Shareholders could loosen Murdoch’s grip on News Corp.
Jeremy Hobson: Well here in L.A. today, the world’s second biggest media conglomerate, News Corporation, is having its annual shareholder meeting. The company is already facing shareholder lawsuits over the embarrassment caused by the phone hacking scandal in the U.K. And today, a group of dissident investors will be pushing for CEO Rupert Murdoch to give up some of his power.
Here’s our senior business correspondent Bob Moon.
Bob Moon: Two big pension funds and a shareholder advisory firm are the main challengers aiming to shake up News Corp.’s entrenched board of directors.
Charles Elson is a corporate governance expert at the University of Delaware. He says Murdoch holds sway over the biggest bloc of voting stock, but he’d best not ignore unhappy shareholders.
Charles Elson: A strong enough vote against is a signal to management that something is wrong, something to which you need to respond.
Julie Tanner heads socially responsible investing for New York’s Christian Brothers firm. She says Murdoch should no longer serve as both chief executive and chairman.
Julie Tanner: So the resolution asks for an independent chair of the board.
British authorities are still investigating News Corp.’s phone-snooping, and the FBI and U.S. regulators are looking for any illegal hacking here. There’s been no big hit to share value: News Corp. profits are driven by its U.S. operations — largely its Fox cable TV business. But the dissenters want independent assurance their investments are secure.
Tanner: What’s come out so far has really not given shareholders a lot of confidence.
Confronted by hecklers the other day, Murdoch smiled and said “a little controversy makes everything more interesting.” Today’s meeting, though, is being carefully stage-managed behind the gates of Fox Studios in Hollywood.
In Los Angeles, I’m Bob Moon for Marketplace.
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