There have been plenty of critics blasting Rupert Murdoch and News Corp. since the phone hacking scandal erupted months ago. As the company gets set for its annual meeting tomorrow, we can expect to hear plenty more from the investors who are demanding that changes be made.
However, as Bloomberg News reports, all the noise being made by groups such as The California Public Employees’ Retirement System, the California State Teachers’ Retirement System and Institutional Shareholder Services, really doesn’t matter.
That’s because Murdoch owns a slew — about 40 percent — of Class B voting shares:
‘With dual class shares of stock, there’s not much power for shareholders and it’s unlikely the company is going to give it up because they hold all the cards,’ said Charles Elson, director of the University of Delaware’s Center for Corporate Governance. ‘Shareholders in that structure have very little influence.’
The best shareholders can hope for is that their complaints end up creating enough of a public perception problem for the company that it’s forced to make slight alterations to keep its reputation somewhat intact. Murdoch won’t be one of those changes, but his son James might be enough of a sacrifice to get things quiet again.