I am not commenting on anything to do with Japan or Mick Karn or the whole royalty thing for that particular band.
However, rest assured that whoever registers the writing credit (melody and words) gets the £. It does not matter if the song contains the greatest drum fill in the history of the world or the most fabulous guitar solo ever. The £ goes to the registered writer of the melody and words. End of. How they choose to move the money around is legally their decision. You can bet that a lot of lawyers have made a lot of money arguing the minutiae in court (don't they always), but it is melody and words and nothing else.
Is this artistically correct? Probably not.
Does this recognise the contribution the whole band make to the whole band? No.
Does it seem fair? No.
Is it how it is? Yes.
There are really good reasons for people being involved with the MU. If you are a member then any contracts you sign are vetted by very expensive lawyers on an MU retainer. For nothing.
We are beyond naive if we think the music industry is fair. Why do Led Zep not get it together? Page and Plant are still fighting about money (allegedly). The industry is not about talent, it is about knowing how to milk the income streams. That is obviously not what music is about for a lot of us, but it is PRECISELY what the Music Industry is about. We owe it to the younger generation to make that clear at all possible opportunities. I wish I knew this when I was 16.
U2 split their royalties 5 ways (20% for their manager). That seems fair.
To veer back onto topic, Mick Karn had lush tone. Grant, how anyone can use the words "Bryan Ferry" and "singing" in the same sentence is beyond me