Aug. 5 (Bloomberg) -- Employees of News of the World, the News Corp. Sunday tabloid closed amid a phone-hacking scandal, will get salary increases of as much as 3 percent that will be paid out through the rest of their severance period, according to two people familiar with the situation.
The raises, which take effect Sept. 1, are based on performance and range from nothing to as much as 3 percent, according to an e-mailed memo obtained by Bloomberg News. The increases are part of a compensation agreement for newspapers run by News Corp.’s News International unit in the U.K.
News Corp. was forced to close the 168-year-old News of the World after revelations that the paper hacked into the phone of a murdered school girl. The scandal has led to at least 11 arrests, including former News of the World editors Rebekah Brooks and Andy Coulson.
“The past few months have been some of the most turbulent in the company’s long history,” News International Chief Executive Officer Tom Mockridge said in the e-mail. “I want to thank each of you who have remained focused on your job, your customers and your readers throughout this difficult period.”
While the memo didn’t mention News of the World, the tabloid’s former employees will be eligible for the pay increases, said the people, who declined to comment because personnel matters are private. Journalists at other News International titles including the Sun, the Times and the Sunday Times will also get the raises.
News International declined to immediately comment. Some News International staff may also receive bonuses of between 200 pounds ($325) and 1,400 pounds, according to the memo.
Brooks, who was then chief executive officer of News International, said July 8 that News Corp. would try to find jobs for the 200 employees and that they would be paid for three months. She stepped down as News International CEO a week later.
Openings include one for a materials manager for Fox television’s theatrical departments division in Siberia, 74 positions globally at Dow Jones & Co. and about 30 each at publisher HarperCollins and about 30 at Fox. News International has 50 openings, three people with knowledge of the matter said last month.
Employees are pushing for a bigger payoff because of the way the newspaper was suddenly shuttered, two people familiar with matter told Bloomberg last month.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
News Corp., controlled by Rupert Murdoch, is struggling to move past the phone-hacking scandal, which also caused it to drop a 7.8 billion pound bid for the remaining 61 percent of British Sky Broadcasting Group Plc it doesn’t already own.
Mockridge, who joined News International from Sky Italia to replace Brooks, praised the company’s the success in the past year, saying it had won 70 industry awards across “every area of our business.”
“Please continue to work hard and be proud of what we achieve every day,” he wrote. “We produce some of the best quality journalism in the world and that has not changed.”
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