Murdoch to face rocky News Corp. AGM
Rupert Murdoch’s job will be on the line Friday when the Australian media baron faces investors at the annual general meeting of his company News Corp.
Dissent is rampant among individual and institutional shareholders in the wake of the phone-hacking scandal in Britain, which saw News Corp.’s tabloid News of the World shut down and 16 people arrested, including several Murdoch employees.
"Rupert's been in charge for 58 years. He's 80 years old, the governance is a mess, phone hacking was a disaster, so clearly we think it's time for the world's oldest and longest-serving CEO to step aside," said Stephen Mayne, a News Corp. shareholder and director of investor-advocacy group the Australian Shareholders’ Association.
Groups of shareholders have introduced resolutions to axe Murdoch as CEO and to kick him, his sons and various allies off the company’s board.
The California teachers pension fund, which owns 6.1 million News Corp. shares, said it will vote against the entire current board. Hermes Equity Ownership Services — which advises investors on corporate governance issues, including shareholders representing 0.5 per cent of News Corp. stock — is recommending Rupert, James and Lachlan Murdoch all be removed from the board. Shareholder advisory ISS has counselled its clients to vote against 13 of the company’s 15 directors, including the Murdochs.
One of the more ardent dissidents will be British MP Tom Watson, a Labour Party politician who has dogged News Corp. for years over its phone hacking. Watson, who revealed in July that the News of the World had hacked the phone of slain schoolgirl Milly Dowler, announced Wednesday that he acquired shares in the company and is flying to Los Angeles to try to address the AGM.
"I want the institutional investors to be in no doubt about the wrongdoing that is taking place in name of News Corp.," Watson was quoted as telling the Birmingham Mail newspaper as he boarded his flight.
Hampered by dual-share structure
The anti-Murdoch measures are likely to fail on a direct vote, however, because of News Corp.’s share structure. Class A shares represent about 70 per cent of the equity but have no vote, while Murdoch controls 40 per cent of the Class B voting shares and a closely allied Saudi prince has another seven per cent.
Still, the irate investors are hoping their stand will at least show the News Corp. board that shareholders are disgruntled, and persuade it to change things up — including curbs on Rupert Murdoch’s salary.
"I've even seen some figures this week that if you measure it from August 1992, the company's underperformed the Australian market by 75 per cent," Mayne said.
"And Rupert Murdoch got a 47 per cent pay rise to a record $33.3 million [US]. It's just over the top. He doesn't need it anyway. He's worth $5 billion, and the performance has been very shoddy."
Revelations that the News of the World, News Corp.'s former flagship Sunday tabloid, routinely eavesdropped on the voicemail messages of celebrities, politicians and royalty have appalled Britons and shaken the global Murdoch media empire.
The scandal has already led to the resignation of two of London's top police officers, ousted executives at News Corp. and seen British Prime Minister David Cameron's communications chief, Andy Coulson — an ex-tabloid editor — resign from his post.
With files from the Australian Broadcasting Corporation and The Associated Press