James Murdoch, the presumed heir to the News Corp. media empire, got a sharp rebuke from shareholders when nearly 35 percent of the company’s investors voted against his reelection to the board.
But even that number masked the enormity of the dissent against the youngest son of News Corp. Chairman and CEO Rupert Murdoch, based on the voting results disclosed in a regulatory filing.
Forty percent of James Murdoch’s total approval vote of 65 percent came from shares held by his family, and another 7 percent came from News Corp.’s largest individual shareholder, Prince Al-Waleed bin Talal.
Those votes are the only reason James Murdoch got reelected – without them, nearly two-thirds of the votes went against him, enough to cast doubt over whether he has the credibility and support to eventually succeed his father.
“Clearly, shareholders are upset by the hacking scandal and the continued disproportionate control of the company by the Murdochs,” said Gabelli & Co. analyst Brett Harriss.
A significant rejection
Bob McCormick, chief policy officer at proxy advisory firm Glass Lewis, which had recommended News Corp. shareholders vote against reelecting Murdoch and his children, said: “As you approach one-third votes against a director it’s a very significant rejection of that director. I think they should definitely rethink their position but given their history I doubt it.”
Even at the 35 percent level, the vote against James Murdoch rivals that of the 43 percent no confidence vote Disney shareholders gave to former CEO Michael Eisner in 2004.
The figures from this year’s meeting underscore the massive damage the phone hacking scandal has inflicted on James Murdoch’s reputation.
At last year’s annual meeting, where Rupert Murdoch memorably stood up to reassure investors that hacking was the result of a lone, rogue reporter, only 20.5 percent of independent B shares were voted against James Murdoch. The percentage of votes against James Murdoch this year nearly doubled – even when all the family votes are considered.
Investors gave Rupert Murdoch more support than his children, reelecting the company patriarch with nearly 85 percent approval, inclusive of his family’s votes. Absent those votes, 29 percent of News Corp. shareholders voted against or abstained from voting for Rupert Murdoch.
Murdoch’s eldest son Lachlan did not fare much better than his brother, garnering votes against his reelection of just under 34 percent.