ISS sez shareholders should vote against most members at Oct. 21 annual meet
Institutional Shareholders Services, a major investor advisory group, on Monday recommended removing Rupert and James Murdoch from News Corp.’s board and ditching most of the conglom’s other directors at the company’s Oct. 21 annual meeting.
A News Corp. spokesperson said the company “strongly disagrees” with ISS.
The agency said the phone-hacking scandal in the U.K. and the company’s response have demonstrated “a striking lack of stewardship and failure of independence by a boardwhose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs — financial, legal, regulatory, reputational and opportunity — for the shareholders the board ostensibly serves.”
ISS also took issue with Rupert Murdoch’s compensation, which included a $12.5 million bonus for the latest fiscal year.
News Corp. has been embroiled in a phone-hacking, bribery and corruption scandal at its U.K. newspaper business that forced it to close Sunday paper the News of the World this summer and has sparked a series of lawsuits and investigations. It also forced the company to table its plans to acquire the rest of satcaster BSkyB.
A News Corp. spokesperson said the company “takes the issues surrounding the 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.”
The company said executive compensation reflects “robust performance” in fiscal 2011.
The rhetoric is heating up ahead of the News Corp. annual shareholders’ meeting, to be held on the 20th Century Fox lot in Los Angeles. Although investors face an uphill battle forcing change at most big companies, let alone family-owned enterprises, the latest salvo by ISS nudges News Corp. back into the spotlight and ensures the annual meeting will be a lively event. A British shareholder org last week urged that James Murdoch be voted off the board and that Rupert’s role as chairman and CEO be split into two posts.
The only two members of the board that ISS recommended keeping in place are Joel Klein and James Breyer, as both have only served for a few months.
Aside from Rupert and James Murdoch, ISS advised voting against Rupert’s other son, Lachlan, chief operating officer Chase Carey, CFO David DeVoe, former general counsel Arthur Siskind, and independent directors Roderick Eddington, Peter Barnes, Andrew Knight, Viet Dinh, John Thornton, Jose Maria Aznar and Natalie Bancroft.