Business, Economics and Jobs

With News Corp. resignations come hefty severance packages

As the hacking scandal at Rupert Murdoch's News Corp. continues to unfold and the blood-letting accelerates with high-level resignations, details are emerging about the severance packages that are expected to be paid out to executives who have stepped down.

Murdoch lost two of his trusted lieutenants on Friday, the same day that the scandal crossed the Atlantic to the United States, with the FBI saying it was investigating allegations that British journalists hacked into the phones of victims of the September 11 attacks in 2001.

Rebekah Brooks, the CEO of News International, parent company of the British News of the World tabloid that is at the center of the hacking allegations, was the first to resign Friday. Then Les Hinton, a close Murdoch confidant and the chief executive of Dow Jones, publisher of Murdoch's jewel in the crown, the Wall Street Journal, stepped down because of his tenure at the helm of News International from 1997 to 2005, a time period when much of the phone hacking was going on.

(Read more in GP: News boss Rebekah Brooks resigns over phone hacking scandal and Dow Jones CEO resigns amid phone-hacking scandal)

Before that, the final editor of News of the World, Colin Myler, had taken his leave, as had two of the company's longtime lawyers, Jon Chapman and Tom Crone.

Brooks and Hinton resigned at the end of a week when Murdoch had shut down the News of the World, putting several hundred employees in limbo.

Now, the Independent is reporting that there will be lucrative golden handshakes involved in the departures, with the severance payouts involved totaling, as of now, about $14 million, according to estimates by senior colleagues. And that's not including what is bound to be a healthy severance package for Hinton, a longtime close associate of Murdoch.

The Daily Mail says that Brooks, who was editor of the News of the World at the time of some of the most serious hacking allegations, is in line to receive more than $5.5 million. Myler is slated to get more than $3 million, while the two lawyers, Chapman and Crone, will each receive about $2.5 million.

As far as Hinton goes, according to the Daily Mail:

Les Hinton, 67, chief executive of Dow Jones, the U.S. arm of Murdoch's monopoly and publisher of the Wall Street Journal, became the most senior figure yet to resign last night.

And he too is expected to receive a hefty sum.

The terms of the severance packages have not been revealed publicly, but they reportedly include gag orders, which will prevent all of the players from talking about any inner workings of the company except at official inquiries and criminal proceedings, according to the Independent.

The healthy payouts contrast with the situation of about 200 News of the World employees who are waiting to hear what their future holds.

The Daily Mail reports:

The size of the figure will leave a nasty taste in the mouths of the journalists who blame her for losing heir jobs following the collapse of the News of the World.

Brooks, 43, had a close relationship with Murdoch, who reportedly regarded her as "another daughter," according to the Daily Mail. She started at News of the World as a secretary in 1989, and became the youngest editor ever of the newspaper in 2000. Then, early in 2003, she was appointed The Sun's editor, and in 2009, she rose to the chief executive spot at News International.

Brooks said during an investigation into privacy issues in March 2003 that the tabloid had bribed police officers to get information.

She had been under intense pressure to quit as News International's CEO when the allegations about the hacking gathered steam, according to GlobalPost. She reportedly offered her resignation last week, which at first was declined by Murdoch, and by his son, James. She will be replaced as News International's chief executive by Sky Italia's Tom Mockridge.

(More from GlobalPost in London: Rupert Murdoch being undone by old-fashioned journalism)