Turmoil Engulfs News Corp. Meeting

Investor outrage leads Rupert Murdoch to shut down annual meeting

“I think we’ve had enough questions,” Rupert Murdoch told News Corp. shareholders on Friday, less than an hour and a half into the company’s annual shareholder meeting at Fox Studios in Century City, Los Angeles. “I declare the meeting finished.”

The meeting wasn’t actually finished—shareholders had yet to vote on whether Murdoch, the company’s CEO, should continue as chairman, and on whether the board should be re-elected, not to mention on a resolution from Christian Brothers Investment Services, which manages funds for Catholic groups, that would have replaced Murdoch as chairman and installed a truly independent chairman in his place. But Murdoch was at least able to bring an abrupt halt to a meeting that had gotten embarrassing.

Then News Corp. made an unexpected move to forestall further embarrassment: Rather than releasing the tally of the votes at the meeting, as is standard procedure, the company announced that the numbers wouldn’t be made public until this week. It did, however, announce that the coup attempt against Murdoch and his directors had failed. As this was a foregone conclusion, given that the Murdoch family holds 40 percent of the voting shares, it suggests that the company wasn’t worried about the outcome of the protest vote so much as the size of it.

News Corp. should have been prepared for what it faced Friday, and indeed it had originally seemed to be. The location itself, behind studio security and a continent away from prying shareholders in New York, was a sign that the company was aware it was in for a tough day. But then the storm grew in the weeks leading up to the meeting, with proxy advisory companies telling shareholders to vote against re-electing certain board members—one, Institutional Shareholder Services, even recommended voting out Murdoch himself—and institutional investors like CalPERS, the pension fund for California employees, and New York City’s pension funds deciding to take that advice.

Despite his company’s preparedness measures, Murdoch was greeted by protestors outside Fox Studios and angry investors inside—from global advisory firms to the Church of England. He didn’t seem to care, his tone throughout defiant as he tried to ignore the tumult and tout the company’s larger story, calling it “the stuff of legend.” While he did admit to the failure of MySpace—“we proceeded to mismanage it in every conceivable way”—he was irritable and reticent in dealing with questions about phone hacking at News of the World, which News Corp. shuttered in July.

A source close to the matter said that News Corp. didn’t release the full results because votes were still being tabulated and there wasn’t enough time to get them to the SEC. (The shareholder meeting ended before 2:40 p.m. Eastern time; the SEC closed its offices at 5:30 p.m., almost three hours later.)