As expected the shareholder opposition to Rupert Murdoch and the Board of News Corp proved to be little more than noise and was just brushed aside at News Corp’s AGM held in Los Angeles yesterday. Some of the loudest “opposition” seems to be little more than public relations to justify a continued investment in News Corp and not really intended to effect any change.
Rupert Murdoch and kids
Business Week: News Corp declares victory over opponents
News Corp. said all 15 directors were elected at the meeting yesterday in Los Angeles, while a proposal to split Murdoch’s role as chairman and chief executive officer was rejected. The company failed to provide vote totals as it has in the past. Complete results will be filed with regulators early next week, according to a statement.
Murdoch promised at the meeting that final results would be filed with regulators that day. The outcome of a challenge to his dual role as chairman and chief executive was never much in doubt, given his 40 percent of the voting shares. A high percentage of votes against a continued board role for Murdoch, 80, and his sons, James and Lachlan, would be an embarrassment. ….
The elder Murdoch went into the meeting with at least 47 percent of the voting shares on his side, including Saudi Prince Alwaleed Bin Talal, who has voiced support. According to News Corp.’s proxy, 798.5 million Class B shares were eligible to vote. Of the total, Murdoch controls 317.3 million. The company owns the Fox broadcast network and the Wall Street Journal. News Corp. Class A shares, those most widely held, rose 2.1 percent to $17.20 at the close in New York yesterday. The shares, which represent about 70 percent of the economic interest, have no voting rights. The company has repurchased $1.71 billion worth since announcing a buyback in July. ….
Institutional Shareholder Services, or ISS, which advises more than 1,700 investors on governance issues, recommended voting against 13 of the 15 directors, including the Murdochs, citing a “lack of stewardship and failure of independence” by the board. The average amount of dissenting votes among S&P 500 companies is around 5 percent, according to ISS.
Hermes Equity Ownership Services also sought the ouster of Murdoch and his sons from the board. Two other advisers, Glass Lewis & Co. and Egan-Jones Proxy Service, recommended James, 38, and Lachlan, 40, be removed. Their concerns include a slow response to the phone-hacking scandal and executive compensation. ……
I cannot help but think that some of the so called “opposition” is merely noise – loud and much publicised – by institutional shareholders (such as ISS or Hermes or Christian Brothers Investment Services Inc. and Calpers, the U.S. pension fund). Their votes are of little relevance and their primary concern is to justify themselves and their shareholding in News Corp to their own investors and clients. Their “opposition” is little more than a public relations exercise directed to their own constituencies.
If their opposition was really serious they could vote with their feet – but they continue to remain invested in News Corp.
Tags: corporate governance, minority shareholders, News Corp AGM, News Corporation, Rupert Murdoch, shareholder opposition
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