Rupert Murdoch has done a lot of ducking and weaving to avoid answering questions at his AGMs over the years, but this morning’s effort at Fox Studios in Los Angeles was arguably his most brazen.
Only about 10 retail shareholders bothered to go through the rigmarole of registering at the Century Park West car park opposite Westfield’s impressive Century City shopping centre before taking the company shuttle. Four buses were lined up, but only one was needed.
I was first to register at 9am for the 10am 21st Century Fox AGM and scored a personalised bus trip as the only passenger.
We saw a bit of Modern Family activity on the way through Fox Studios, but it was obviously too much effort to offer shareholders a tour of the sprawling 20-acre site.
There was a reasonable spread available before the meeting but no directors or senior execs circulated with shareholders and the food was gone when the meeting finished after just 27 minutes. The 10 shareholders and one reporter from the LA Times were shuffled onto the bus straight after the meeting and off we went back to the parking lot. At least the driver was good enough to drop me at The InterContinental.
On entering the Zanuck Theatre, shareholders were handed the “rules and procedures” that would apply. They included the following:
“Each speaker is limited to a total of no more than two questions or comments that must … be no more than one minute in length.”
Many companies attempt to apply some form of informal limit, but this is usually for each visit to the microphone and only applies after debate has been going for more than an hour.
Australian law also requires discussion and debate on each separate resolution. Murdoch relishes the lax American system, which tolerates debate on all resolutions being done as one job lot.
Rupert verbally reminded shareholders of the limit during his initial 15 minutes in charge of the microphone, and when I stepped up as the first questioner, general counsel Gerson Zweifach, who is not even a director and shouldn’t have been on the stage , firmly repeated the rule and said it would be enforced.
The opening questions focused on the Murdochs: how was Rupert splitting his time as executive chair of two companies? How were things working out with Lachlan as co-chair — would he be running part of the meeting? And why did the family take out a record salary of $64 million in 2013-14?
Remuneration committee chair James Breyer was a no-show, so Sir Rod Eddington chimed in saying Rupert was paid less than other big media CEOs. Proxy adviser Glass Lewis recommended a vote against, but ISS was in favour and shareholders weren’t given the precise voting numbers — though they were assured there were no meaningful protest votes on any resolution.
Despite claims from the top table that all resolutions were overwhelmingly supported, about 20% of the non-Murdoch votes cast opposed the re-election of James and Lachlan Murdoch.
Audit committee chair and former News Corp exec Sir Rod Eddington was the next most unpopular director and the remuneration would have gone close to a 25% strike had the Murdochs not been able to vote for their own pay as is prohibited in Australia.
The Lachlan question was ignored and when prompted Rupert said the two jobs was fine as all the key execs — James Murdoch, Chase Carey and Robert Thomson — had their offices in New York next to his.
I then sat down so another shareholder, Aaron Epstein, could ask a question and he got a laugh saying he hadn’t come from Australia but rather North Hollywood.
“It was most disappointing to think that Keith’s two grandsons were sitting mutely on stage alongside their father as he embarrassed the family yet again.”
When no one got up and we were still just 20 minutes into the meeting I returned to the microphone, and management in the form of Zweifach again attempted to prevent any more discussion saying I was already in breach of the rules having asked two-and-a-half questions.
“I guess we’ll see you tomorrow [at the News Corp AGM] for two more,” he bluntly declared, even though he doesn’t even work for News Corp.
I blustered through, appealing for fairer treatment and the company’s great track record on free speech. Rupert reluctantly agreed to one last question, which turned into an omnibus about the delisting of Fox from the ASX and the Time Warner takeover bid.
Rupert said the company had been expecting a deluge of Australian selling but had been surprised that many had instead chosen to hold on.
And on Time Warner he dismissed the question about why voting shares hadn’t been offered, saying it wasn’t an issue that came up with the directors. The bid failed because he wasn’t prepared to increase it by US$10 a share.
After I sat down, security promptly whisked away the fixed microphone I’d deliberately sat next to in the left aisle.
But there was still one in the right aisle, and an elderly shareholder got up and asked about the potential for higher dividends.
With no microphone to use and as Rupert then proceeded to close the meeting, I shouted out a question: “Any plans to retire, Mr Chairman?”
This does not come through on the webcast of the meeting, which should be listened to as a case study for chairs on how not to facilitate shareholder engagement at AGMs.
Rupert soldiered on and quickly adjourned the meeting when he meant to close it.
A slightly sheepish Sir Rod Eddington popped over for a quick chat on remuneration after the meeting, and he agreed that time limits should apply to the meeting as a whole — not the way dictatorial Rupert played the game after just 27 minutes of action.
I told Eddington to tell Jac Nasser that if a similar paranoid regime presides over tomorrow’s News Corp AGM I would run against him at next year’s BHP Billiton AGM on a platform highlighting his complicity in the undemocratic fiasco of this morning. They can’t say notice hasn’t been given.
Before entering the AGM, I overhead one Fox staffer say to a colleague, “We have perfected the art of making this meeting as boring as possible.”
For a public company which makes billions out of free speech and open communication, that’s a very sad thing to be proud of.
So next time an elected official comes under sustained questioning from a News Corp hack such as this, someone like Clive Palmer could quite credibly restrict the questioner to just two questions over two minutes before removing the microphone.
A great censorship-busting journalist like Sir Keith Murdoch would be turning in his grave if he knew how controlling and undemocratic his son had become in his old age.
And it was most disappointing to think that Keith’s two grandsons were sitting mutely on stage alongside their father as he embarrassed the family yet again.
What’s to worry about a fast-paced one-hour AGM with 45 minutes of debate? Having handled more than eight hours of public questioning over phone hacking and almost four hours of debate with me during 12 encounters over the years, it’s such a shame the leader of the world’s most powerful family is seemingly running scared from scrutiny.
* Stephen Mayne will be attending the News Corp AGM in Los Angeles tomorrow. Listen live to the webcast from 5am AEST.