(Reuters) – Media mogul Rupert Murdoch was re-elected chairman of Twenty-First Century Fox Inc despite protests from shareholder groups who sought to separate the chairman and chief executive positions of the family-dominated company.
Shareholders elected the 82-year-old CEO, his two sons, Lachlan and James, and the rest of the company’s 12-person board during the meeting on Friday at the Fox studio lot in Los Angeles.
Shareholders Christian Brothers Investment Services and the British Columbia Investment Management Corporation in Canada unsuccessfully proposed the appointment of an independent chair of the company, citing “the level of family control, and the influence this may bring to the impending reorganization.”
Proxy advisory firm Institutional Shareholder Services recommended shareholders vote against Murdoch and eight other directors including his sons, saying the company should have put its poison pill plan to a shareholder vote.
News Corp announced the poison pill provision in May before Murdoch split News Corp into two companies, with News Corp retaining the newspaper and other media assets and Twenty-First Century Fox holding the movie, TV and other entertainment properties. The poison pill would be triggered to prevent a hostile takeover if a buyer acquired 15 percent or more of either company.
“Our new company deserves a fresh start” Timothy Schaler, an investor adviser for Christian Brothers, said at the meeting. “For the board to ignore such a mandate shows disregard for corporate governance.”
In addition to its recommendations to vote against the Murdochs, the ISS proxy advisory firm recommended a rejection of
Twenty-First Century Fox president Chase Carey and board members David DeVoe, Roderick Eddington, James Breyer, Viet Dinh and Alvaro Uribe.
It endorsed independent directors Delphine Arnault, Jacques Nasser, and Robert Silberman, who were added to the board in June.
Twenty-First Century Fox countered the ISS rejection of board members by contending it needs Rupert Murdoch’s “unique insight and strategic vision” in the joint ceo-chairman role and said the current board has delivered good returns for shareholders.
Class A shares of Twenty-First Century Fox was trading at $34.33, up 0.4 percent, in mid-afternoon trading on the Nasdaq exchange. It has jumped 16.9 percent since July 1, its first day of trading after the split.
“The company has articulated a strong case for long-term growth after the separation and they have begun to execute impressively. We think the separation so far has been a terrific move,” said David Bank, analyst with RBC Capital Markets.
ISS’ recommendations were a reversal from last year when it urged shareholders to back the slate.
But in 2011, ISS recommended clients vote against almost all of the board members amid News Corp’s telephone hacking scandal that prompted the closing of the News of the World tabloid and scotched its bid for the remaining stake of British pay-TV provider BSkyB.
The annual meeting in 2011 attracted about 100 protesters, TV crews and Tom Watson, a British member of parliament, who flew in to voice complaints about the hacking scandal.
The Murdochs control 39.4 percent of the company’s voting rights through Class B shares, according to the company proxy. HRH Prince Alwaleed Bin Talal Bin Abdulaziz, a frequent Murdoch ally, owns 7 percent.
“The shareholder proposals are interesting politically but not realistic since Murdoch’s got the support of Alwaleed and the family’s own holdings,” said Matthew Harrigan, analyst with Wunderlich Securities Inc. “Additionally, the stock has performed very well,” he told Reuters on Wednesday.
(Reporting by Sue Zeidler in Los Angeles; Editing by Bernard Orr)
