Rupe withdraws shareholder resolution
ADELAIDE, Australia — Rupert Murdoch is used to running things his way but the News Corp. chairman suffered a rare defeat at the hands of shareholders at the company’s annual general meeting Wednesday.
Murdoch was forced to withdraw a resolution that would have granted more than 3 million share options to six exec directors including his sons James and Lachlan, Peter Chernin and David De Voe.
Murdoch said the resolution would have failed without the support of his private vehicle Cruden Investments and he had decided not to cast Cruden’s votes because theoretically he personally could have benefited from the option plan (although he would not have received any options).
During the meeting, which marked 50 years since Murdoch took control of News, then a one-paper company in Adelaide), gadfly shareholder Stephen Mayne told the mogul he was in a “state of shock” that News had been “rolled” on this issue, hailing this an historic day for minority investors.
The packed meeting at the Hyatt Regency hotel ballroom did approve a resolution to treble to $1.2 million the annual fees that can be paid to non-exec directors, which Murdoch said was necessary to compensate them for the extra time to ensure the company complies with new corporate governance regs in the U.S. and Australia.
Corporate governance was a contentious issue as Mayne demanded the appointment of more non-exec directors and alleged only two or three of the 16-member board are truly independent, questioning the impartiality of those who are former News execs.
A rankled Murdoch said he is looking to appoint several more indie directors and pointed to the recent restructuring of the company’s audit, corporate governance and compensation committees, all of which comprise non-exec directors.
The overall mood at the meeting was bullish as Murdoch gloated about News’ record year, its reduction of debt as of June 30 to $8.2 billion and the accumulation of $4.9 billion in cash.
To the relief of some investors, he ruled out any major acquisitions, saying management would be absorbed by the expansion of DirecTV (he expects regulatory approval for the deal with General Motors “in the coming weeks”) and on issues involving paybox Sky Italia.
While he acknowledged DirecTV’s contributions to News’ bottom line would not be “sensational” in the short-term, he vowed to compete head-on with the dominant U.S. cablers.
He said he had not yet decided whether to match rival Echostar’s gambit of giving away a personal video recorder to each new subscriber, but implied that was an inevitable step within the next year.
He indicated he had no fears if the FCC’s move to increase the national cap on TV ownership is defeated, noting, “If we have to sell two or three stations I won’t lose any sleep.”
He described the prices being paid for sports rights as “terrifying,” and foreshadowed taking a tough stance when Fox’s deal with Major League Baseball comes up for renewal, declaring, “If we renew it, it will be for a much more economic price.”
Asked his opinion of the U.S. studios’ controversial decision to ban Oscar screeners, he adhered to the Valenti line about piracy concerns and said, “I think they’re doing the right thing.”
He dodged questions about the chances of son James being hired as CEO of 34%-owned BSkyB, offering only “I’m confident the best candidate will be appointed.”
To those who asked whether he harbored any thoughts of retirement, he said, “I never think about it. Right now I think I am effectively driving the company and I’m enjoying it.”