News Corp. Chairman, CEO Rupert Murdoch Gets an Earful at Shareholder Meeting
Stockholders assailed the entertainment company for the phone hacking scandal, executive pay and the MySpace deal as the mogul confronted a small, but vocal group of critics.
It is inconceivable that Rupert Murdoch could lose his News Corp board seat, given he controls more than 40 percent of the shareholder vote, but he got an earful at the conglomerate's annual meeting in L.A. on Friday from shareholders who wish he would.
At the meeting on the Fox Studios lot, shareholders representing individuals, religious groups and labor unions made their cases against Murdoch in one-minute bites from two standing microphones.
The meeting, which lasted about 1 hour and 40 minutes, was sparsely attended, but the few who tried to convince others to vote against Murdoch were a passionate bunch, and were reprimanded for speaking too long.
"I'd hate to call you a liar," Murdoch told one shareholder who stood multiple times to challenge the board and insinuated that his vote for Murdoch was still up for grabs. "I know exactly how you're going to vote," the mogul added.
British parliamentarian Tom Watson, who had become a shareholder to be able to attend the meeting, spoke of News Corp. conspiracies involving the Queen of England, a prince, a prime minister and others, which was dismissed as rumor by Murdoch, who stressed that most of the information authorities have now about the phone hacking and other scandals came from News Corp. itself, because it has been cooperating with investigators. Watson has led the charge against Murdoch in the phone hacking scandal, and he said that there were also cases of computer surveillance in what he said would become a new headache for News Corp.
"You haven't told any of your investors what is to come," he told Murdoch.
Beyond phone hacking, Murdoch was hearing shareholders accuse him of selling DirecTV too cheaply and paying too dearly for MySpace in an acquisition and later sale, which Murdoch admitted went wrong and was "mismanaged." "I made a huge mistake," he said. Shareholders also complained about a share price that has languished. Some also accused the board of paying Murdoch and other top executives too much money.
It took a while, but eventually a few shareholders spoke in favor of Murdoch. After identifying himself as a 22-year long Fox employee, one man praised Murdoch as a visionary who didn't allow News Corp. to be sucked into the hype of the Internet as did the company formerly known as AOL Time Warner. The shareholder's only complaint was that News Corp. doesn't pay a large enough dividend.
Others stood later to ask Murdoch to defend News Corp. and Fox better - employees. "We are kicking ass," one Fox employee said. Another spoke of the thousands of jobs News Corp. creates. Another employee said that in his years of service he has never been asked to do anything unethical.
One shareholder was fellow billionaire media mogul Haim Saban. "My money's on you," he told Murdoch.
"I'm stunned that I've heard so many questions, and not one question about the operations about this great company," Saban said. "All about, all kinds of mishegas -- governance -- I don't know what. What about the operations?"
Saban asked him if News Corp. could revisit a deal to acquire full control of U.K. satellite TV firm BSkyB, a plan that the firm had dropped amid the phone hacking scandal. Murdoch responded that the company had no current plans to revisit a play for BSkyB.
The next shareholder to ask a question was also a Murdoch supporter and he began by defining "mishegas" for the audience. "It means craziness," he said.
Murdoch began the meeting by apologizing for the phone-hacking scandal that has brought News Corp. "understandable scrutiny and unfair attack," and he also reminding shareholders that they've invested in an extraordinarly successful company.
"The story of our company is the stuff of legend," he said.
"We succeed because we deliver compelling content," Murdoch said. "Here's one staggering statistic: Each year we produce more than 150,000 hours of original television content around the globe."