Investors act over BSkyB top job

POWERFUL City shareholders have stepped into the argument about British Sky Broadcasting's succession by warning independent directors they must make their own choice of the satellite TV group's next chief executive.

Their move emerged as Tony Ball said he will leave after four years in the top job, having collected possibly up to £44m.

His departure could clear the way for Sky chairman Rupert Murdoch to install his younger son James. Murdoch's News Corporation owns 35.4% of Sky.

The Association of British Insurers, which convened the meeting between ten of the City's top investors and several of Sky's independent directors, said: 'We told them this process must be rigorous and objective.'

Shareholders worry that Murdoch junior's appointment could help his father funnel BSkyB's now strong profits into other projects instead of rewarding them for their long-term support.

These fears have knocked the shares from a high of 724p in August, when talk of James Murdoch's appointment first emerged. They closed last night up 17 1/2p at 639p.

The Sky directors charged with choosing the new boss include former Cabinet minister Lord St John of Fawsley, Goldman Sachs banker John Thornton, Royal Mail boss Allan Leighton and Gail Rebuck, chairman of publisher Random House.

Highly regarded Ball, who presided over the costly transition to a digital network and a doubling in subscribers to almost 7m, could get two years salary and bonus, worth £5m.

Under Sky's incentive and bonus plans, he may also be entitled to a further £10m of shares. This would come on top of salary and bonuses to date of more than £29m.

Ball is expected to leave soon, but remain available to give advice until May 2004.

He said: 'I have enjoyed my time at Sky enormously. I leave with many happy memories.'

Sky would not comment on the meeting nor the terms of Ball's severance.