LOS ANGELES, Calif. – News Corp. managed to avoid rowdy protests at its annual shareholders meeting Tuesday, but that didn’t stop stockholders from voicing complaints about the grip on the company held by founder and CEO Rupert Murdoch and his family.
Despite the opposition, the News Corp. board said three shareholder proposals to dilute the Murdochs’ control were defeated by a majority of voting shares.
Only Class B shareholders could vote and the Murdoch family controls nearly 40 per cent of them. That means it has a dominant say in the operations of the company, which owns media properties such as Fox News Channel and The Wall Street Journal, even though its stake amounts to 13 per cent of outstanding shares.
Some shareholders said they were upset at the lack of management accountability for the British phone hacking scandal that erupted last year, and registered significant protest votes.
This year’s gathering was more subdued, however, than a year ago, when protesters assembled outside following revelations made public in June 2011 that the company’s British tabloid News of the World regularly hacked into the phones of celebrities and crime victims in the hunt for scoops.
Still, Rupert Murdoch had a couple of testy exchanges with shareholders during the 81-minute meeting Tuesday on the 20th Century Fox movie studio lot in Los Angeles.
“There are plenty of media stocks to buy if they don’t like this one,” said Murdoch, who chaired the meeting and had just 3.5 per cent of votes cast against his re-election. “When you buy the stock you know what the company is. If you don’t like it, don’t buy the stock.”
The shareholder proposal that got the most support — at 30 per cent of the votes cast — would have mandated that the board chairman be independent, which would have stripped Murdoch of the title. The proposal was supported by about two-thirds of the votes cast when excluding the Murdoch family’s stake.
“While Mr. Murdoch claims that the interests of his family are in line with those of all shareholders, this vote proves that most independent shareholders would disagree,” said Julie Tanner, an assistant director at the motion’s co-sponsor, Christian Brothers Investment Services Inc.
Meanwhile, 28 per cent were cast in support of eliminating the division between voting and non-voting shares. That also was about two-thirds of the non-Murdoch votes.
Laura Shaffer Campos, director of shareholder activities for The Nathan Cummings Foundation, said it was important to call for a change in corporate governance even if it went unheeded.
“Even if the very structure that we’re trying to change prevents us from actually changing anything, they still need to hear that their shareholders really think this is an issue,” she said.
All the New York-based company’s director nominees were approved, although several faced significant protest votes. Rupert Murdoch’s son Lachlan and opera singer Natalie Bancroft both had 20 per cent of votes cast against their re-election to the board. James Murdoch, Rupert Murdoch’s son who has faced criticism for his handling of the British phone hacking scandal, had 16.3 per cent of votes cast against him. James Murdoch is the company’s deputy COO.
News Corp.’s widely traded Class A shares closed the day up 41 cents, or 1.7 per cent, at $24.77 after the meeting concluded.