BSkyB finance chief takes ?4m exit

Martin Stewart is to quit as BSkyB's chief financial officer, three months after losing out to James Murdoch as head of the satellite company.

Mr Stewart is likely to gain at least £4m as part of a non-compete package agreed with the Rupert Murdoch-controlled media business when he stands down in the summer, or sooner if a replacement is found before then.

Using current market rates, Mr Stewart will gain about £3.8m from his remaining share award schemes as well as at least a year's salary of £400,000. He could also receive any bonus accruing. Sky would not comment on the details of any payment, which will be outlined in the annual report later in the year.

Like the former chief executive, Tony Ball, Mr Stewart is no stranger to a fat pay packet. Last year, he banked £4.2m under a company incentive plan on top of a £924,750 salary and bonus.

Yesterday, he said: "I have been privileged to work at Sky in a uniquely fascinating phase of its development during which it has evolved from an analogue product to the UK's leading digital platform with over seven million customers.

"After eight years of service to BSkyB, it is now the right time for me to pursue new opportunities."

James Murdoch said Mr Stewart had "played an enormous role in the success of Sky". Few industry analysts were surprised at the departure yesterday.

Although Mr Stewart publicly described himself as "very happy" to stay at the company at last year's annual meeting, he is understood to have made no secret of his disappointment in not getting the top job last November.

Rupert Murdoch is thought to have been less than impressed by reports that he hired his own public relations outfit to further his ambitions for the job.

One analyst, who refused to be named, said: "He was the only internal candidate who seriously thought he had a chance of winning."

Another analyst called his departure after eight years mildly negative as it reignited fears over the appointment of Rupert Murdoch's son and its effect on the company's management team.

Shares in the company fell 13p to 739p, or just over 1%, in a weak market.

In a note to investors, Marc Sugarman, an analyst at Goldman Sachs, wrote: "While the resignation of Mr Stewart is negative given his experience, the group's depth of talent across divisions reduces reliance on any single individual."

Although the appointment of Mr Murdoch's youngest son caused consternation last year, there was little support for Mr Stewart's candidacy. One analyst said finance directors did not have a good track record as chief executives in the industry.

BSkyB's chief operating officer, Richard Freudenstein, and the sales and marketing director, Jon Florsheim, also put their names forward for the top job last year. The former was reported to have been given a loyalty bonus along with Dawn Airey, Sky's managing director, once James Murdoch was confirmed as chief executive.

One company insider said Mr Stewart's departure probably strengthened the position of Mr Freudenstein within the company.

Mr Stewart joined Sky as group financial controller from media group Polygram. He became finance director in May 1998.

Mr Ball, whose departure with a £1.7m golden goodbye last year caused investor outrage, is understood to be weighing up private equity investments as well as seats on non-media boards. He is also spending time on his olive farm near Barcelona. In his four years as chief executive Mr Ball earned £30m, which made him one of Britain's highest paid executives.

BSkyB reports its interim results next week.