Murdoch to News Corp. Shareholders: 'Our Company Is Undervalued'
The mogul updated shareholders at the annual meeting in Los Angeles, saying: "We’ve acknowledged the serious wrongdoings that occurred. We’ve had to work hard to make amends – very hard."
“We never thought of ourselves as a conventional company,” News Corp. CEO and chairman Rupert Murdoch told shareholders at the company’s annual meeting on Tuesday. “We never try to identify trends to follow, we don’t quiver in the face of new technology.”
Speaking at the Fox studio lot in Los Angeles, Murdoch opened the proceedings with further discussion about a devastating phone-hacking scandal that has roiled the company. “We’ve acknowledged the serious wrongdoings that occurred,” Murdoch said. “We’ve had to work hard to make amends – very hard. But just as important, we seized the moment as an opportunity to strengthen our governance and our organization in key ways.”
He then outlined highlights of a “modernized system of compliance” that has been remade “from top to bottom.” Murdoch also offered an update on what he called “the transformation of one of the world’s most successful media companies,” the split of News Corp. into two publicly traded companies, one focused on news, publishing and education and the other on media and entertainment.
“We are pursuing this for a simple reason,” he said. “Notwithstanding our success, our company is undervalued. With this separation we will free up each company to better deliver on its promises to customers across the globe.”
Murdoch’s remarks came prior to a vote on a few initiatives that, if passed, would have lessened his and his family’s control over News Corp. Some shareholders, including two of the nation’s largest pension funds, made it clear they aren’t happy with the board of directors.
On Tuesday, the California State Teachers Retirement System, known as CalSTRS, said it voted against the re-election of all of News Corp’s. directors. A day earlier, the California Employees Retirement System, known as CalPERS, voted against the reelection of Rupert Murdoch as board chairman and his two sons, Lachlan and James, as directors.
Other initiatives put forward but not expected to pass included splitting the CEO and chairman functions so that Rupert Murdoch could not retain both positions, and a proposal to do away with the company’s dual class of voting stock. Concerning the latter, a CalSTRS representative spoke of “a history of disenfranchisement” because the dual structure, he said, gives the Murdoch family outsize voting power.
The company will announce the voting results on the proposed rule changes by late Tuesday. All nominated directors were elected, including new nominees, former Labor Secretary Elaine Chao and former Columbian President Alvaro Uribe. Tuesday’s meeting was more subdued than last year, when a handful of protesters showed up near Fox studio with signs deriding Murdoch and the company and shareholders inside the meeting aggressively challenged the company over its governance practices and complained about the phone-hacking scandal.
Murdoch made the point that the stock is up 45 percent since last year’s meeting. Other concerns raised by shareholders this year included executive pay – which some complained was too high -- and a little about politics. Concerning the latter, one man asked for more liberal columnists at the Wall Street Journal, while another man presented a petition asking for Bill O’Reilly to stop putting gay-rights activist Wayne Besen from Truth Wins Out on his show because he “is not worthy of Fox News” and is bigoted toward conservatives. Murdoch said he’d pass the petition to O’Reilly and FNC head Roger Ailes.
One woman told Murdoch “thank you for giving me news to be an informed American,” while another woman asked about Murdoch’s recent tweet advising that “any shareholders with complaints should take profits and sell.” “
"There are plenty of media stocks to buy if you don’t like this one,” Murdoch told the woman.