News Corp. Urges Shareholders to Vote for Its Board Nominees, Citing Performance, Governance
The entertainment conglomerate also pushes for the approval of its executive compensation in an advisory vote at its annual meeting next week amid growing pressure from investor advisory firms and says it has taken "decisive actions" in the wake of the phone hacking scandal.
NEW YORK - Rupert Murdoch's News Corp. on Tuesday urged its shareholders to vote for its slate of 15 board members amid growing pressure from investor advisory firms to vote against many of the entertainment conglomerate's directors at its annual meeting next week. It also urged shareholders to vote for the approval of the company's executive compensation in an advisory vote to be held next week.
On Monday, Institutional Shareholder Services recommended that investors vote against chairman and CEO Murdoch, his sons Lachlan and James Murdoch and others who are nominated for a board seat again. Overall, it opposed 13 of 15 board candidates. It also criticized top executives' compensation.
Observers have highlighted that the Murdoch family and its allies control about half the shareholder vote, meaning that a lack of shareholder support for directors at next week's meeting is likely only to be symbolic.
"Certain proxy advisory firms, including ISS’s Proxy Advisory Services, have issued reports containing voting recommendations on our director nominees and on the advisory vote on executive compensation that we vehemently disagree with," News Corp. said in a communication contained in a regulatory filing on Tuesday. It listed five points to support its arguments.
Discussing its directors, it cited "strong company performance" amid a "world economy struggling with uncertainty" and argued that "all of our director nominees are outstanding board members who are focused on corporate governance." The company also said its board is full of "sophisticated, world-class directors." In a further explanation, it highlighted: "The majority of the director nominees are independent under NASDAQ listing rules and are very experienced and well qualified to serve News Corporation effectively."
On the compensation issue, News Corp. also made two points. It said that "our CEO’s compensation is aligned with performance." In addition, president and COO Chase Carey has an employment agreement that "increased the total portion of his compensation opportunity that is linked to performance and resulted in a stronger pay-for-performance model," News Corp. said.
The conglomerate also discussed the phone hacking and closure of the News of the World. "News Corporation has already taken decisive actions to hold people accountable and will take all prudent steps designed to prevent something like this from ever occurring again," it said. News Corp. also confirmed previous reports that its Management & Standards Committee is "conducting an internal investigation of the three other titles at [U.K. newspaper unit] News International."
"Your vote is important," News Corp. concluded its appeal. "Thank you for your ongoing support of, and continued interest in, News Corporation."