October 25th, 2011
01:35 PM GMT
Hong Kong, China (CNN) – Shareholder support for the 15-member board of News Corp. is being questioned after the company’s annual meeting in Los Angeles.
Last Friday’s votes – only now publicized – reveal the less-than-stellar outcome for CEO Rupert Murdoch and his sons, James and Lachlan.
Murdoch’s sons appear to have been the lightning rods for shareholder anger. The anger stems from the hacking allegations of the now-defunct News of the World tabloid - which was owned by News Corp.
Shareholders shamed James Murdoch, News Corp’s deputy COO, the most. A full 35% of votes for re-election to the board went against him. His older brother Lachlan, who had resigned from his last executive role in 2005, didn’t do much better, with 34% of the no votes going his way. Rupert - the Chairman, CEO and patriarch - did much better than his progeny. Only 14% of all shareholders voted against him - although this was one of his lowest levels of approval in years.
The Murdochs will, however, remain on the News Corp. board. Despite shareholder disapproval, the entire board was re-elected.
But there is an important caveat: A full 47% of News Corp. votes are controlled by the Murdoch family and its allies.
Breaking that down, family members own 40% of the votes. Saudi prince Al-Waleed bin Talal, a very staunch supporter, controls 7% of the vote. As for non-aligned shareholders? They make up the remaining 53%.
So if we took away those pro-Murdoch votes, we get a much different – and more negative – picture of what independent shareholders are actually thinking.
The Wall Street Journal found that James Murdoch’s 35% disapproval would jump to 75%. Lachlan’s 34% would jump to 72%. And Rupert’s 14% would climb to 30%.
If it wasn’t for the Murdoch family’s controlling share, James and Lachlan might very well have been voted off the News Corp board.
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