016.
Ms. Pessoa brings to the Board strong strategic leadership, business development and financial skills, including from her roles with the Olympic Games, at Brunswick and at Avanti. She contributes digital expertise developed in her roles with Black-Key Participações, Neemu.com and Bonera Participações. During her tenure at Globo, Ms. Pessoa gained extensive experience in its newspaper, Internet, cable and satellite television and telecom operations. Along with this expertise, she brings to the Board strong business development and financial skills.

Masroor Siddiqui, age 45
Director since: June 2013
   
Committees: Audit; Compensation (Chair)
   
 
Masroor Siddiqui is the Chief Executive Officer of Naya Capital Management UK Limited (formerly Naya Management LLP), an investment firm he co-founded in May 2012. He was previously a Partner at The Children’s Investment Fund Management (UK) LLP, a hedge fund, from 2009 to 2011 and a Managing Director at Canyon Partners, an investment firm, from 2006 to 2009. Mr. Siddiqui previously served as a Senior Vice President at Putnam Investments, where he was responsible for a broad range of investments.
Mr. Siddiqui has significant experience in investing with a focus on media investments. He offers the Board valuable insights on global markets and industries relevant to the Company’s businesses.
FOR
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.

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CORPORATE GOVERNANCE MATTERS

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

Board Composition and Practices
Majority of independent Directors
Independent Lead Director with robust responsibilities
Executive sessions of independent Directors held at every regular Board meeting
Annual Board and committee self-evaluations
Board Committees
Standing Board Committees comprised solely of independent Directors
Committees authorized to retain independent advisors
All Audit Committee members are “audit committee financial experts”
Compensation Committee oversees CEO succession planning process
Stockholder Rights and Engagement
Annual election of all Directors
 
Majority vote standard and Director resignation policy in uncontested Director elections
Annual stockholder advisory vote to approve executive compensation
Active stockholder engagement program with our unaffiliated Class A and Class B stockholders
Risk and Compliance Oversight
Board oversees management’s identification and management of risk
 
Involvement at both full Board and individual committee level
Audit Committee assists the Board in its oversight of the Anti-Corruption Compliance Program and the activities of the Company’s Compliance Steering Committee
Equity and Compensation
Stock ownership guidelines for the CEO, CFO, General Counsel and Non-Executive Directors
Prohibitions on hedging and pledging Company stock by executive officers and Directors
Clawback policy for executive officers covering both cash and equity compensation

Corporate Governance Policies

The Board has adopted a Statement of Corporate Governance that sets forth the Company’s corporate governance guidelines and practices. The Statement of Corporate Governance addresses, among other things, the composition and functions of the Board and its committees, Director independence, Board membership criteria, Director compensation and equity ownership requirements and management evaluation and succession.

The Board has also adopted the Standards of Business Conduct, which are applicable to all Directors, officers and employees of the Company.

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. To promote further ethical and responsible decision-making, the Board has established the Code of Ethics for the Chief Executive Officer and Senior Financial Officers (the “Code of Ethics”).

The Statement of Corporate Governance, the Standards of Business Conduct, the Code of Ethics and each of the Board committee charters are available on the Company’s website at

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newscorp.com under “About Us—Corporate Governance” and in print to any stockholder who requests them from the Corporate Secretary at our principal executive offices: News Corporation, 1211 Avenue of the Americas, New York, New York 10036. If

the Company amends or waives the Standards of Business Conduct or the Code of Ethics with respect to an executive officer or Director, it will post the amendment or waiver at the same location on its website.

Stockholder Engagement

The Board believes that continual and transparent communication with our stockholders is a key component of strong corporate governance. The independent Directors view stockholder outreach as an area of priority and in fiscal 2017 directed the continuation of the Company’s engagement program, which includes a specific focus on corporate governance. Our fiscal 2017 outreach program included engagement with unaffiliated stockholders representing over 25% of the outstanding Class B Common Stock and over 50% of the outstanding Class A Common Stock. Our independent Lead Director and Nominating and Corporate Governance

Committee Chair directly participated, in person or by telephone, in many of these engagements. The Board strongly values the feedback our stockholders have provided on a wide range of topics including Board oversight of our business strategy, capital allocation, corporate governance, Board composition, management succession planning, executive compensation, sustainability and the Company’s financial and operating performance. This input is shared with the Board and its relevant committees and informs the Company’s strategy and policies as we seek to build long-term value for our stockholders.

Annual Director Elections and Majority-Voting Policy

All Directors are elected annually by our stockholders. In an uncontested election, each Director must be elected by a majority of the votes cast, meaning that the number of votes cast “FOR” a Director’s election must exceed the number of votes cast “AGAINST” that Director’s election. In a contested election, each Director will be elected by a plurality of votes cast. Under the Company’s Amended and Restated By-laws (the “By-laws”), an

incumbent Director who does not receive a majority of votes cast in an uncontested election must submit his or her resignation to the Board within 10 days. Within 90 days of the date of the certification of the election results, the Board will determine, considering all factors it deems relevant (including those set forth in our Statement of Corporate Governance), whether to accept the resignation.

Director Independence

Our Statement of Corporate Governance requires that the Board be comprised of a majority of “independent directors” in accordance with the listing rules of the NASDAQ Stock Market (“NASDAQ”). The Board, upon the recommendation of the Nominating and Corporate Governance Committee, will review and determine the independence of each Director at least annually and at other times as appropriate. The Board considers all relevant facts and circumstances in making an independence determination as to each Director, including but not limited to any relationships and transactions between the Director (and his or her

immediate family members and affiliated entities) and the Company and its affiliates.

As a result of its review, the Board affirmatively determined that Mmes. Ayotte, Bancroft and Pessoa and Messrs. Aznar, Barnes and Siddiqui are independent under the standards adopted by the Company and set forth in the NASDAQ listing rules. The Board also determined that Elaine L. Chao and John Elkann, who each served on the Board during fiscal 2017, were independent during the time they each served on the Board.

Independent Oversight and Executive Sessions of Independent Directors

The Board believes its independent oversight function is further enhanced by our Audit, Compensation and Nominating and Corporate Governance Committees being comprised entirely of independent Directors.

In addition, the independent Directors of the Board generally meet in executive session without management present at every regularly scheduled Board meeting. During fiscal 2017, the independent Directors met in executive session at all five Board meetings.

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Board Leadership Structure

Executive Chairman: K. Rupert Murdoch
Co-Chairman: Lachlan K. Murdoch
Independent Lead Director: Peter L. Barnes
Chief Executive: Robert J. Thomson

Mr. K.R. Murdoch serves as the Executive Chairman of the Board, while Mr. Thomson serves as the Chief Executive and a Director. Both Mr. K.R. Murdoch and Mr. Thomson are considered executive officers of the Company. Our Statement of Corporate Governance provides that 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 does not have a policy on whether the Chairman of the Board shall be an independent member of the Board. However, if the Chairman is not an independent Director, an independent Director shall be designated by a majority of the independent Directors of the Board to serve as Lead Director for a period of at least one year. Mr. Barnes, an

independent Director, currently serves as our Lead Director. The remaining Directors include Mr. L.K. Murdoch, our Co-Chairman, and seven other Directors (five of whom are independent). A majority of the Directors are independent.

The Board believes our current leadership structure is effective and serves the best interests of our stockholders at this time. The Board believes that this structure allows our Chief Executive to focus on his duties in managing the day-to-day operations of the Company, while benefiting from Mr. K.R. Murdoch’s and Mr. L.K. Murdoch’s invaluable knowledge and expertise regarding the Company’s businesses. In addition, the Board believes that the role of the Lead Director is structured with sufficient authority to serve as a counter-balance to management.

Lead Director Duties and Responsibilities
presiding over all meetings of the Board at which the Executive Chairman and Co-Chairman are not present, including executive sessions of the Non-Executive Directors and the independent Directors
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 CEO
communicating to the Chairman feedback from executive sessions as appropriate
supervising the self-evaluations of the Directors in coordination with the Nominating and Corporate Governance Committee
serving as liaison between the Chairman and the independent Directors
meeting with the Audit Committee and/or the Compliance Steering Committee periodically
supervising the Board’s determination of the independence of its Directors

approving Board meeting agendas and information sent to the Board

ensuring his or her availability for consultation and direct communications, if requested by major stockholders
approving meeting schedules to assure that there is sufficient time for discussion of all agenda items
 
 

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Peter L. Barnes has served as Lead Director since June 2013. In recognition of his strong leadership and skills, the independent members of the Board re-elected Mr. Barnes as Lead Director in August 2017 for a term of one year. In fiscal 2017, Mr. Barnes performed duties beyond the required duties set forth above, which included:

attending meetings of the Nominating and Corporate Governance Committee, of which Mr. Barnes is not a member;
regularly consulting with other independent Directors between meetings;
regularly meeting with senior management, including to report feedback from the independent Directors; and
meeting in person and telephonically with unaffiliated holders of both Class A Common Stock and Class B Common Stock, and reporting feedback from these stockholders to the full Board.

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) our policies and practices that provide independent Board oversight, (ii) the effect a particular leadership structure may have on Company performance, (iii) the structure that serves the best interests of our stockholders, and (iv) any relevant legislative or regulatory developments.

Board Committees

The Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each committee is governed by a written charter approved by the Board. For more information see “—Corporate Governance Policies.”

Audit Committee
Primary Responsibilities
Assist the Board in its oversight of:
   the Company’s accounting and financial reporting processes and systems of internal control, including the audits of the Company’s financial statements and the integrity of its financial statements;
   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;
   risks that may have a significant impact on the financial statements;
   the Anti-Corruption Compliance Program and the activities of the Compliance Steering Committee; and
   the review, approval and ratification of related person transactions.
Financial Expertise and Independence
The Board has determined that all of the members of the Audit Committee are financially literate (in accordance with NASDAQ listing rules), “audit committee financial experts” (as defined under SEC rules) and independent (in accordance with SEC rules and NASDAQ listing rules for directors and audit committee members).
Report
The Report of the Audit Committee is set forth on page 26 of this proxy statement.
Met 7 times in fiscal 2017
Members
Peter Barnes (Chair)
Ana Paula Pessoa
Masroor Siddiqui

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Compensation Committee
Primary Responsibilities
   to review and approve goals and objectives relevant to the compensation of the CEO, to evaluate the performance of the CEO and to recommend to the Board the compensation of the CEO;
   to consider, authorize and oversee the incentive compensation plans in which the Company’s executive officers participate and the Company’s equity-based plans, including the granting of awards thereunder;
   to review and approve equity awards and other fixed and performance-based compensation, benefits and terms of employment of the executive officers and such other senior executives identified by the Compensation Committee;
   to review and approve employment and severance arrangements for executive officers, including employment agreements, separation agreements and change-in-control provisions, plans or agreements;
   to review and approve or ratify principal terms of other employment arrangements (excluding arrangements for talent) where the sum of the base salary, bonus target and long-term incentive target is equal to or greater than a specified threshold amount;
   to review and approve other separation obligations that exceed by more than a specified amount those provided for in an employment agreement required to be approved or ratified by the Compensation Committee;
   to review the 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 CEO regarding the selection of senior executives;
   to review anually the form and amount of compensation of Non-Executive Directors for service on the Board and its committees and to recommend changes in compensation to the Board as appropriate;
   to review the compensation policies and practices of the Company and its subsidiaries to determine whether they create risk-taking incentives that are reasonably likely to have a material adverse impact on the Company; and
   to oversee engagement and communications with stockholders on executive compensation matters, and review and assess the results of stockholder votes on executive compensation matters, including the Company’s most recent advisory vote on executive compensation.
Independence
The Board has determined that all of the members of the Compensation Committee are “non-employee directors“ (within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), “outside directors“ (within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code“)), and independent (in accordance with SEC rules and NASDAQ listing rules for directors and compensation committee members).
Delegation
Pursuant to its charter, the Compensation Committee may delegate its authority to one or more subcommittees, members of the Board or officers of the Company, to the extent permitted by law, when it deems appropriate and in the best interests of the Company. The Compensation Committee has delegated to Messrs. K.R. Murdoch and Thomson the authority to make awards of stock-based compensation within certain prescribed limits to non-executive officers of the Company. Any awards made by Messrs. K.R. Murdoch or Thomson 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 NEOs during fiscal 2017, including discussion of the role of compensation consultants, is found in the section titled “Compensation Discussion and Analysisbelow.
Report
The Report of the Compensation Committee is set forth on page 45 of this proxy statement.
Met 5 times in fiscal 2017
Members
Masroor Siddiqui (Chair)
Natalie Bancroft
Peter Barnes

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Nominating and Corporate Governance Committee
Primary Responsibilities
   to develop and recommend to the Board criteria for identifying and evaluating Director candidates and periodically review these criteria;
   to review the qualifications of candidates for Director suggested by Board members, stockholders, management and others in accordance with criteria recommended by the Nominating and Corporate Governance Committee and approved by the Board;
   to establish procedures for consideration of Board candidates recommended for the Nominating and Corporate Governance Committee’s consideration by the Company’s stockholders;
   to consider the performance, contributions and independence of incumbent Directors in determining whether to nominate them for re-election;
   to recommend to the Board a slate of nominees for election or re-election to the Board at each annual meeting of stockholders;
   to recommend to the Board candidates to be elected to the Board as necessary to fill vacancies and newly created directorships;
   to make recommendations to the Board as to determinations of Director independence;
   to advise and make recommendations to the Board on corporate governance matters;
   to develop and recommend to the Board, in coordination with the Lead Director, an annual self-evaluation process for the Board; and
   to oversee a succession planning process for the Board and its committees.
Independence
The Board has determined that all of the members of the Nominating and Corporate Governance Committee are independent (in accordance with SEC rules and NASDAQ listing rules for directors).
Met 5 times in fiscal 2017
Members
José María Aznar (Chair)
Kelly Ayotte
Natalie Bancroft

Director Attendance

Our Statement of Corporate Governance provides that Directors are expected to attend meetings of the Board and meetings of the Board committees on which they serve. During fiscal 2017, the Board held five meetings. Each of our current Directors attended at least 75% of the aggregate number of meetings of the Board and the committees on which he or she served (held during the period that he or she served).

Directors are also encouraged to attend and participate in the Company’s annual meeting of stockholders. Ten of the then serving Directors attended the annual meeting of stockholders held by the Company in November 2016.

Board’s Role in Strategy

Our Board sets the strategic vision for the Company. As part of this process, the Board reviews the Company’s long-term strategic plan at least annually

and monitors implementation of the strategic plan throughout the year. The Board generally discusses strategy at every regular meeting.

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Board Oversight of Risk

Risk management is primarily the responsibility of management; however, the Board oversees management’s identification and management of risks to the Company. 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 uses various means to fulfill this oversight responsibility. The Board, and its committees, as appropriate, regularly discuss and receive periodic updates from the CEO, CFO, General Counsel 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 and reputational risks, and the plans to address these risks.

Each of the Board’s standing committees assists the Board in overseeing the management of the Company’s risks within the areas delegated to that committee, which then reports to the full Board as appropriate. In particular:

the Audit Committee oversees risks relating to its review of the Company’s financial statements and financial reporting processes, and its oversight of the Company’s Compliance Steering Committee;
the Compensation Committee monitors risks associated with the design and administration of the Company’s compensation programs; and
the Nominating and Corporate Governance Committee oversees risk as it relates to the Company’s corporate governance processes.

Each standing committee has full access to management, as well as the ability to engage advisors.

Related Person Transactions Policy

Procedures for Approval of Related Person Transactions

The Audit Committee has established written procedures for the review of related person transactions. Pursuant to these procedures, the Audit Committee reviews and approves, ratifies or disapproves, as appropriate transactions, arrangements or relationships in which the Company or any of its subsidiaries is a participant, the aggregate amount involved exceeds $120,000 and in which a Director, Director emeritus, Director nominee, executive officer, 5% holder of the Company’s voting stock or an immediate family member of any of the foregoing has a direct or indirect material interest.

When determining whether to approve or ratify a related person transaction, the Audit Committee shall consider all relevant facts and circumstances, including, but not limited to: whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances; the business reasons for the transaction; whether the transaction would impair the independence of an independent Director; and whether the transaction would present an improper conflict of interest for any Director or

executive officer of the Company, taking into account the nature of the transaction and the Director or executive officer’s interest in the transaction. The Audit Committee shall not approve or ratify a related person transaction unless it has determined that, upon consideration of all relevant info, the transaction is in, or is not inconsistent with, the best interests of the Company and its stockholders. No Director will participate in any discussion or approval of a related person transaction for which he or she (or an immediate family member) is a related person, except that such Director will provide all material information concerning the transaction to the Audit Committee.

During fiscal 2017, all of the transactions described in this section that were subject to the Audit Committee’s policies and procedures were reviewed and approved or ratified by the Audit Committee or the Board.

Certain Relationships

Shiva Swami, the brother-in-law of Bedi Ajay Singh, the Company’s former CFO, has provided information technology services on an arms-length, ordinary course basis to News America Marketing, a division

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of the Company, through an intermediary service company. Mr. Swami received approximately $600,000 for his work providing these services. Mr. Swami is expected to receive approximately $300,000 for similar work in fiscal 2018.

Nisha Bedi, the daughter of Mr. Singh, is employed at Move, in which the Company owns an 80% interest, as a Business Analyst, and her annual total compensation is approximately $135,000. Ms. Bedi’s compensation was established in accordance with the Company’s employment and compensation practices applicable to employees with similar qualifications and responsibilities.

News Corp Australia, a division of the Company, REA Group, in which the Company owns a 61.6% interest, HarperCollins, a division of the Company, and/or their respective subsidiaries purchase advertising on an arms-length, ordinary course basis from Nova Entertainment Group (“Nova”), of which Mr. L.K. Murdoch, Co-Chairman of the Company, serves as Executive Chairman and in which he holds an indirect 100% interest. In fiscal 2017, the aggregate value of such transactions was approximately $850,000, representing less than 5% of recipient’s revenues. In addition, Nova purchases advertising on an arms-length, ordinary course basis from News Corp Australia. In fiscal 2017, the aggregate value of such transactions was approximately $650,000, representing less than 5% of recipient’s revenues. Pursuant to existing arrangements, News Corp Australia is expected to purchase approximately $150,000 in advertising and receive approximately $500,000 in advertising revenue from Nova in fiscal 2018.

Pursuant to existing arrangements, HarperCollins is expected to make future payments of less than $150,000 for book royalty advances on an arms-length, ordinary course basis to Union Literary, a literary agency of which Trena Keating, the spouse of David B. Pitofsky, the Company’s General Counsel, is a partner. Ms. Keating is expected to receive approximately $20,000 of such amount.

In December 2016, News Corp Australia, FOX SPORTS Australia, a division of the Company, Ten Network Holdings Limited ("Ten") and Nova became shareholders in Scaleup Media Fund (“Scaleup”), a company that provides advertising to start-up companies in exchange for equity interests in such companies. Pursuant to the shareholders’ deed governing Scaleup, News Corp Australia, FOX SPORTS Australia, Ten and Nova contributed approximately $160,000, $80,000, $80,000 and $80,000, respectively, in exchange for equity ownership of 40%, 20%, 20% and 20%, respectively. For each of 2017, 2018 and 2019, News Corp Australia is to contribute approximately $1,500,000 and each of the other shareholders is to contribute approximately $750,000 in advertising space to Scaleup. The selection of prospective recipient start-up companies and campaigns will be determined by the board of directors of Scaleup, which will comprise one director designated by each shareholder. Each shareholder may decline participation in any particular campaign.

CEO Succession Planning

Our Statement of Corporate Governance provides that the Board will annually review CEO succession. The Compensation Committee, in consultation with the CEO, reviews and assists with the development of executive succession plans. The CEO provides the

Compensation Committee with an assessment of members of senior management and their succession potential. The Compensation Committee reports the results of these assessments to the Board.

Annual Board and Committee Evaluations

The Lead Director and the Nominating and Corporate Governance Committee are responsible for overseeing an annual self-evaluation process for the Board that includes an assessment, among other things, of the Board’s maintenance and implementation of the Company’s standards of conduct and corporate governance policies. The review seeks to identify specific areas, if any, in need

of improvement or strengthening and culminates in a discussion by the full Board of the results and any actions to be taken. Each standing committee of the Board evaluates its performance on an annual basis and reports to the Board on such evaluation.

Over the past year, each Director completed a written questionnaire on a number of topics, including Board composition and structure, Board and committee

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responsibilities and effectiveness, Director engagement and performance, and Board meetings and resources. The results were discussed by the full Board, with management, and in an executive

session of the independent Directors. In addition, each standing committee conducted its own self-evaluation and reported on the same to the full Board.

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;
leadership and ability to exercise sound judgment;
general business experience and familiarity with the Company’s businesses; and
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 of our Directors. All candidates must possess personal integrity and ethical character, and value and appreciate these qualities in others. It is expected that each Director will devote the necessary time to fulfill the duties of 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.

Although the Board does not have a formal policy with respect to diversity in identifying Director nominees, the Nominating and Corporate Governance Committee seeks to promote through the nomination process an appropriate diversity on the Board of professional background, experience, expertise, perspective, age, gender, ethnicity and geographic location/country of citizenship, and assesses the effectiveness of these factors in the Director selection and nomination process. The Board also evaluates its diversity as part of its annual self-evaluation process. The current composition of the Board reflects those efforts and the importance of diversity to the Board. The Company maintains a Corporate Diversity Statement, which describes our diversity and inclusion objectives and efforts. The Corporate Diversity Statement is available on the Company’s website at newscorp.com under “About Us—Corporate Governance—Corporate Diversity Statement.”

After completing its evaluation of a potential Director nominee, the Nominating and Corporate Governance Committee will make a recommendation to the full Board, which makes the final determination whether to nominate or appoint the Director nominee.

Stockholder Recommendation of Director Candidates

Stockholders may recommend Director candidates for consideration by the Nominating and Corporate Governance Committee by submitting their names and appropriate background and biographical information in writing to the attention of the Corporate Secretary at News Corporation, 1211 Avenue of the Americas, New York, New York 10036. Director candidates recommended by stockholders should meet the Director qualifications set forth under the heading “Board Membership Criteria” in the Statement of Corporate Governance. 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.

Communicating with the Board

Stockholders and other persons interested in communicating with any 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 mail to the attention of the appropriate

party or to the attention of our Lead Director at News Corporation, 1211 Avenue of the Americas, New York, New York 10036 or by email to LeadDirector@newscorp.com.

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Pursuant to the process established by the Nominating and Corporate Governance Committee for handling all communications received by the Company and addressed to the Board, the Corporate Secretary reviews and forwards such communications as appropriate. Certain items that are unrelated to the duties and responsibilities of the Board will not be forwarded such as: business solicitation or advertisements; product-related

inquiries; junk mail or mass mailings; resumes or other job-related inquiries; and spam and unduly hostile, threatening, potentially illegal or similarly unsuitable communications. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the corporate audit department and handled in accordance with the procedures established by the Audit Committee with respect to such matters.

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DIRECTOR COMPENSATION

Directors’ fees are not paid to Directors who are executives or employees of the Company (collectively, the “Executive Directors”) because the responsibilities of Board membership are considered in determining compensation paid as part of the Executive Directors’ normal employment conditions.

The basic fees payable to the Directors who are not executives of the Company (collectively, the “Non-Executive Directors”) are reviewed and recommended by the Compensation Committee and set by the Board. The Compensation Committee annually reviews the form and amount of Non-Executive Director compensation, including against that of the Company’s peers and general industry. In such review, the Compensation Committee considers the appropriateness of the form and amount of Non-Executive Director compensation and makes recommendations to the Board concerning Non-Executive Director compensation with a view toward attracting and retaining qualified Directors. The Company believes that compensation for Non-Executive Directors should be competitive and fairly reflect the work and skills required for a company of News Corporation’s size and complexity. The Company also believes that Non-Executive Director compensation should include equity-based compensation in order to further align Directors’ interests with the long-term interests of stockholders. As part of its fiscal 2017 review, the Compensation Committee reviewed and considered data provided to the Committee by its independent compensation consultant regarding the amounts and type of compensation paid to non-management directors at the companies in the Company’s peer group used by the Compensation Committee for the assessment of executive compensation. As a result of this review, the Compensation Committee determined that compensation of Non-Executive Directors on the Board and its committees is reasonable and appropriate.

During fiscal 2017, the Non-Executive Directors were Mmes. Ayotte (beginning April 1, 2017), Bancroft, Chao (until January 31, 2017) and Pessoa and Messrs. L.K. Murdoch, Aznar, Barnes, Elkann (until September 30, 2016), Klein, J.R. Murdoch and Siddiqui. The annual retainers paid to Non-Executive Directors for service on the Board and its committees in fiscal 2017 are set forth in the table below.

Annual Board and Committee Retainers for the Fiscal Year Ended June 30, 2017

Board Cash Retainer
$
100,000
 
Board Deferred Stock Unit (“DSU”) Retainer
$
145,000
 
Lead Director Retainer
$
35,000
 
Audit Committee Chair Retainer
$
20,000
 
Compensation Committee Chair Retainer
$
12,000
 
Nominating and Corporate Governance Committee Chair Retainer
$
10,000
 
Audit Committee Member Retainer
$
8,000
 
Compensation Committee Member Retainer
$
6,000
 
Nominating and Corporate Governance Committee Member Retainer
$
6,000
 

DSUs are awarded to Non-Executive Directors on a quarterly basis on July 1, October 1, January 1 and April 1 of each year (or the first trading day following such date) (each, a “DSU Grant Date”). The number of DSUs awarded each DSU Grant Date is based on the closing price of the Company’s Class A Common Stock on such DSU Grant Date. DSUs will vest upon the earlier of (i) the July 1, October 1, January 1 or April 1 closest to the fifth anniversary of the DSU Grant Date (or the first trading day following such date) and (ii) the date of the Non-Executive Director’s end of service (or the first trading day following such date) (each, a “DSU Vest Date”), at which time DSUs will be payable in cash based on the closing price of the Company’s Class A Common Stock on such DSU Vest Date. To further align the Non-Executive Directors’ compensation with total return to stockholders, the Compensation Committee determined to grant dividend equivalents on DSUs beginning with the fiscal 2017 DSU Retainer. Such dividend equivalents are represented by additional DSUs and are payable when the underlying award vests.

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In addition, all Non-Executive Directors are reimbursed for reasonable travel and other out-of-pocket business expenses incurred in connection with attendance at meetings of the Board and its committees. We may invite the spouse or family members of each Non-Executive Director to attend events associated with Board meetings or other Company-related events. To the extent costs for these activities and costs for any other personal benefits for a Non-Executive Director exceeds $10,000 for the year, they are included in the amounts in the table below.

The table below shows the total compensation paid during fiscal 2017 by the Company to each of the Directors who served during fiscal 2017 and who are not NEOs.

Director Compensation for the Fiscal Year Ended June 30, 2017

Name
Fees Earned or
Paid in Cash
Stock
Awards(a)
Option
Awards
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation
Total
Lachlan K. Murdoch
$
100,000
 
$
109,916
 
 
 
 
 
$
174,644
(b) 
$
384,560
 
Kelly Ayotte(c)
$
26,500
 
$
36,247
 
 
 
 
 
 
 
$
62,747
 
José María Aznar
$
116,000
 
$
109,916
 
 
 
 
 
 
 
$
225,916
 
Natalie Bancroft
$
112,000
 
$
109,916
 
 
 
 
 
 
 
$
221,916
 
Peter L. Barnes
$
169,000
 
$
109,916
 
 
 
 
 
 
 
$
278,916
 
Elaine L. Chao(d)
$
66,817
 
$
49,045
 
 
 
 
 
 
 
$
115,862
 
John Elkann(e)
$
25,000
 
$
311
 
 
 
 
 
 
 
$
25,311
 
Joel I. Klein
$
100,000
 
$
109,916
 
 
 
 
 
$
9,195
(f) 
$
219,111
 
James R. Murdoch
$
100,000
 
$
109,916
 
 
 
 
 
 
 
$
209,916
 
Ana Paula Pessoa
$
108,000
 
$
109,916
 
 
 
 
 
 
 
$
217,916
 
Masroor Siddiqui
$
126,000
 
$
109,916
 
 
 
 
 
 
 
$
235,916
 



(a) DSU Grant Dates occur July 1, October 1, January 1 and April 1 of each year (or the first trading day following such date). As the Company maintains a 52-53-week fiscal year ending on the Sunday nearest to June 30, each fiscal year may include three, four or five DSU Grant Dates. Fiscal 2017 was a 52-week period, which resulted in our Non-Executive Directors receiving three quarterly DSU grants during the fiscal year on October 1, 2016, January 4, 2017 and April 1, 2017. The amounts set forth in the “Stock Awards” column represent the aggregate grant date fair value of stock awards granted during the fiscal year ended June 30, 2017, including dividend equivalents thereon, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For additional information on how we account for equity-based compensation, see Note 12 to our consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2017 filed with the SEC on August 14, 2017. The aggregate number of equity awards outstanding as of fiscal year end for each Non-Executive Director appears in the table on the following page.
(b) Represents certain security expenses provided to Mr. L.K. Murdoch, Co-Chairman of the Company. These services are incremental to security arrangements provided at News Corporation business facilities. The Compensation Committee has approved these expenses as reasonable, necessary and for the Company's benefit.
(c) Represents compensation for partial-year service as a Non-Executive Director; Ms. Ayotte was elected to the Board effective April 1, 2017
(d) Represents compensation for partial-year service as a Non-Executive Director; Ms. Chao resigned from the Board effective January 31, 2017.
(e) Represents compensation for partial-year service as a Non-Executive Director; Mr. Elkann resigned from the Board effective September 30, 2016.
(f) Represents contributions made by the Company in respect of medical, dental and vision plans for the benefit of Mr. Klein in respect of his prior employment by the Company as Chief Executive Officer of Amplify, a digital education business formerly owned by the Company, and Executive Vice President, Office of the Chairman.

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DIRECTOR COMPENSATION



Stock Ownership Guidelines for Non-Executive Directors

Pursuant to the Statement of Corporate Governance, Non-Executive Directors are required to own equity securities of the Company (including DSUs, stock appreciation rights (“SARs”) and restricted stock units (“RSUs”)) equal in value to at least five times the amount of the Non-Executive Director’s annual cash retainer for service on the Board. Each Non-Executive Director will have five years from his or her first election to the Board to comply with these guidelines. All incumbent Non-Executive Directors currently comply with or are on track to comply with the stock ownership guidelines.

The following table sets forth information with respect to the aggregate outstanding equity awards at the end of fiscal 2017 of each of the Directors who served during fiscal 2017 and who are not NEOs, which include unvested cash-settled DSUs and, with respect to Mr. Klein, unvested PSUs.

 
Stock Awards
Name
Number of Shares or Units
of Stock That Have Not
Vested
Lachlan K. Murdoch
 
38,983
 
Kelly Ayotte
 
2,834
 
José María Aznar
 
49,283
 
Natalie Bancroft
 
49,283
 
Peter L. Barnes
 
49,283
 
Elaine L. Chao
 
(a) 
John Elkann
 
(b) 
Joel I. Klein
 
141,656
(c) 
James R. Murdoch
 
37,629
 
Ana Paula Pessoa
 
37,629
 
Masroor Siddiqui
 
37,629
 
(a) Ms. Chao resigned from the Board effective January 31, 2017.
(b) Mr. Elkann resigned from the Board effective September 30, 2016.
(c) Comprises 124,434 PSUs and 17,222 DSUs.

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PROPOSAL NO. 2

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected Ernst & Young LLP (“E&Y”) 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, 2018. E&Y has audited the books and records of the Company since its formation. In order to provide for continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of our independent registered public accounting firm. Further, in connection with the mandated rotation of our independent registered public accounting firm's lead engagement partner, the Audit Committee is directly involved in the periodic selection of E&Y's lead engagement partner.

The Audit Committee believes that the continued retention of E&Y is in the best interests of the Company and its stockholders, and is submitting the appointment of E&Y to the stockholders for ratification as a matter of good corporate governance. If this appointment is not ratified by our stockholders, the Audit Committee will reconsider its decision. A representative of E&Y is expected to be present at the Annual Meeting. He or she will have an opportunity to make a statement and will be available to respond to appropriate questions.

FOR
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JUNE 30, 2018.

Fees Paid to Independent Registered Public Accounting Firm

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm. Accordingly, the Audit Committee has appointed E&Y 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 E&Y. These pre-approval procedures are described below under “—Audit Committee Pre-Approval Policies and Procedures.”

The description of the fees for the services rendered to the Company and its subsidiaries by E&Y for the fiscal years ended June 30, 2017 and June 30, 2016 is set forth below.

 
Fiscal 2017
Fiscal 2016
Audit Fees(a)
$
13,517,000
 
$
11,982,000
 
Audit-Related Fees(b)
 
780,000
 
 
1,097,000
 
Tax Fees(c)
 
3,715,000
 
 
3,720,000
 
All Other Fees(d)
 
245,000
 
 
80,000
 
Total Fees
$
18,257,000
 
$
16,879,000
 
(a) 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, 2017 and June 30, 2016; the audit of internal control over financial reporting as of June 30, 2017 and June 30, 2016 (as required by Section 404 of the Sarbanes-

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Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”)); statutory audits required internationally; and reviews of the Company’s unaudited consolidated interim financial statements included in the Company’s statutory and regulatory filings.

(b) Audit-related fees relate principally to employee benefit plan audits, due diligence related to mergers and acquisitions, audits of entities to be sold, accounting consultations, agreed-upon procedure reports, reports on internal controls over certain distribution services provided to third parties and other services related to the performance of the audit or review of the Company’s consolidated financial statements.
(c) Tax fees include fees for tax compliance and tax consultations for domestic and international operating units, including due diligence related to mergers and acquisitions.
(d) All other fees relate principally to expatriate services.

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, 2017 and June 30, 2016 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 E&Y during the fiscal years ended June 30, 2017 and June 30, 2016, 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 of 1933, as amended, 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 (i) the Company’s accounting and financial reporting processes and systems of internal control, including the audits of the Company’s financial statements and the integrity of financial statements, (ii) 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, (iii) the Company’s compliance with legal and regulatory requirements involving financial, accounting and internal control matters, (iv) investigations into complaints concerning financial matters, (v) risks that have a significant impact on the Company’s financial statements, (vi) oversight of the Company’s ongoing Anti-Corruption Compliance Program and activities of the Company’s Compliance Steering Committee and (vii) the review, approval and ratification of transactions with related persons. 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’s responsibility is to monitor and oversee these processes.

In discharging its oversight responsibility as to the audit process, the Audit Committee (i) obtained from the independent registered public accounting firm a formal written statement 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 the independent registered public accounting firm are compatible with maintaining such firm’s 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 Standard No. 1301, “Communication with Audit Committees,” as adopted by the Public Company Accounting Oversight Board. The Audit Committee met with each of the independent registered public accounting firm and the corporate auditors, both with management present and 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, 2017 with management and the independent registered public accounting firm.

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At its meetings every quarter, the Audit Committee met with members of management, the independent registered public accounting firm and the corporate auditors to review the fiscal 2017 certifications provided by the CEO and the CFO 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) any 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 received reports from the Company’s General Counsel and Chief Compliance Officer and the corporate auditors regarding the

Company’s policies, processes and procedures relating to compliance with News Corporation’s Global Anti-Bribery and Anti-Corruption Policy and the activities of the Company’s Compliance Steering Committee.

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, 2017, for filing with the SEC. The Audit Committee also appointed E&Y as the Company’s independent registered public accounting firm for fiscal 2018, and the Board concurred in such appointment.

THE AUDIT COMMITTEE:

Peter L. Barnes (Chair)
Ana Paula Pessoa
Masroor Siddiqui

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PROPOSAL NO. 3

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act require that the Company provide our stockholders with the opportunity to approve, on an advisory, nonbinding basis, the compensation of our NEOs as disclosed in this proxy statement in accordance with the rules of the SEC.

As described in detail in the “Compensation Discussion and Analysis,” the Compensation Committee seeks to closely align the interests of our NEOs with the interests of the Company’s stockholders. The Company’s executive compensation program is designed to drive Company performance, ensure our compensation practices support growth for stockholders, and attract, retain and motivate the top executive talent necessary for the Company’s success. The compensation framework designed by the Company emphasizes a pay for performance model, a focus on long-term growth and diversified performance metrics. The Compensation Committee believes that our compensation framework effectively aligns pay with individual and Company performance as further described beginning on page 33 under the heading “Aligning Compensation with Company Performance.” In addition, as described on page 35 under the heading “Fiscal 2017 Pay Mix,” the compensation framework places a significant majority of the Executive Chairman’s, CEO’s, CFO’s and General Counsel’s total direct compensation “at-risk” and dependent upon performance, with a significant portion of total direct compensation tied to the Company’s long-term results and future stock price performance. The Company has also implemented a number of executive compensation practices, as described on page 32, which the

Compensation Committee considers to be effective at driving performance and supporting long-term growth for our stockholders.

The Board recommends that stockholders indicate their support for the Company’s compensation of its NEOs. 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 NEO 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 2017 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

The Board of Directors has adopted a policy providing for annual “say-on-pay” advisory votes. Unless the Board of Directors modifies its policy on the frequency of holding “say-on-pay” advisory votes, the next “say-on-pay” advisory vote will occur in 2018.

FOR
THE BOARD UNANIMOUSLY RECOMMENDS AN ADVISORY VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

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EXECUTIVE OFFICERS OF NEWS CORPORATION

The executive officers of the Company as of October 3, 2017 are set forth in the table below. Unless otherwise specified, each holds the office indicated until his or her successor is chosen and qualified at the regular meeting of the Board to be held following the Annual Meeting, or at another meeting of the Board as appropriate.

Name
Age
Position with the Company
K. Rupert Murdoch(a)
86
Executive Chairman
Robert J. Thomson
56
Chief Executive Officer
Susan Panuccio
45
Chief Financial Officer
David B. Pitofsky
52
General Counsel
(a) Mr. K.R. Murdoch is the father of Mr. L.K. Murdoch, the Company’s Co-Chairman and a Director, and Mr. J.R. Murdoch, a Director. None of the other executive officers of the Company is related to any other executive officer or Director of the Company by blood, marriage or adoption.

Information concerning Messrs. K.R. Murdoch and Thomson can be found under “Proposal No. 1: Election of Directors.”

Susan Panuccio—Ms. Panuccio has served as the Company’s Chief Financial Officer since March 1, 2017. Ms. Panuccio previously served as Chief Financial Officer of News Corp Australia, a division of the Company, since 2013. From 2008 to 2012, she served as Chief Financial Officer of News UK, a division of the Company. Prior to assuming that role, she served in a variety of roles within News UK, including Director of Strategic Program Management and Director of Corporate Planning, since joining the Company in 2002. Prior to joining the Company, Susan worked in finance roles at corProcure,

AngloGold Ashanti and Ansett Australia. She began her career as a Senior Accountant at KPMG. Ms. Panuccio is a chartered accountant.

David B. Pitofsky—David B. Pitofsky has served as the Company’s General Counsel since February 2015. He also serves as the Chief Compliance Officer of the Company. Mr. Pitofsky served as a Deputy General Counsel for the Company from April 2013 until February 2015 and as the Company’s Deputy Chief Compliance Officer from June 2013 until February 2015. Mr. Pitofsky previously held the position of partner at Goodwin Procter LLP, a law firm, from 2005 to March 2013. From 1996 to 2005, Mr. Pitofsky was an Assistant U.S. Attorney in the Eastern District of New York, rising to the level of Deputy Chief of the Criminal Division.

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COMPENSATION DISCUSSION AND ANALYSIS

This section explains the Company’s compensation philosophy and summarizes the material components of our executive compensation program. Our named executive officers, or NEOs, for fiscal 2017 are:

Name
Title
K. Rupert Murdoch
Executive Chairman
Robert J. Thomson
Chief Executive Officer
Susan Panuccio(a)
Chief Financial Officer
David B. Pitofsky
General Counsel
Bedi Ajay Singh(b)
Former Chief Financial Officer
(a) Ms. Panuccio was appointed CFO effective March 1, 2017.
(b) Mr. Singh served as CFO during fiscal 2017 until March 1, 2017. For details, see “—Executive Summary— Change in Chief Financial Officer” below.

The NEOs listed above represent all of the Company’s executive officers, as defined by SEC rules, during fiscal 2017.

Executive Summary

Compensation Philosophy

The Compensation Committee has established a compensation program that seeks to support the creation of long-term growth and value for our stockholders through three key objectives:

Drive Company Performance
Program emphasizes variable, performance-based compensation
Balance of short- and long-term “at-risk” compensation elements designed to reward superior performance without encouraging unnecessary and excessive risk-taking
Align Pay with Performance
Performance-related compensation opportunities designed to reward executives based on Company and individual performance
Executives receive target payouts of incentive compensation only upon achievement of rigorous performance metrics
Attract, Retain and Motivate Leadership Talent
Competitive program designed to enable the Company to attract the highest quality talent
Program considers compensation practices and trends in relevant industries

Stockholder Feedback Informs the Executive Compensation Program

The Company highly values and carefully considers feedback from our stockholders regarding our executive compensation program. The independent Directors view stockholder outreach as an area of priority and in fiscal 2017 directed the continuation of the Company’s engagement program, which includes a specific focus on corporate governance. Our fiscal 2017 outreach program included engagement with unaffiliated stockholders representing over 25% of the outstanding Class B Common Stock and over

50% of the outstanding Class A Common Stock. Our independent Lead Director and Nominating and Corporate Governance Committee Chair directly participated, in person or by telephone, in many of these engagements. The Compensation Committee is responsible for overseeing engagement and communications with stockholders regarding our executive compensation program, and incorporates feedback from this engagement into their decision-making. For more detail on the Company’s active stockholder outreach program, please refer to “Corporate Governance Matters—Stockholder

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Engagement.” Stockholders are invited to express their views to the Compensation Committee through the procedures described under “Corporate Governance Matters—Communicating with the Board.”

The annual advisory vote on the compensation of the NEOs also provides stockholders with an opportunity to communicate their views on our executive compensation program. At our 2016 annual meeting of stockholders, stockholders continued their support of our executive compensation program with approximately 90.2% of the votes cast in favor of our advisory proposal to approve the compensation of our NEOs. Upon consideration of the high percentage of votes cast in favor of our NEO compensation, along with additional feedback from engagement with stockholders, among other considerations, the Compensation Committee determined to maintain the general structure of our executive compensation program but to continually review the program. In addition, the Compensation Committee implemented enhancements to further align executives’ interests with those of our stockholders as follows:

Increased the percentage of CEO’s, former CFO’s and General Counsel’s “at-risk” pay for fiscal 2017; and
Adopted a modified peer group to better reflect the Company’s competitive landscape for fiscal 2018.

Change in Chief Financial Officer

On February 23, 2017, the Company announced the departure of Bedi Ajay Singh as the Company’s CFO, effective March 1, 2017. In connection with his departure, Mr. Singh and the Company entered into a separation agreement. For details, see “Executive Compensation—Potential Payments upon Termination.” In addition, Mr. Singh and the Company entered into an agreement pursuant to which Mr. Singh provided consulting services to the Company for a term of six months at a rate of $12,500 per month.

As a result, Ms. Susan Panuccio was appointed CFO of the Company. In connection with her appointment, Ms. Panuccio and the Company entered into an employment agreement, effective as of March 1, 2017, for a term ending on June 30, 2020. For details regarding the terms of her employment agreement, see “Executive Compensation— Employment Agreements—Summary of Susan Panuccio’s Employment Agreement” and “Executive Compensation—Potential Payments upon Termination—Susan Panuccio.” Compensation details for each NEO are more fully described in the section titled “Executive Compensation.”

Total Direct Compensation

The following table presents the total direct compensation (“TDC”) awarded to Messrs. K.R. Murdoch, Thomson, Pitofsky and Singh and Ms. Panuccio for fiscal 2017. TDC differs from the amounts reported in the Summary Compensation Table as required by the SEC, and reflects the amounts the Compensation Committee considers most relevant in assessing and determining executive compensation for the fiscal year. TDC is comprised of each NEO’s annual base salary, target performance-based annual cash incentive (“Annual Cash Incentive”) and target grant value of long-term performance-based equity awards granted under our 2013 Long-Term Incentive Plan, as amended (“LTIP”), in the form of performance stock units, or PSUs.

Named Executive Officer
Base Salary
Target Annual
Cash Incentive
Target Long-Term
Incentive Award
Total Direct
Compensation
% of Total Direct
Compensation
Pay “At-Risk”
K. Rupert Murdoch
$
1,000,000
 
$
2,000,000
 
$
2,000,000
 
$
5,000,000
 
 
80
%
Robert J. Thomson
$
2,000,000
 
$
4,000,000
 
$
5,000,000
 
$
11,000,000
 
 
82
%
Susan Panuccio(a)
$
1,100,000
 
$
442,118
 
$
427,225
 
$
1,969,343
 
 
44
%
David B. Pitofsky
$
950,000
 
$
750,000
 
$
800,000
 
$
2,500,000
 
 
62
%
Bedi Ajay Singh(b)
$
1,300,000
 
$
2,000,000
 
$
2,200,000
 
$
5,500,000
 
 
76
%
(a) Reflects Ms. Panuccio’s annual base salary effective with her appointment as CFO on March 1, 2017. Her actual base salary for fiscal 2017 was pro-rated to reflect her promotion to the role of CFO during fiscal 2017. For fiscal 2017, Ms. Panuccio’s target Annual Cash Incentive was set and her target long-term incentive award was set and granted prior to her appointment as CFO. Her fiscal 2017 target Annual Cash Incentive was equal to $575,000

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Australian dollars and for purposes of this table was converted to U.S. dollars using the spot exchange rate as of June 30, 2017, the last trading day of fiscal 2017, which was AUD 1 = USD 0.7689, as reported on Bloomberg. Her target long-term incentive award was equal to $575,000 Australian dollars and was converted at grant (in August 2016) to U.S. dollars using an exchange rate of AUD 1 = USD 0.743, representing the average exchange rate for the last 20 days of fiscal 2016. Ms. Panuccio’s employment agreement provides for 67% of annual TDC to be “at risk” and performance-based, assuming base salary, target Annual Cash Incentive and target long-term incentive award are set at the minimum levels. For details regarding the terms of her employment agreement, see “Executive Compensation—Employment Agreements—Summary of Susan Panuccio’s Employment Agreement” and “Executive Compensation—Potential Payments upon Termination—Susan Panuccio” below.

(b) Mr. Singh’s employment as CFO terminated effective March 1, 2017. As a result, his actual compensation for fiscal 2017 has been agreed upon pursuant to the terms of his separation agreement. For details, see “Executive Compensation—Potential Payments upon Termination—Summary of Bedi Ajay Singh’s Separation Agreement.”

NEO Compensation Program Practices

The table below highlights our current executive compensation practices, including practices we engage in because we believe they drive performance and those we do not engage in because they are inconsistent with our stockholders’ long-term interests:

What We Do
Majority of compensation is “at-risk” — the performance-based, variable pay portion of fiscal 2017 TDC was 80% for the Executive Chairman, 82% for the CEO, 76% for the former CFO and 62% for the General Counsel
Use of multiple performance metrics — Annual Cash Incentive and long-term incentive awards for NEOs rely on diversified performance metrics that incentivize and reward the achievement of multi-dimensional aspects of our operational and long-term business strategy
Payouts of NEO incentive compensation are subject to achievement of rigorous performance metrics
Caps on payouts of Annual Cash Incentive and long-term incentive awards
Performance on ethics and compliance objectives impacts payout of qualitative portion of Annual Cash Incentive awards
Clawback policies provide for recoupment, under certain circumstances, of performance-based cash and equity compensation
Stock ownership guidelines for the CEO, CFO, General Counsel and Non-Executive Directors
Annual compensation risk assessment
Independent compensation consultant that provides no other services to the Company
Regular stockholder feedback through annual say-on-pay vote and robust ongoing engagement program on corporate governance matters, including executive compensation
What We Do Not Do
No “single trigger” cash severance or automatic vesting of equity awards based solely upon a change in control of the Company
NEO employment agreements do not contain provisions relating to a change in control
No excise tax gross-ups or tax gross-ups on NEO perquisites
No hedging of Company stock by Directors and NEOs
No pledging of Company stock owned directly by Directors and NEOs
No re-pricing of stock options or SARs without stockholder approval
No payment of dividend equivalents unless and until underlying performance-based awards are earned
No excessive NEO perquisites
No guaranteed bonuses
Do not maintain compensation programs that create risks reasonably likely to have a material adverse effect on the Company

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Aligning Compensation with Company Performance

The Compensation Committee is responsible for the oversight of the Company’s executive compensation framework, and within that framework, aligning compensation with Company performance and providing incentives that reward sustained value creation and responsible risk-taking.

For the fiscal 2017 Annual Cash Incentive, the Compensation Committee set the midpoint of its target range for adjusted Total Segment EBITDA* at $907 million and the Company achieved $864.8 million, resulting in a 100% payout of the quantitative portion of the award. The Compensation Committee also determined payouts of the qualitative portions of the fiscal 2017 Annual Cash Incentive for each NEO in light of his achievements and contributions during fiscal 2017. For more information, please see “—Named Executive Officer Compensation—Fiscal 2017 Annual Cash Incentive.”

For the fiscal 2015-2017 PSU Award, the Compensation Committee set the midpoints of its target range for cumulative adjusted earnings per share (“EPS”)* and cumulative adjusted free cash flow (“FCF”)* at $2.19 and $1.872 billion, respectively, and the target for total shareholder return (“TSR”) relative to the S&P 500 at the 50th percentile. The Company achieved $1.53, $2.088 billion and the 16th percentile, respectively, resulting in a 61.4% payout of the awards. For more information, please see “—Named Executive Officer Compensation—Payout of Fiscal 2015-2017 PSU Award.”

Fiscal 2017 performance highlights include:

Fiscal 2017 total revenues of $8.14 billion decreased 2% compared to the prior year, primarily due to lower print advertising revenues at the News and Information Services segment, the negative impact from foreign currency fluctuations, partially offset

by growth in the Digital Real Estate Services segment and the acquisitions of Wireless Group and Australian Regional Media.

Loss from continuing operations was $643 million compared to income from continuing operations of $235 million in the prior year. The loss includes approximately $1 billion of pre-tax non-cash impairments and write-downs, primarily related to the write-down of fixed assets at the U.K. and Australian newspapers and the Company's investment in Foxtel.
The Company reported fiscal 2017 Total Segment EBITDA* of $885 million, as compared to $684 million in the prior year; fiscal 2016 included a one-time charge of $280 million related to the settlement of litigation at the Company’s News America Marketing division and a one-time gain of $122 million for the settlement of litigation at Move, in which the Company owns an 80% interest. Excluding these items, full year Total Segment EBITDA for fiscal 2016 would have been $842 million. Strong growth at the Digital Real Estate Services segment and improvement in the Book Publishing segment were partially offset by the declines at the News and Information Services segment.
The Company reported fiscal 2017 net cash provided by continuing operating activities of $499 million.
Digital Real Estate Services segment revenues grew 14% compared to the prior year and accounted for 37% of Total Segment EBITDA. Move continued to grow traffic to realtor.com®, reaching approximately 58 million average monthly unique users in the fourth quarter.
* Consistent with the terms of the Annual Cash Incentive program and the terms of the fiscal 2015-2017 PSU Award, the performance factors were adjusted to reflect certain unusual events that occurred during the year. These adjustments can result in either increases or decreases in the performance factors and are intended to ensure that award payments represent the underlying performance of the Company’s business and are not artificially inflated or deflated due to unusual events. In fiscal 2017, the adjustments included acquisitions and dispositions of businesses, changes in foreign exchange rates, extraordinary gains and losses, restructuring expenses and payments, certain non-recurring or unusual items and certain litigation expenses. The Compensation Committee reviewed all adjustments to ensure the adjustments are consistent with the Compensation Committee’s philosophy on executive pay. Total Segment EBITDA is a non-GAAP financial measure. For information on Total Segment EBITDA, as defined by the Company, please see pages 49-50 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2017 filed with the SEC on August 14, 2017.

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The Company saw continued success in transitioning the news mastheads to digital, with digital revenues representing 25% of the News and Information Services segment revenues in fiscal 2017, compared to 22% in fiscal 2016.
HarperCollins had strong sales in Christian publishing with The Magnolia Story by Chip and Joanna Gaines and Jesus Calling and Jesus Always by Sarah Young.
In September 2016, the Company acquired Wireless Group, which operates talkSPORT, the leading sports radio network in the U.K., and a portfolio of radio stations in the U.K. and Ireland. The acquisition broadens the Company’s range of services in the U.K., Ireland and internationally and the Company continues to closely align Wireless Group’s operations with those of The Sun and The Times.

Executive Compensation Practices

How Executive Compensation Decisions Are Made

In establishing and reviewing NEO compensation packages, the Compensation Committee considers the nature and scope of the NEO’s role and responsibilities, leadership and management experience, individual contributions, Company performance, achievement of strategic objectives, information on market compensation levels (as further described below under “—Comparative Market Data and Industry Trends”), taking into account industry and geographic considerations, retention considerations, the terms of each NEO’s employment agreement, prior compensation and term of service, internal pay parity and feedback from stockholders through the results of the annual say-on-pay vote and through other engagement.

NEOs do not participate in the Compensation Committee’s deliberations or decisions regarding their own compensation. Management, together with the Compensation Committee’s independent compensation consultant, assists the Compensation Committee by providing data, analyses and recommendations regarding the Company’s executive compensation practices and policies. In addition, the Executive Chairman and CEO present individual pay recommendations to the Compensation Committee for the other NEOs. These recommendations are based on their assessments of individual contributions, achievement of performance objectives and other qualitative factors. The Compensation Committee considers management’s input along with the advice of its independent compensation consultant in making decisions on compensation matters.

Role of the Independent Compensation Consultant

During fiscal 2017, the Compensation Committee continued to retain Frederic W. Cook & Co., Inc. (“FW Cook”) as an independent compensation consultant. The role of the compensation consultant is to serve as an objective third-party advisor to the Compensation Committee on compensation arrangements, assessing reasonableness of compensation levels in comparison with those of similarly situated companies and the appropriateness of the compensation program structure in supporting the Company’s strategic objectives. The compensation consultant reports directly to the Compensation Committee and the Compensation Committee may replace the compensation consultant, or hire additional consultants, at any time. In fiscal 2017, FW Cook supported the Compensation Committee by (i) attending Compensation Committee meetings, (ii) providing advice on the Company’s compensation programs, equity plan designs and compensation governance policies, (iii) preparing and presenting analyses on compensation levels, including competitive assessments of the Company’s practices and policies and (iv) assisting the Company in preparing compensation-related materials and disclosure as requested by the Company. FW Cook provided no other services to and received no other fees or compensation from the Company.

In June 2017, the Compensation Committee considered FW Cook’s independence and the existence of potential conflicts of interest with FW Cook, including by considering the factors prescribed by the NASDAQ listing rules and SEC rules. Based on such evaluation, the Compensation Committee determined that no conflict of interest exists.

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Named Executive Officer Compensation

Overview of Our Executive Compensation Program

The table below describes the objectives supported by each of the primary compensation elements, along with an overview of the key design features of each element.

Compensation Element
How it Supports Our
Compensation Philosophy
Key Features
Base Salary
Provides a level of fixed pay
appropriate to an executive’s role and
responsibilities
Minimum salaries for CEO, CFO and
General Counsel set in employment
agreements
Attracts and retains executives
Reviewed annually and may be
adjusted as appropriate by the
Compensation Committee
Annual Cash Incentive
Incentivizes and rewards achievement
of operational and strategic goals and
superior individual performance
Two-thirds of annual opportunity is
based on achievement of adjusted
Total Segment EBITDA performance
Links executives’ interests to annual
operating strategies
One-third of annual opportunity is
based on achievement of individual
objectives
Long-Term Incentive Award
Rewards long-term value creation
based on achievement of specified
performance goals
Awarded as PSUs under the LTIP
Payout range of 0-200% of target
Three-year performance
measurement period
Aligns executives’ interests with
those of our stockholders
80% of award based on achievement
of cumulative adjusted EPS and
cumulative adjusted FCF targets
Strong retention tool
 
 
20% of award based on the
Company’s TSR relative to the TSR of
the S&P 500

Fiscal 2017 Pay Mix

The Compensation Committee designed the fiscal 2017 executive compensation program so that the performance-based pay elements (Annual Cash Incentive and long-term incentive awards) comprised a significant portion of TDC in support of the Compensation Committee’s objective to align the NEOs’ interests with those of our stockholders.


* Numbers may not sum due to rounding.
** Mr. Singh’s employment as CFO terminated effective March 1, 2017. As a result, his actual compensation for fiscal 2017 has been agreed upon pursuant to the terms of his separation agreement. For details, see “Executive Compensation—Potential Payments upon Termination—Summary of Bedi Ajay Singh’s Separation Agreement.”

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Base Salary

The Compensation Committee, in conjunction with its compensation consultant, annually reviews the NEOs’ base salaries and makes appropriate adjustments subject to the terms of individual employment agreements. The respective employment agreements of Messrs. Thomson and Pitofsky and Ms. Panuccio provide for a minimum base salary. Prior to his departure as CFO, Mr. Singh’s employment agreement provided for a minimum base salary as well.

Base salaries for Messrs. K.R. Murdoch, Thomson and Pitofsky were not increased in fiscal 2017 and remained at $1,000,000, $2,000,000 and $950,000, respectively. Mr. Singh’s base salary for fiscal 2017 until his departure as CFO on March 1, 2017 was $1,300,000. Messrs. Thomson’s and Pitofsky’s and, prior to his departure as CFO, Mr. Singh’s fiscal 2017 base salaries represented the minimum base salaries provided for in their respective employment agreements. Effective upon her appointment as CFO on March 1, 2017, Ms. Panuccio’s base salary was increased to $1,100,000, representing the minimum base salary provided for in her employment agreement, to reflect her promotion to CFO and the accompanying increased responsibilities.

Performance-Based Incentive Compensation

In order to promote alignment with stockholders’ interests, the majority of each NEO’s compensation is tied to two performance-based incentive components: the Annual Cash Incentive and long-term incentive awards, which we grant in the form of

PSUs. Metric targets for both of these compensation components are designed to be set at challenging, yet reasonably achievable, levels each year in order to motivate a high degree of performance and the assumption of an appropriate amount of risk, while maintaining focus on the Company’s long-term growth.

Fiscal 2017 Annual Cash Incentive

In August 2016, the Compensation Committee approved a framework for the NEOs’ Annual Cash Incentive for fiscal 2017. The Compensation Committee believes the mix of quantitative and qualitative factors on which the Annual Cash Incentive is based motivates the NEOs to achieve the critical operating goals of the Company’s businesses, while also recognizing and rewarding them for individual contributions.

Annual Cash Incentive awards are based two-thirds on achievement of target adjusted Total Segment EBITDA, and one-third on a qualitative assessment of individual performance. Adjusted Total Segment EBITDA was selected as the financial performance metric because it reflects the Company’s key financial objective for the operations for which the NEOs have direct responsibility. The Compensation Committee also considers, based on a recommendation from the Audit Committee, management’s performance on ethics and compliance objectives, and determines whether, based on such performance, any reduction to the qualitative portion of the payout of the Annual Cash Incentive is appropriate and if so, the amount of such reduction.

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In August 2016, the Compensation Committee approved the following target and maximum amounts for the fiscal 2017 Annual Cash Incentive:

 
Fiscal 2017 Annual Cash Incentive
Named Executive Officer(a)
Target
Maximum
K. Rupert Murdoch
$
2,000,000
 
$
4,000,000
 
Robert J. Thomson
$
4,000,000
 
$
8,000,000
 
David B. Pitofsky
$
750,000
 
$
1,500,000
 
Bedi Ajay Singh
$
2,000,000
 
$
4,000,000
 
(a) Mr. Singh’s employment as CFO terminated effective March 1, 2017. As a result, he did not receive a payout pursuant to the terms of the Annual Cash Incentive and his actual compensation for fiscal 2017 has been agreed upon pursuant to the terms of his separation agreement. For details, see “Executive Compensation—Potential Payments upon Termination—Summary of Bedi Ajay Singh’s Separation Agreement.” Ms. Panuccio’s fiscal 2017 target Annual Cash Incentive was set prior to her appointment as CFO and was not subject to the framework applicable to the other NEOs’ Annual Cash Incentive. See below for further details regarding her fiscal 2017 Annual Cash Incentive.

For fiscal 2017, the Compensation Committee set a target range for adjusted Total Segment EBITDA of $861.7 million to $952.4 million, based on the Company’s annual plan. A target range, rather than a specific goal, is used to address challenges associated with setting performance goals with precision and to avoid unintended windfalls and shortfalls in actual payouts to the NEOs. Performance within the target range generates a payout of 100% for the quantitative portion of the Annual Cash Incentive, with performance that falls within the specified performance range to be interpolated on a linear basis. The Company’s actual performance versus the performance curve established by the Compensation Committee is set forth below:

Adjusted Total Segment EBITDA


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The Compensation Committee also considered each individual NEO’s significant and numerous contributions and strong leadership in the development and implementation of the corporate vision, strategy and organizational structure for the Company’s businesses. In assessing our NEOs’ performance and determining the appropriate award amounts, the Compensation Committee acknowledged the following specific achievements:

Named Executive Officer*
Fiscal 2017 Achievements and Contributions
K. Rupert Murdoch
Executive Chairman
Company achieved EBITDA target and continues to drive growth strategy
Company continues to gain market share as a leader in the digital real estate category
Company capitalized on opportunities to increase its audience and digital content production capabilities through strategic acquisitions and partnerships
Robert J. Thomson
Chief Executive Officer
Demonstrated exceptional leadership enabling the Company to achieve 100% of EBITDA target in spite of increasingly challenging macro environment for print advertising
Established News Corporation as global thought leader in the critical areas of intellectual property and monetization of content in the digital age, with a particular focus on prohibiting the dilution of the value of premier journalism. Successfully mobilized the industry and regulators to engage on this topic
Continued to drive growth strategy in digital real estate category with REA expanding market share and realtor.com® delivering record traffic with 58 million average monthly unique users in the fourth quarter of fiscal 2017
Achieved smooth transition of critical executive management roles for both the Chief Financial Officer and Chief Technology Officer roles
Led successful acquisition of Wireless Group, significantly growing the content capability and audience for the Company in the U.K.
Continued to deliver results on digitization strategy and achieved a significant milestone with WSJ digital paid subscribers exceeding print paid subscriptions for the first time
Ensured the Company maintained rigorous and disciplined focus on costs by launching transformation initiatives in the newsrooms including the WSJ2020 program focused on delivering a mobile-first newsroom that is positioned for growth
Led complex negotiations with Telstra Corporation Limited (“Telstra”), resulting in the parties’ announcement of their intention to combine Foxtel and FOX SPORTS Australia into a new company, to be owned 65% by News Corporation and 35% by Telstra
David B. Pitofsky
General Counsel
Oversaw and actively managed global litigation docket including civil lawsuits arising out of U.K. newspaper matters and antitrust litigation brought by competitor against News America Marketing
Managed reallocation of internal and external legal resources to address growing focus on global privacy and competition issues, particularly rising out of anticompetitive behavior by dominant distribution platforms
Oversaw legal and compliance effort around acquisitions and divestitures, including post-acquisition integration
Designed and implemented global, multi-disciplinary review of the Company’s compliance framework and resulting enhancement of procedures with heightened focus on risk-based methodologies
* As noted above, Mr. Singh’s employment as CFO terminated effective March 1, 2017. As a result, he did not receive a payout pursuant to the terms of the Annual Cash Incentive as his actual compensation for fiscal 2017 has been agreed upon pursuant to the terms of his separation agreement. For details, see “Executive Compensation— Potential Payments upon Termination—Summary of Bedi Ajay Singh’s Separation Agreement.”

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To determine the fiscal 2017 Annual Cash Incentive for the eligible NEOs, the Compensation Committee recognized that the Company’s adjusted Total Segment EBITDA, for the purposes of this calculation, was approximately $864.8 million and as a result, 100% of the quantitative portion of the Annual Cash Incentive was achieved. In light of this achievement and the individual accomplishments described above, the Compensation Committee determined to award fiscal 2017 Annual Cash Incentives to the eligible NEOs as set forth below:

Named Executive Officer
Fiscal 2017
Target Annual
Cash Incentive
Quantitative Performance
Qualitative Performance
Fiscal 2017
Total Annual
Cash Incentive
66.7% of
Target
Multiple
Subtotal A
33.3% of
Target
Multiple
Subtotal B
K. Rupert Murdoch
$
2,000,000
 
$
1,333,333
 
 
100
%
$
1,333,333
 
$
666,667
 
 
100
%
$
666,667
 
$
2,000,000
 
Robert J. Thomson
$
4,000,000
 
$
2,666,667
 
 
100
%
$
2,666,667
 
$
1,333,333
 
 
100
%
$
1,333,333
 
$
4,000,000
 
David B. Pitofsky
$
750,000
 
$
500,000
 
 
100
%
$
500,000
 
$
250,000
 
 
100
%
$
250,000
 
$
750,000
 

Ms. Panuccio’s fiscal 2017 target Annual Cash Incentive was set prior to her appointment as CFO. The payout of her fiscal 2017 Annual Cash Incentive was determined by considering such fiscal 2017 Annual Cash Incentive target, Ms. Panuccio’s mid-fiscal year promotion to the role of CFO of the Company and applicable performance factors, including the following specific achievements:

Named Executive Officer
Fiscal 2017 Achievements and Contributions
Susan Panuccio
Chief Financial Officer
Led the budget process, enabling the Company to establish appropriate financial performance metrics for fiscal 2018
Facilitated long-range planning strategy sessions with the CEOs and executive management to identify key initiatives that will drive growth and critical transformation of our business model
Led smooth transition of critical year-end financial processes to close out fiscal 2017 in accordance with regulatory and compliance guidelines

The Compensation Committee determined to award a fiscal 2017 Annual Cash Incentive of $661,412 to Ms. Panuccio. Ms. Panuccio’s Annual Cash Incentive for fiscal 2018 and beyond will be subject to the framework applicable to the other NEOs’ Annual Cash Incentive.

Fiscal 2017-2019 PSU Award

The Compensation Committee annually awards to the Company’s senior executives long-term performance-based equity awards, granted under the LTIP, consisting of PSUs that cliff vest on the August 15 or the closest business day following the August 15 (the “Vest Date”), subject to continued service through such date, subsequent to the completion of a three-fiscal-year performance measurement period (each such grant, a “PSU Award”). In August 2016, the Compensation Committee approved the grant of the fiscal 2017-2019 PSU Award to senior executives, including the NEOs.

Payouts are determined based on the achievement of the performance goals established by the Compensation Committee at the beginning of the three-year performance period. The performance

metrics and their respective weightings for the fiscal 2017-2019 PSU Award are as follows:

40% based on cumulative adjusted EPS;
40% based on cumulative adjusted FCF; and
20% based on the Company’s three-year TSR as measured against the three-year TSR of the S&P 500.

At the beginning of each performance period, the Compensation Committee determines the target PSU Award opportunity, expressed as a dollar value (the “PSU Target Value”), for each of the NEOs. The PSU Target Value is converted to a target number of PSUs (the “PSU Target”), which, for the fiscal 2017-2019 PSU Award, was based on the volume-weighted average price of the Company’s Class A Common Stock for the last 20 trading days in fiscal 2016.

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Subsequent to the completion of each performance period, the Compensation Committee compares the actual results of the Company’s performance against the targets set by the Compensation Committee and determines the “Final PSU Award” for each NEO, using the following formula:


On the Vest Date, Messrs. K.R. Murdoch and Thomson and Ms. Panuccio each are expected to receive, in settlement of his or her respective Final PSU Award, a cash payment equal to his or her respective Final PSU Award multiplied by the closing price of the Class A Common Stock on the last trading day immediately prior to the Vest Date, net of taxes withheld, subject to the limitations set forth in the LTIP. On the Vest Date, Messrs. Pitofsky and Singh each are expected to receive, in settlement of his respective Final PSU Award, shares of Class A Common Stock, net of taxes withheld, subject to the limitations set forth in the LTIP. PSUs awarded to Messrs. K.R. Murdoch and Thomson are settled in cash rather than stock pursuant to the Company’s policy of settling Directors’ equity awards in cash to address certain requirements of the Australian Securities Exchange (the “ASX”). PSUs awarded to Ms. Panuccio while she was serving in her previous role as Chief Financial Officer of News Corp Australia are settled in cash rather than stock pursuant to the Company’s policy of settling equity awards to employees in certain countries in cash to address certain requirements of local laws.

Accordingly, all of the NEOs’ PSU payouts are fully at risk for financial performance for the three-year performance period and for stock price performance from the grant date until the Vest Date.

The Compensation Committee approved the following PSU Target Values and corresponding PSU Targets for the NEOs’ fiscal 2017-2019 PSU Award:

Named Executive Officer
Fiscal 2017-2019 PSU Award Opportunity
PSU Target Value
PSU Target
K. Rupert Murdoch
$
2,000,000
 
 
174,861
 
Robert J. Thomson
$
5,000,000
 
 
437,154
 
Susan Panuccio(a)
$
427,225
 
 
37,352
 
David B. Pitofsky
$
800,000
 
 
69,944
 
Bedi Ajay Singh(b)
$
2,200,000
 
 
192,348
 
(a) Ms. Panuccio’s fiscal 2017-2019 PSU Award was granted prior to her appointment as CFO.
(b) Mr. Singh’s employment as CFO terminated effective March 1, 2017. As a result, his actual compensation for fiscal 2017 has been agreed upon pursuant to the terms of his separation agreement. For details, see “Executive Compensation—Potential Payments upon Termination—Summary of Bedi Ajay Singh’s Separation Agreement.”

The Compensation Committee determined to grant dividend equivalents on PSUs, beginning with the fiscal 2017-2019 PSU Award, in order to further align our executive compensation with total return to stockholders. Such dividend equivalents are represented by additional PSUs, are subject to the same performance conditions as the underlying award, and are payable when, and only to the extent that, the underlying award vests.

Payout of Fiscal 2015-2017 PSU Award

In August 2014, the Compensation Committee approved the grant of the fiscal 2015-2017 PSU Award. The payout of the fiscal 2015-2017 PSU Award was based on the achievement of performance goals established by the Compensation Committee at the time of grant relating to the three-year performance period ending on June 30, 2017. The performance metrics and their respective weightings for the fiscal 2015-2017 PSU Award were as follows:

40% based on cumulative adjusted EPS;

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40% based on cumulative adjusted FCF; and
20% based on the Company’s three-year TSR as measured against the three-year TSR of the S&P 500.

In August 2017, the Compensation Committee reviewed the Company’s performance against targets for the fiscal 2015-2017 PSU Award. Performance within the target range generates a payout of 100% for the cumulative adjusted EPS and cumulative adjusted FCF metrics, with performance that falls within the specified performance range to be interpolated on a linear basis. The Company’s actual performance versus the performance curve established by the Compensation Committee for each metric is set forth below:


Based on such performance, the Compensation Committee determined a final payout multiplier on the fiscal 2015-2017 PSU Award of 61.4%, as set forth below:

Metric
Metric Weighting
Target (Range)
Achieved
Payout Multiplier
 
 
 
Cumulative Adjusted EPS
40%
$1.97 – $2.41
$1.53
19.9%
 
 
Cumulative Adjusted FCF
40%
$1.685 – $2.060 billion
2.088 billion
41.5%
 
 
Relative TSR Percentile
20%
50th
16th
0%
 
 
 
 
 
 
61.4%
 
 

The payout multiplier applied to the target number of shares granted resulted in the vesting on August 15, 2017 of the number of shares for each NEO indicated below:

Named Executive Officer
Fiscal 2015-2017 PSU Award Payout
PSU Target
Payout Multiplier
Final PSU Award
K. Rupert Murdoch
 
113,746
 
 
61.4
%
 
69,840
 
Robert J. Thomson
 
244,555
 
 
61.4
%
 
150,156
 
Susan Panuccio(a)
 
22,500
 
 
61.4
%
 
13,815
 
David B. Pitofsky(b)
 
22,749
 
 
61.4
%
 
13,967
 
Bedi Ajay Singh(c)
 
90,997
 
 
61.4
%
 
55,872
 
(a) Ms. Panuccio’s fiscal 2015-2017 PSU Award was granted prior to her appointment as CFO.
(b) Mr. Pitofsky’s fiscal 2015-2017 PSU Award was granted prior to his appointment as General Counsel.
(c) Mr. Singh’s employment as CFO terminated effective March 1, 2017. His fiscal 2015-2017 PSU Award continued to vest in accordance with its terms pursuant to the terms of his separation agreement. For details, see “Executive Compensation—Potential Payments upon Termination—Summary of Bedi Ajay Singh’s Separation Agreement.”

Retirement Benefits

Prior to the separation of the Company’s businesses from its former parent, 21st Century Fox (the “Separation”), Messrs. Thomson and Singh and Ms. Panuccio participated in certain U.S.-qualified, U.K.-registered (qualified) and/or U.K. unfunded

nonqualified defined benefit plans in connection with services rendered to 21st Century Fox. The liabilities for these benefits have been assumed by the Company, and as of the Separation, there are no further accruals under these arrangements. For additional information on these arrangements,

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please see the “Pension Benefits Table” and its accompanying footnotes, and “Description of Pension Benefits” below. Mr. K.R. Murdoch continues to participate in the 21st Century Fox retirement plans following the Separation, and does not participate in the Company’s retirement plans.

The Company provides retirement benefits in the form of a 401(k) plan as well as the NC Transaction, Inc. Restoration Plan (the “Restoration Plan”), a nonqualified unfunded defined contribution retirement plan maintained for the benefit of certain management and other highly compensated employees of the Company, including the CEO, CFO and General Counsel. The Restoration Plan provides participants with retirement benefits which would have become payable under the Company’s traditional qualified retirement plans but for

limitations imposed by the Code. For additional information on the Restoration Plan, please see the “Nonqualified Deferred Compensation Table” and its accompanying footnotes, and “Description of Restoration Plan” below.

Perquisites

The NEOs are provided with limited perquisites and other personal benefits that the Compensation Committee feels are reasonable and consistent with the Company’s overall compensation philosophy. Perquisites constitute a small percentage of each NEO’s total compensation package. The perquisites received by each NEO in fiscal 2017 are reported as required in the “Summary Compensation Table” and its accompanying footnotes.

Comparative Market Data and Industry Trends

The Compensation Committee considers compensation data and practices of a group of peer companies (the “Peer Group”), as well as current market trends and practices generally, in developing competitive and appropriate compensation packages for the NEOs. The Compensation Committee believes that, in order to attract and retain top executives with the requisite skills and experience to successfully manage the Company’s businesses, our executives’ compensation packages must be competitive, particularly relative to the Peer Group. The Compensation Committee considers both individual elements of compensation and total compensation of companies in its Peer Group. Given the diverse nature of the Company, which is comprised of

businesses in multiple industries and markets, the Compensation Committee believes that strict “benchmarking” against the Peer Group does not provide a broad enough view for establishing executive compensation and it does not set compensation targets for the NEOs at a specific percentile of the Peer Group.

The Compensation Committee, with advice from its compensation consultant, annually reviews the Peer Group and may update its composition to better reflect the Company’s competitive landscape or, if necessary, to account for any corporate changes, including acquisitions and dispositions. Given the breadth of our business operations globally, it is challenging to find directly comparable companies.

In April 2016, the Compensation Committee, with advice from its compensation consultant, reviewed the current Peer Group and determined that it continued to serve as a reasonable benchmark for executive compensation levels and practices. Therefore, the Company’s fiscal 2017 Peer Group was unchanged from fiscal 2016. The fiscal 2017 Peer Group consisted of the Companies listed below:

Fiscal 2017 Peer Group
Cablevision Systems Corporation
Liberty Global plc
CBS Corporation
Netflix, Inc.
Charter Communications, Inc.
Omnicom Group Inc.
Discovery Communications, Inc.
Sirius XM Holdings Inc.
DISH Network Corporation
TEGNA Inc.
iHeartMedia, Inc.
Viacom Inc.
The Interpublic Group of Companies, Inc.
Yahoo! Inc.

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Throughout fiscal 2017, there was significant merger and acquisition activity within the Company’s fiscal 2017 Peer Group. In April 2017, following an in-depth review of the fiscal 2017 Peer Group, the Compensation Committee, with advice from its compensation consultant, adopted a new Peer Group for fiscal 2018, as reflected in the table below, to better reflect the Company’s competitive landscape. The Company’s Peer Group for fiscal 2018 was designed to generally comprise:

Companies with significant content production operations, including online/digital, print and television;
Companies of a similar size, based on revenue and/or market capitalizationfor fiscal 2018, the Peer Group includes companies with revenues ranging from one-third to three times the Company’s revenues and one-fifth to five times the Company’s market capitalization;
Competitors for key executive level talent;
Companies within the same General Industry Classification Standards (GICS) code as the Company; and
Companies identified as the Company’s peers by proxy advisory firms.
Fiscal 2018 Peer Group
CBS Corporation
Liberty Global plc
Daily Mail and General Trust plc
Netflix, Inc.
Discovery Communications, Inc.
Omnicom Group Inc.
DISH Network Corporation
Scripps Network Interactive, Inc.
IAC/InterActiveCorp
Sirius XM Holdings Inc.
iHeartMedia, Inc.
TEGNA Inc.
The Interpublic Group of Companies, Inc.
Viacom Inc.

Severance Arrangements

Messrs. Thomson and Pitofsky and Ms. Panuccio are each party to a negotiated employment agreement with the Company or a subsidiary of the Company which provides for certain payments and benefits upon his or her separation from the Company. Mr. K.R. Murdoch is party to a letter agreement that contains termination provisions relating to Annual Cash Incentives and long-term incentive awards. Such employment agreements and their provisions relating to severance arrangements are more fully described in the sections titled “Executive Compensation—Employment Agreements” and “Executive Compensation—Potential Payments upon Termination.” None of the NEOs’ employment agreements contains provisions that provide benefits that are triggered in whole or in part solely by a change in control of the Company (i.e., the agreements do not provide automatic single trigger benefits).

In addition, in connection with his departure as our CFO, the Company and Mr. Singh entered into a separation agreement, effective as of March 1, 2017, pursuant to which Mr. Singh's employment with the Company was terminated without cause. The

separation agreement contains a customary release of claims and provides for certain payments and benefits. These payments are subject to Mr. Singh's compliance with confidentiality, non-disparagement and non-solicitation covenants contained in the separation agreement. In addition, Mr. Singh and the Company entered into an agreement pursuant to which Mr. Singh provided consulting services to the Company for a term of six months at a rate of $12,500 per month. For additional details, see “Executive Compensation—Potential Payments upon Termination.”

The Company believes that providing appropriate severance benefits helps to attract and retain highly qualified executives by mitigating the risks associated with leaving a previous employer and accepting a new position with the Company and by providing income continuity following an unexpected termination. These arrangements also allow the Company to protect its interests through corresponding confidentiality, non-competition and other restrictive covenants in the event of an executive’s termination.

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Stock Ownership Guidelines for Executive Officers

The Compensation Committee has adopted stock ownership guidelines for the CEO, CFO and General Counsel, which require each such executive officer to maintain a substantial stake in the Company. The CEO’s stock ownership guideline is five times base salary, the CFO’s stock ownership guideline is two times base salary and the General Counsel’s stock ownership guideline is one times base salary. The stock ownership guidelines include unvested awards and count both cash-settled and stock-settled awards

toward the applicable ownership requirements. Each executive officer will have five years from the later of July 1, 2013 or the date of commencement of the executive officer’s employment in such role in which to comply with the ownership requirement. The CEO and General Counsel have each achieved his respective requirement, and the CFO (who was appointed in March 2017) is on track to achieve her requirement.

Clawback Policies

The Board has adopted policies requiring the recoupment of performance-based cash and equity compensation paid to the NEOs in the event of certain financial restatements or of other bonus

compensation in certain other instances. The policies require reimbursement, to the extent permitted by governing law and any employment arrangements entered into prior to the adoption of the policies.

Prohibition on Hedging and Pledging of News Corporation Stock

The Company prohibits all Directors and employees, including the NEOs, from engaging in short sales of the Company’s securities and investing in derivative securities, including options, warrants, SARs or similar rights, whose value are derived from the value of the Company’s common stock. This prohibition includes, but is not limited to, trading in Company-based put or call option contracts, trading in straddles and similar instruments designed to

offset the risks of ownership of the Company’s common stock. However, holding and exercising employee stock options, RSUs or other equity-based awards granted under the Company’s equity compensation plans are not prohibited. Executive officers and Directors are also prohibited from pledging any Company securities that they hold directly or have received as equity compensation.

Compensation Deductibility Policy

In approving compensation arrangements, the Compensation Committee takes into account Section 162(m) of the Code, which generally limits to $1 million the U.S. federal tax deductibility of compensation paid in one year to the NEOs (other than, pursuant to Internal Revenue Service pronouncements, the CFO). However, the Compensation Committee reserves the flexibility to take actions that may be based on considerations other than tax deductibility pursuant to Section 162(m) of the Code for performance-based compensation. The Compensation Committee believes that stockholder interests are best served by

not restricting the Compensation Committee’s discretion and flexibility in crafting compensation programs, even if such programs may result in certain non-deductible compensation expenses. Accordingly, the Compensation Committee may choose to approve components of compensation for certain officers that are not deductible. In addition, the rules and regulations promulgated under Section 162(m) of the Code are complicated and may change from time to time, sometimes with retroactive effect. As a result, even compensation intended to qualify as performance-based compensation under Section 162(m) of the Code may not so qualify.

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REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors 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 this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017.

THE COMPENSATION COMMITTEE:

Masroor Siddiqui (Chair)
Natalie Bancroft
Peter L. Barnes

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 2017, the Compensation Committee consisted of the following Non-Executive Directors: Masroor Siddiqui (Chair), Peter L. Barnes and Natalie Bancroft. The Board has determined that Ms. Bancroft

and Messrs. Siddiqui and Barnes 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 compensation policies and practices of the Company and its subsidiaries. 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 significant 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 NEOs’ bonus compensation in the event of certain financial restatements or certain other instances.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information with respect to total compensation for the fiscal years ended June 30, 2017, June 30, 2016 and June 30, 2015, respectively, for the Company’s NEOs.

Name and Principal
Position
Fiscal
Year
Salary(a)
Bonus
Stock
Awards(b)
Non-Equity
Incentive Plan
Compensation
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(c)
All Other
Compensation(d)
Total
K. Rupert Murdoch
 
2017
 
$
1,000,000
 
$
 
$
2,682,668
 
$
2,000,000
 
$
 
$
 
$
5,682,668
 
Executive Chairman
 
2016
 
$
1,019,231
 
$
 
$
2,191,949
 
$
2,133,333
 
$
 
$
 
$
5,344,513
 
 
 
2015
 
$
1,000,000
 
$
 
$
2,067,675
 
$
2,000,000
 
$
 
$
 
$
5,067,675
 
Robert J. Thomson
 
2017
 
$
2,000,000
 
$
 
$
6,706,704
 
$
4,000,000
 
$
473,630
 
$
407,593