Investors withhold votes for N.Y. Times directors

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NEW YORK -- Shareholders delivered another rebuke to the New York Times Co. Tuesday, withholding as much as 42% of the vote for directors at the company's annual meeting.

While the vote is largely symbolic since the Sulzberger family remains in control of the company, the significant withhold vote reflects growing impatience among investors about the company's lagging stock price.

The size of the withhold vote was even larger than last year, when 30% of investors withheld their votes for directors elected by holders of the company's publicly traded shares.

At the company's annual meeting in New York Tuesday, the Times announced that the four directors elected by Class A shareholders received votes equaling at least 58% of the votes cast, indicating a withhold vote of as much as 42%. The company did not provide a breakdown of votes by director.

The remaining nine directors easily won election. Only holders of the Times' Class B shares, which are controlled by the Ochs-Sulzberger family, vote for those directors.

In the leadup to the vote, two shareholder advisory firms had recommended that investors withhold their votes for the publicly elected directors as a gesture to press for corporate governance changes, including the separation of the roles of chairman of the company and publisher of the Times. Both roles are currently held by Arthur Sulzberger Jr.

Addressing the shareholder meeting, Sulzberger said he shared investors' dissatisfaction with the company's stock price performance and said the company would continue to work to contain costs, review its portfolio of businesses and grow revenues with new initiatives.

At the conclusion of the meeting, the company released a statement saying that all directors indicated they intended to remain despite the withhold vote.

Sulzberger said in a statement that "We understand shareholder frustration as reflected in today's vote" and promised to "listen carefully to the issues raised by our shareholders."

One investor in particular has been vocal in his frustration with the Times' financial performance, Morgan Stanley Investment Management fund manager Hassan Elmasry, who says the company's two-class share structure fosters a lack of accountability to shareholders.

That structure, which has been in place since the Times went public in 1969, can only be changed by a vote of the Sulzberger's family trustees, and Sulzberger repeated Tuesday that the family has no intention of doing so.

Shares of the New York Times fell 8 cents to $23.90 Tuesday during midday trading on the New York Stock Exchange.
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