Another top independent proxy advisory service is recommending News Corp. investors take a hard line with their voting shares at the upcoming annual meeting—and this time, Rupert Murdoch is the target.
On Monday, Institutional Shareholder Services advised News Corp. shareholders to vote against reelecting the board’s chairman—Murdoch himself. ISS stated that this move is “warranted in light of the pattern of repeated failures of board oversight and independence ranging as far back as the company’s reincorporation to Delaware in 2004, and culminating with the company's responses to the allegations of widespread criminal activity by corporate employees that began to emerge in July 2011.”
The ISS report emphasizes Murdoch’s bloated compensation in light of investigations the company is facing both abroad and in the United States. “Despite the harm to the company inflicted by the phone hacking scandal, CEO Rupert Murdoch received a cash bonus of $12.5 million in fiscal 2011, compared to $4.4 million in fiscal 2010,” states the ISS guidance.
This proxy advisory took its opposition to the News Corp. board further than other proxy advisories, recommending that shareholders vote against the reelections of all News Corp. board members except Joel Klein, who has served less than a year, and James Breyer, a new nominee to the board. Other proxy advisory services, including Glass Lewis, have primarily opposed the reelection of a select six sitting board members.
It will be difficult for News Corp. shareholders’ discontent to amount to any real change within the corporation. Though it is publicly traded, the Murdoch family holds some 40 percent of the voting power.
"News Corporation strongly disagrees with ISS' voting recommendations. The Company takes the issues surrounding News of the World seriously and is working hard to resolve them, however ISS' disproportionate focus on these issues is misguided and a disservice to our stockholders," a News Corp. spokesman said in a statement provided to Adweek. "Moreover, ISS failed to consider that the Company's compensation practices reflect its robust performance in FY 2011 driven by its broad, diverse group of businesses across the globe. News Corp. believes the recommendations put forth in the ISS analysis are not in the best interest of the Company's stockholders."