Things are hotting up. Not only are shareholders groups gathering to question the running of the company, but Tom Watson MP has flown in with a proxy.
As he will be part of the group grilling James M (aka Sonnie Jim) in the House of Commons committee real soon now, the atmosphere could be even more electric.
Better to face angry shareholders on a full stomach.
News Corp. Chairman and Chief Executive Rupert Murdoch chowed down with sons Lachlan and James on the Fox lot Thursday afternoon, less than 24 hours before the company's much-anticipated annual meeting.
Friday will mark the first time since the phone hacking scandal at the now-shuttered News of the World British tabloid turned into a global story that Murdoch has addressed shareholders. Two influential shareholder advisory firms and the nation's largest pension fund, CalPERS, are pushing to remove Murdoch and his sons from the company's board.
..News Corp. had revenues of more than $33 billion for .. year ending last June, ..... the focus of the meeting will likely be on how the company has handled the News of the World mess.
The scandal, in which News of the World operatives hacked into voice mail accounts of celebrities, members of the British royal family and even crime victims, has had massive repercussions for the company. Not only did top executives Les Hinton and Rebekah Brooks resign from their senior positions at News Corp. because of their roles in the News of the World fiasco, but also a long-planned $12-billion deal to acquire the 60% of BSkyB it didn't already own was scuttled and lawmakers in Britain and the U.S. ....launched investigations into the company.
Probably nothing at this meeting, but more setting the stage for later ones, and other companies beware, the sleeping dogs called the owners are being stirred into awakening.
The lucky thing for Rupert is the incorporation in Delaware, if it was still Aus based, he would be half gone by now with a new law on dissent from the remuneration report. And one has to add from the same source:
News Corp. has given no sign ...... any intention of restructuring its board of directors. Last week, in reaction to a recommendation from advisory firm Institutional Shareholders Services that the Murdochs be voted off the board, the company said the "disproportionate focus on these issues is misguided and a disservice to our stockholders."
The heat the company will be facing Friday won't be limited to the Zanuck Theater on the Fox lot where the annual meeting is being held. The Los Angeles version of Occupy Wall Street has also expressed ..intent to protest at the meeting.
One word of warning to the protesters. Don't try to go after Murdoch with a pie. His wife, Wendi Deng, packs a mean punch.
For more on the annual meeting, please see this story in the Los Angeles Times.
Over 10 mins. Some interesting material on new developments about the phone hacking and other activities of News Corp.
An interesting cross over in that it may be that a couple of the intercepts of hacked phones occurred at least in part on US soil, and you can guess what that could mean.
Watson has a prediction there will be a metamorphosed R Murdoch rather than the humblest day in my life one that faced him last time. Question, will Watson be allowed to speak. What will he say if he is? And what would be the implications for the Murdochs if he is not?
Funny thing is that while that interview was showing, on Channel 7 there was a film "The Bank Job" about a London Bank robbery that seemed to have been made by Film Victoria and in the post credits they commented that somewhere over 100 London police were "done" for taking bribes as a result of investigations related to The Bank Job. Eerily similar or what? Don't ask me how I watch two programs at once!!!!
TOM WATSON: Well it was quite hard. It came about because I held a telephone conference with investor advisory groups in the United States and the United Kingdom. And at the end of it, they were asking me very detailed questions about the conduct at the Parliamentary inquiry, and at the end one of them said, you should come to the AGM.
So I was really pleased with the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) asked me to represent their interests at the meeting tomorrow, that's the trade union group.
That's set from the top, it's set by Rupert Murdoch himself, and I don't this company have put those measures in place to make sure it can happen again. So I think there's a liability waiting to, or a civil liability waiting to happen, again for the company. And I think it's really important that those institutional investors are in absolutely no doubt about what went on at News International in the UK.
ALI MOORE: You say a civil liability is about to happen again; are you referring to new or different allegations?
TOM WATSON: Well in a company statement last week they used the phrase that it was disproportion ... they thought it was a disproportionate interest in what went on in the UK and phone hacking. Well I don't think all the investors know that actually there are nearly 200 police officers looking at News Corp in the UK now. They're looking at things from allegations of payments to police officers to perjury. And it's much wider than just phone hacking.
We now know that the police are looking at at least three other private investigators. I think there's a lot more to come out and I don't think investors know that. And of course they're exposed to the liabilities because of that.
And I think, they really need to, you know, be clear that corporate governance as we understand it does not exist in News International. It's a $33 billion transglobal media enterprise that is run like a dysfunctional family firm. And I don't think that can go on. I think they've got a duty, the board have got a duty to shareholders to protect their interests. And frankly the company have a duty to their customers and readers and viewers to put the matter right.
TOM WATSON: Well we're not going to win votes tomorrow. The Murdoch, the way the unusual arrangements of which the democracy of the company are arranged means that not all the shareholders have a vote. And with the Murdoch family's share and a Saudi prince's share they've got 47 per cent of the vote. But I think if the non-Murdoch arm of the voting shareholders express discontent and ask for changes; it might be that they don't get them tomorrow in the vote, but they can certainly set the course of reform in the company and I think that's essential given what's gone on.
ALI MOORE: If you get to speak, that's a very good point. Because of course there's no guarantee that the chairman, Rupert Murdoch, will let you speak. How far are you prepared to go? Will you be carried out kicking and screaming if necessary?
TOM WATSON: No, I won't be doing that. But, you know I'm hoping, you know he does run a media organisation that prides itself on a commitment to free speech. So I would hope that as a proxy shareholder, he at least gives me my two minutes at the rostrum to try and outline to shareholders what I think the company should do to reform itself.
ALI MOORE: And these other methods of surveillance, will they go to the allegations currently being looked at in the US?
TOM WATSON: Well we were amazed on our Parliamentary Committee only two days ago when one of the lawyers told us that he'd got two clients, he represents two clients in the UK who believe they were hacked on US soil. And they're seeking ways to see whether the company can be sued under US law.
Only two days ago the external council for the company, a man called Julian Pike who works for Farrer's, a big respected solicitors firm in the UK, told us that they'd produced a report in 2008 that said there was a powerful case to suggest that at least three other journalists were involved in phone hacking. That was a week before executives for the company came before us and told us there was only a single rogue reporter. And they adhered to that defence for some years. Indeed, at last year's News Corp AGM, Rupert Murdoch himself told investors that the phone hacking scandal was the work of only a single rogue reporter.
I think the investors last year were ... Rupert Murdoch downplayed the depth of the scandal last year. I don't think he can get away with that this year. And James Murdoch will certainly not get away with it when he comes before our committee in November.
in the course of an inquiry looking at where we were misled, there were allegations made against James Murdoch that we were misled again.
And we've now had three people make that allegation: the previous in-house company lawyer, a previous editor of News of the World and, as I just say, the external counsel, the external lawyer, highly regarded, who used to work for the company. So I think Mr Murdoch is in hot water and will have some very serious questions to answer when he finally does get in front of us.
Ooops. Pity Watson did not tell us what he really feels. So not curtains for the Dirty Digger, but someone must be looking for the drawstrings????
okie From United States of America, joined Jul 2003, 3493 posts, RR: 3
Reply 4, posted (3 years 10 months 2 weeks 2 days 1 hour ago) and read 1266 times:
Take a breath Baroque
I have not been following this very closely but if you figure that Murdoch's control roughly 47% of the stock of a viable profit making company then it would take a 95% or so of investors (over 50% of ownership) to shoot themselves in one foot and vote to replace the board.
Then they would be shooting themselves in the other foot if they appoint the wrong people to replace the board causing the company to fail.
Since they would be not necessarily be following their fiduciary responsibilities if they tank the company then they would be open to a gut shot by the investors to which they are to represent for not following their responsibilities.
The only winners here are going to be the lawyers.
I suspect a lot of frustration and noise but I do not think other than maybe a sacrificial board member or two being replaced otherwise it will be just a lot of noise and more money for the lawyers.
Baroque From Australia, joined Apr 2006, 15380 posts, RR: 59
Reply 5, posted (3 years 10 months 2 weeks 1 day 15 hours ago) and read 1215 times:
Quoting okie (Reply 4): I suspect a lot of frustration and noise but I do not think other than maybe a sacrificial board member or two being replaced otherwise it will be just a lot of noise and more money for the lawyers.
Pretty much all of what you write is correct. But this one will not sink without trace.
A. The majority of shareholders are not in Murdoch's pockets, only the majority of the votes.
B. The HoC committee is not going to be pleased at best.
C. There must be a sound change of charge being laid in relation to bribing police, a part of the evidence being on TV way back at the first encounter with the HoC committee and given/provided by a then senior New exec. Aka the Witch.
The issue of most interest is can shareholders take back control of a company where they have been shut out by a form of poison pill. My guess is that in the long run, they will. But it will be like watching paint dry.
Murdoch survives News Corp shareholder vote
October 22, 2011 - 6:59AM
So round one fizzed, but there were some sparkles and note how Rupert avoided the difficult questions. And that nice Mr Watson will just keep asking those awkward questions, did you lie to the House of Commons. Anyone in the UK should check to see if they are making accommodation available in the Tower!!!
In an at times testy annual meeting at the company's Fox Studios in Los Angeles, representatives of several fund managers and advisory firms, as well as the Church of England, spoke in support of a resolution to decouple Mr Murdoch's dual role as chairman and chief executive and which urged a greater future role for independent directors.
Julie Tanner, in charge of ethical investing at Christian Brothers Investment Services, which manages Catholic funds, condemned the "pervasive and value destroying scandal" at the company and urged greater accountability from a "truly independent chair".
"I really expected the board to make some sweeping changes," she told the meeting, attended by about 100 shareholders and their proxies. "But it hasn't."
Others quizzed the board over poor investment decisions and directors' remuneration, including the 80-year-old Mr Murdoch's $US8.1 million base salary and that of chief operating officer Chase Carey, which one shareholder representative described as "excessive compensation".
They also faced new allegations levelled by UK parliamentarian Tom Watson, who suggested the hacking scandal went further than that which had already been disclosed. He said he believed private investigators, working at the behest of News Corp journalists, had sought to hack into the computer of an army intelligence officer.
Mr Murdoch responded that he was not aware of the allegation and that the company was constrained legally from talking further about the details of the police probe. He insisted that News Corp was actively helping inquiries.
"It is fair to say that the company has attracted a certain amount of attention in recent months ... and I wanted to reaffirm the seriousness by which I take what has gone on in London, as well as put that controversy in context of our entire global business... and to share with you my optimism about the potential growth for our profits, our products and our people," he said.
"The story of our company is the stuff of legend – from a small newspaper in Adelaide, to a global corporation based in New York with a market cap of $44 billion ... informing, entertaining and educating at least a billion people each day."
The company was counting votes and was expected to confirm later in the day the vote in favour of board members.
Mayne makes his mark
The tense mood at Friday morning’s meeting was leavened by several humorous exchanges between Mr Murdoch and shareholder activist Stephen Mayne, of the Australian Shareholders Association.
Accusing the company of a “gross lack of independence and poor governance”, Mr Mayne said decisions had been taken that treated shareholders as if they were in “a family-run company”.
“I really think you should get with the program,” Mr Mayne told Mr Murdoch. “It’s time to take the governance high road.”
At several points Mr Murdoch questioned the veracity of Mr Mayne’s statements, saying at one point: “Stephen, I’d hate to call you a liar but I don’t believe you.”
In a comical twist Mr Mayne called for a show of hands among directors who believed that News Corp’s dual class voting system was a good thing. Several had complied, with Mr Mayne inviting a second straw poll before Sir Rod Eddington stepped in: “Stephen, Stephen . . with all respect: Rupert runs the meeting, not you.”
At times Mr Murdoch struggled to keep the meeting on track and was reminded on a number of occasions by interim counsel Janet Nova on how to proceed. At one point he read rules for asking questions from the floor after several had already been asked.
Hacking scandal payout
Earlier, News Corp's UK subsidiary announced that it had agreed to pay about 3 million pounds to settle claims against its now defunct tabloid The News of the World over the hacking of the mobile phone of a murdered schoolgirl in 2002.
Stay tuned for further episodes in this saga that will run for as long as the UK courts take. And then of course, the US courts might chirp up too.
ltbewr From United States of America, joined Jan 2004, 13558 posts, RR: 17
Reply 7, posted (3 years 10 months 2 weeks 1 day 8 hours ago) and read 1178 times:
Sadly, not much happened but for some fizzled fireworks of anger, as Murdoch, his family have a controlling interest with the way the shares are structured over the BoD and has enough friends among enough minor shareholders to hold off a revolt. As the company is domiciled in the highly business friendly State of duPont...er...Delaware, any real legal actions by that state's Attorney General (who is Democrat Beau Biden, son of the VP of the USA), will never happen unlike what could happen in NY State.
That they have allegedly paid out millions to one of the victims of their phone hacking acts, probably to protect Murdoch and his current and ex-executives from having to face depositions or disclose documents. Eventually, some of the victims will get some bigtime lawyers and will sue the USA based News Corp. in a Plaintiff friendly US state court or even in US Federal Court. Once they get judgments against them in the $10's of millions and they accumulate, they will hurt the stock value of the company and in turn force the Murdoch's to sell off their stock or spin off parts of their company. It will be interesting to see what happens at next year's AGM of shareholders.
GDB From United Kingdom, joined May 2001, 13457 posts, RR: 77
Reply 8, posted (3 years 10 months 2 weeks 11 hours ago) and read 1131 times:
I so admire Tom Watson, it is a brave man who takes on these scumbags, many MP's have admitted they were just too scared to.
If you lead a pretty blameless life, that does not stop them, if they cannot find dirt they make it up, always have done.
All this because in 2006 Medusa Brooks (surely the most stupidly incompetent editor in UK tabloid history), got it into her head that Watson was a key player in Tony Blair being forced out (he wasn't), then Watson got to hear about her threats to 'get him'.
Shocked, bewildered even, he started digging. When your already a target of NewsCorp's bile you've got little to lose anyway.
Myself, I'm not not surprised of what happened at the AGM, however the likes of Watson even being there 6 months ago would have been inconceivable.
Back then, our wonderful government were set to out do in one Parliamentary term, 30 years of kowtowing to Murdoch, now all that is just so politically toxic.
Cameron won't be sharing Christmas meals with Medusa this year.
If he appears again in the Commons, I don't think Rupe's doddery old man act will work again, it soon got out that upon laving the House he was as sharp as a pin.
Not usually the subject of admiration I know, but also kudos to both Steve Coogan and Hugh Grant, celebs with balls.
Baroque From Australia, joined Apr 2006, 15380 posts, RR: 59
Reply 9, posted (3 years 10 months 2 weeks 8 hours ago) and read 1117 times:
Quoting GDB (Reply 8): If he appears again in the Commons, I don't think Rupe's doddery old man act will work again, it soon got out that upon laving the House he was as sharp as a pin.
Not usually the subject of admiration I know, but also kudos to both Steve Coogan and Hugh Grant, celebs with balls.
I guess none of us really knows how brave Tom Watson had to be, and how many warnings against his course of action he had to ignore. But I agree, very brave of him and equally, not to be imagined just a year ago.
And to the other two. Which makes Steven Mayne's long running act all the more remarkable. He has been a near solo act for years. So let us have a cheer for him too.
And look forward to the next HoC questioning. One gets the feeling that the atmosphere will be oh so deliciously more frigid this time. Being lied to twice is probably not going to go down well with the MPs. Still trying to work out how News got away with it for so long the first time. Having so many police sewn up the first time must have been a help I suppose!