Major shareholder unrest is anticipated at News Corporation’s upcoming AGM in October.
A consortium of 18 high profile investors with combined assets of $1.6 tn, including Legal & General, Aviva and the Co-operative Asset Management, has publicly backed a motion filed by SRI investor Christian Brothers Investment Service (CBIS) and the UK Local Authority Pension Fund Forum (LAPFF).
The group is demanding the removal of Rupert Murdoch as chairman and the appointment of an independent chair, pointing out a ‘golden opportunity for serious governance reform’. Murdoch, aged 81, has been serving as both chairman and CEO for the media empire.
Last year’s AGM in Los Angeles had already been the scene of protests against the media tycoon.
CBIS, LAPFF, pension fund CalPERS and advisory bodies ISS and Glass Lewis had all called to vote against the re-election of Murdoch, his son James and other non-executive directors, citing the phone hacking scandal at UK tabloid News of the World, now shut down, and strong concerns about standards of corporate governance at the company.
Their chances of ousting the media tycoon had been slim, however. Indeed, the company’s shareholding structure is a dual class one, allowing Murdoch and his family to hold 40 percent of voting rights despite owning 12 percent of shares.
In addition, an internal rule stipulating that shareholders must file their motions before the month of May – well before the hacking scandal was revealed – to be included in the proxy voting form helped dampen opposition last year.
The investors bringing their support to the motion this October hold Class A shares, which have no voting rights. Nevertheless, it seems activists this year are rallying more and more malcontents in a well organised campaign.
