Diller Aide at Fox Can Get $3.75 Million : Gordon’s 3-Year Deal Ensures That He’ll Be No.2 Executive

While 20th Century Fox Film Corp. continues to tantalize the movie industry by shielding the pay arrangements for its new chairman-chief executive, Barry Diller, a public document reveals that Lawrence Gordon, the Hollywood studio’s No. 2 man, has a 3-year pact that could pay him a total of at least $3.75 million.

And that doesn’t include bonuses that could make the total substantially higher.

Gordon, who also won the unusual contractural assurance of remaining second only to Diller in overseeing movie and TV production, is to receive $750,000 a year as salary, plus rights to another $1.5 million when his employment ends.

The pact, dated last Sept. 27, puts the one-time television writer in the still-exclusive million dollar club in Hollywood, joining a handful of top studio executives receiving that level of compensation yearly.

Stanfill Was First

Perhaps the first to achieve the distinction was Dennis Stanfill, whose incentive pay soared when he presided over the “Star Wars” box-office bonanza that enriched Fox in the late 1970s.

Meanwhile, the salary terms that Gordon received after Fox owner Marvin Davis hired Diller last fall may further whet the widespread curiosity over what kind of a deal Diller himself has obtained in signing on as chairman and chief executive.

The Diller regime is faced with the task of replacing a disastrous film production program at Fox that resulted in a $58-million loss from continuing operations last fiscal year.

There have been allegations in a recent lawsuit by Fox’s ousted No. 2 man Norman Levy that Davis gave Diller a 5% “ownership interest” in Fox, which Levy said he himself was promised by Davis but did not get.

Levy’s own salary was raised to $750,000 a year from $500,000 last September, shortly before he was ousted by the incoming Diller regime. His lawsuit said the company has failed to pay him a $500,000 end-of-term bonus under his old contract.

Meanwhile, the Securities and Exchange Commission said late last week that its staff lawyers have not ruled yet on Fox’s formal request to keep confidential the copy of Diller’s employment agreement submitted Nov. 8 as part of the firm’s Form 10Q quarterly financial report.

The agreement remains out of the public file pending such a ruling, which the company seeks under the general heading of “trade secrets,” the SEC has said.

Gordon’s employment contract was filed with the same 10Q--but without a request for confidentiality--and a copy of it has been obtained from the files in Washington.

Other Benefits

In addition to the $750,000 annual salary and $1.5 million end-of-term payment, the pact provides for the company to include Gordon in the “bonus and other employee benefit plans as Fox generally makes available to its senior executives.” Last year, incentive compensation for former Chairman Alan Hirschfield and Levy added several hundred thousand dollars to their fixed salaries, according to Fox’s 10K annual report filed late last November.

Hirschfield, who left the company last Sept. 15, received $936,000, including his base salary of $500,000 and bonus money in the fiscal year ended last Aug. 25. He also received the benefits of a $3-million, interest-free loan on his residence, which Fox calculated as costing the company another $357,021.

Levy received $1,001,200 total salary and bonus money in the same fiscal year.

Primary Responsibility

One provision in Gordon’s contract as president and chief operating officer of 20th Century Fox Entertainment Group is that he will report only to Fox’s chairman and the company will not employ anyone except the chairman whose responsibilities will be equal to or superior to Gordon’s in the feature and television divisions of Fox.

It is further agreed that Gordon will have primary responsibility over any new divisions that may come within the entertainment group.

The contract also provides that, if Fox gives notice of ending his employment as president and chief operating officer within 30 days after the end of three years, the company may pay him the $1.5 million. If Fox does not make that payment within another 30 days, Gordon may choose to renew his August, 1983, agreement with Fox as an independent producer.

Gordon’s guaranteed fee of $500,000 a year under the old production agreement would be raised to $750,000 a year for two years. Also, Gordon’s participation in gross receipts of pictures produced for Fox would be increased to 7.5% from 5%. Fox, however, could elect to pay the $1.5-million cash severance payment and end the production agreement.

The pact also calls for Fox to provide Gordon with a 500 Mercedes Benz, or the equivalent, and pay him $1,500-a-month rent for Fox’s use of his home screening room facilities.