News Corp to the core | FT Alphaville

News Corp to the core

AGM vote tallies like this one released by News Corp late Monday don’t come up too often:

News Corp director vote tally

James Murdoch, the deputy chief operating officer, was particularly hammered for his perceived role in the phone hacking scandal, as the FT reports:

Just 20 per cent of voting shareholders not aligned with News Corp’s founding family voted for James Murdoch to be re-elected, reflecting concern about the deputy chief operating officer’s response to the UK phone hacking scandal that scuppered the group’s bid for British Sky Broadcasting. He faces a separate re-election battle as chairman of BSkyB next month.

Rupert fared a little better, with about 60 per cent opposition from the non-Murdoch-aligned vote. Not that he, or any of the board, were in danger of losing his seat:

Family votes saw James Murdoch re-elected with 65 per cent of all votes cast, but this was down from 89 per cent last year. Given the family’s holding, “a big protest vote would be anything over 20 per cent” against the board, Paul Hodgson of GovernanceMetrics International said before the figures were released.

Similarly, the New York Times reported that several analysts, ahead of the AGM, were expecting up to 30 per cent of shareholders to vote against the Murdoch family members on the board. So the would-be revolt came in at the high end of those expectations.

The FT story goes on to say that Calpers, the California pension fund that was among shareholders critical of News’ governance, calculated that five members would have been voted down if not for the share structure, which gives the Murdoch family control almost 40 per cent of the voting shares while Prince Walid bin Talal of Saudi Arabia, who supports the board, holds about seven per cent.

So it was never going to be a coup, even though plenty of other shareholder groups were there voicing their misgivings about the company. For a bit of colour, check out the long account by Stephen Mayne, a former News Corp journalist and now a director of the Australian Shareholders’ Association, who has for years been confronting Rupert with questions about the company’s voting structure, dividend policies and more. Mayne described it as “one of the weirdest AGMs I’ve ever attended”:

…then kicked off with some security guy standing next to Rupert introducing the board and laying down some rules for the meeting (audio here). He seemed pretty nervous and with a brief that included even shutting Rupert up, it was no wonder.

Rupert then delivered his prepared speech and only deviated a couple of times to display some short terms graphs to demonstrate recent share price out-performance. He also ad libbed to somehow claim the only thing most News of the World reporters had broken was great stories. This sort of contrasted with the contrition and sorrow in the prepared text.

Anyone who’s sat through an AGM full of softball questions — or watched Rupert Murdoch in action — can probably picture how this would have played out:

The security guard handling the microphone near me was really annoying. At first he stood less than a foot from my face and then next time he gave a gentle tap on the shoulder to say last question.

Every time the goon standing next to Rupert tried to cut down a speaker, I would interject with something like: “Who is this guy? Is he chairing the meeting?” Over the seven visits to the microphone, it felt like hardly any of them were an uninterrupted opportunity to ask questions.

If you enjoy this kind of thing, Mayne’s account of his questioning of Murdoch at the 2010 AGM (which kicks off by asking if he is attending Jon Stewart’s Rally against Insanity) is actually more entertaining – and displays a rather prescient concern about the phone hacking allegations which of course had been around for years in some form.

Related links:
The good, the bad, the ugly: News Corp edition – FT Alphaville
Contagion at the core – FT Alphaville