Murdoch fights on as rebels plot to oust him
News Corp shareholders call for the roles of chairman and chief executive to be separated
Rupert Murdoch faces yet another day of reckoning this week, as some of his most vigorous critics gather in Los Angeles for what promises to be a highly fractious annual meeting of his media conglomerate.
The 81-year-old tycoon is preparing to take the stage of the Zanuck Theater in Hollywood to chair Tuesday's event. It will be only the second time he's publicly faced News Corporation shareholders since the phone-hacking affair catapulted his British tabloids to the centre of a global scandal.
In the audience will be a collection of dissident shareholders and corporate activists. They intend to take advantage of a rare opportunity to hold Mr Murdoch to account for his handling of the affair, which has closed the profitable News of the World, seen his takeover bid for BSkyB abandoned, and left him facing a bill estimated at around £550m to compensate victims.
Top of the rebel agenda is a resolution to remove Mr Murdoch as chairman, which he holds in conjunction with the post of chief executive. The motion calls for him to be replaced by an individual better equipped to deal with the "lax ethical culture and lack of effective board oversight" that has been laid bare by the "still emerging scandals".
The effort to oust Mr Murdoch is believed to be supported by at least 18 major investors, including the UK's Local Authority Pension Fund Forum (LAPFF). Its chairman, Ian Greenwood, said there is "nothing personal" about the motion. "Rupert Murdoch has created a lot of value for a lot of years and one can understand his feeling for the company. But he and his family have to realise that when a company is owned more than 50 per cent by other people, it changes the family's relationship to it."
However, as the Murdochs controversially hold 40 per cent of the voting shares – though only 12 per cent of the total – the motion is unlikely to pass, as Murdoch allies have enough to quash any dissenting motion.
However, Julie Tanner of Christian Brothers Investment Services, who co-authored the motion, says she hopes it will send a "clear message" that will embarrass Mr Murdoch into reforming the company. She points out that the reappointment of James Murdoch as deputy chief operating officer was opposed by almost 35 per cent of voters at last year's annual meeting. He was later forced to resign as chairman of the UK newspaper arm, News International.
Mr Murdoch Snr appears to be in a combative mood. He recently wrote on Twitter: "Busy preparing for next week's AGM. Signs pretty peaceful, but any shareholders with complaints should take profits and sell!"
The comment, in a year in which News Corp shares have risen from $17 to $24.50, has riled critics. "It shows an utter disregard for the co-owners of his company," Mrs Tanner said. "How can the chairman of a publicly owned company say something like that?"
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