21st Century Fox Investors Reject Splitting Murdoch’s RolesAndy Fixmer
21st Century Fox Inc. investors rejected a call for an independent chairman, the third straight year activists have lost a bid to curb the influence of billionaire Chief Executive Officer Rupert Murdoch.
The company announced the results at the annual meeting today in Los Angeles, without providing the tally. Murdoch, 82, and his family hold about 40 percent of the voting rights. The 12 nominees to the board were all elected over some opposition.
Murdoch, who kept both roles after splitting New York-based Fox from his News Corp. publishing empire in June, used his votes to counter support for the independent chairman proposal from proxy advisers Institutional Shareholder Services Inc. and Glass, Lewis & Co. Excluding Murdoch’s shares, News Corp. investors last year voted almost 2-1 to split the jobs.
“Our management team will continue to build on our operational and financial momentum,” Murdoch said on the stage.
Christian Brothers Investment Services, which proposed the split, and was joined by British Columbia Investment Management Corp., said Fox’s board lacks independence with Murdoch holding both posts. They cited the phone-hacking scandal that led to the closing of the News of the World newspaper.
“The level of family control -- Mr. Murdoch owns 40 percent of voting shares -- and the dual-class share structure which denies voting rights to Class A shareholders, were engineered to keep power in the hands of Mr. Murdoch,” said Julie Tanner, a representative of Christian Brothers. “While it is virtually impossible for a shareholder resolution to ‘pass,’ a high vote result should send a clear signal to the board that change is needed.”
Last year before the split, News Corp. filed official voting results shortly after the meeting.
Christian Brothers also cited the June adoption of a “poison pill” takeover defense by the board without shareholder approval. The board’s vote led ISS to recommend that investors oppose the election of some directors, including Murdoch and his sons Lachlan and James.
With the split, Fox kept most of News Corp.’s TV and film assets. At News Corp., owner of the Wall Street Journal and other newspapers, Murdoch holds only the chairman title.
Fox, owner of the namesake broadcast network, fell 0.2 percent to $34.26 at the close in New York. The shares have outperformed those of film-and-TV competitors, gaining 52 percent this year, compared with 35 percent for Walt Disney Co. and more than 44 percent at Time Warner Inc. Disney investors in March rejected a similar call to split Chairman and CEO Robert Iger’s duties.
The company has repurchased $7.73 billion of its shares under the most recent buyback authorization, according to an Oct. 16 regulatory filing.
Fox also called off voting on an investor proposal to end the company’s dual-class capital structure, under which only class B shares have voting rights, after the backers failed to appear at the meeting.
The company has about 1.51 billion Class A shares outstanding and about 800 million of voting Class B shares, according to data compiled by Bloomberg. The Murdoch family holds 314.9 million Class B shares, according to filings.