Rupert Murdoch Defends News Corp and His Control of it at Shareholder Meeting
News Corp. Chairman Rupert Murdoch defended the company’s performance and its employees at the company’s annual shareholder meeting in Los Angeles Friday. The recent closure of its News of the World newspaper following allegations of cellphone voicemail hacking in the U.K. prompted some shareholders to seek changes to the company’s governance structure. Other shareholders attended the meeting to voice their general displeasure with Murdoch’s leadership and the company’s share price performance over the past decade.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Murdoch said the company’s stock has outperformed its competitors and the S&P 500 stock index in the wake of the scandal and despite recent economic uncertainty. He said News Corp. employees should be “beacons for good, professional and ethical behavior,” and that media companies should have a social purpose beyond delivering returns to shareholders. “We have tens of thousands of extremely good and honest people who enjoy working for us and understand the social purpose of what they're doing, too,” he said. “Have there been mistakes made? Yes. And we're putting them right."
Among the “huge” mistakes in News Corp.’s recent history was failing to sell MySpace for $6 billion a month after News Corp. purchased the online social networking company for $600 million, Murdoch said. At the time of the deal “everyone thought it was fantastic,” he said: Now, “all the people concerned with it are no longer with the company. That was certainly one of the mistakes we've made along the way."
Christian Brothers Investment Services sought to force News Corp. to name an independent director as the board’s chairman. “It is an investment risk to have a weak board with a conflicted chairman,” a representative from Christian Brothers said during the meeting, after introducing a resolution that would require that change. “We owe it to all News Corp. investors to cast a vote for change.” A tally of the votes hadn’t been completed by our deadline.
Marguerite Young, another shareholder, warned the News Corp. board that investors would seek governance changes at News Corp. subsidiaries as well. “Independent investors are looking not just at this meeting, but at the meetings coming up of those subsidiaries and will be challenging board seats,” she said. “There is the feeling that the culture of this company cannot threaten the health of those other companies.”
Outside the meeting, AP reported just over 100 of protesters gathered. Free Press helped organize the protests with Common Cause, OccupyLA, Media Matters for America and others. The groups said they asked News Corp.’s board to “pledge that the company will refrain from any additional political spending on the 2012 elections.”