The News Corporation votes are in and the record protest votes have duly been delivered. In spades.
No News Corp director has ever had more than 150 million votes against, so the records were clearly smashed in 2011 with as much as 80% of the independent shareholders voting to remove the Murdoch boys and other compliant or affiliated directors.
The most incredible thing about the votes was the way shareholders so accurately ranked the directors in terms of who should go. From the top, the against votes were as follows:
- James Murdoch: 232 million
- Lachlan Murdoch: 224 million
- Natalie Bancroft: 222.2 million
- Andrew Knight: 214 million
- Arthur Siskind: 200.5 million
- David Devoe: 150.6 million
- Sir Rod Eddington: 111.4 million
- Viet Dinh: 94.8 million
- Rupert Murdoch: 91.8 million
- John Thornton: 82.4 million
- Peter Barnes: 74.5 million
- Jose Maria Aznar: 70.7 million
- Chase Carey: 61.6 million
- Joel Klein: 23.4 million
- James Breyer: 6.8 million
Compare that with last year’s figures when the biggest against vote was James Murdoch’s 62 million.
No doubt Rupert and his supporters will point to the fact that James was re-elected with 433 million votes or 65% in favour. But once you strip out the 317 million votes controlled by the Murdoch family and the 57 million votes held by their great supporter, Saudi Prince Alwaleed bin Talal, there was only 60 million neutral shareholders who supported the re-election of James after the phone hacking scandal.
It is clear that James, Lachlan, Andrew Knight, Arthur Siskind and Natalie Bancroft all would have been removed from the board but for the support of the Murdoch family. And this is before considering the infamous gerrymander which denies a vote to almost 70% of the News Corp shares on issue.
If non-voting shareholders were empowered, these same directors would all probably have been removed even with the Murdochs voting their full 13% economic interest in favour.
When asked repeatedly to reveal the proxies at the AGM in Los Angeles on Friday, executive chairman Rupert Murdoch refused and at one stage even described them as “private”. Later he said they would be released two hours after the AGM, but the board ended up taking 72 hours when they were dropped simultaneously to the SEC and the ASX at about 8.30am this morning.
The scandal of Rupert refusing to reveal the votes — something he has happily done at several previous shareholder meetings — had the effect of denying the AGM an opportunity to discuss the implications of these record protest votes.
The very obvious question to ask lead independent director Sir Rod Eddington would have been as follows: you represent the 87% of News Corp owned by non-Murdoch shareholders, how are you and the independent directors going to respond to as much as 80% of the neutral shareholders voting against certain directors?
Instead, Sir Rod will no doubt be hoping he can remain publicly silent on News Corp matters for another 12 months, just as has been over the previous year following this exchange at the 2010 AGM. But the momentum for change from these votes will probably prove overwhelming.
Rupert’s undemocratic, evasive and bunker-like behaviour at the AGM was the best evidence you could ever want for why News Corp should have an independent chairman who can at least get the basics rights around conduct of the AGM and the timely release of voting figures to investors.
These arguments mounted by the Australian Shareholders’ Association against James, Lachlan, Siskind, Knight and Dinh are the same arguments which motivated many proxy advisers institutions to target them.
Why should former News Corp group general counsel Siskind remain a Murdoch loyalist on the board pocketing more than $US3 million a year when he is 71 and was supposed to have retired in 2005?
Another former executive, Knight, looks particularly vulnerable because he has chaired the remuneration committee since its inception almost a decade ago and the remuneration report was opposed by 232.1 million shares, fractionally more than the protest James Murdoch received.
It’s clear investors are very upset Rupert helped himself to a 47% pay rise to a record $US33.3 million even after the phone hacking scandal shattered the company’s reputation and cost shareholders hundreds of millions of dollars.
As has been previously explained, US law is different to Australia because Rupert was able to vote his stake in favour of his own pay packet. The remuneration would have been comfortably defeated if News Corp was still based in Adelaide and the subject of the new two strikes law.