Murdoch Faces The Music


News Corp.'s annual meeting of shareholders Friday was expected to be a contentious one and it didn't disappoint. Chairman and CEO Rupert Murdoch was grilled for two hours by shareholders still outraged by its handling of a British phone hacking scandal and threatening to vote against a slate of company directors, including Murdoch and his sons James and Lachlan.
Several organizations, like corporate watchdog Institutional Shareholder Services, had urged shareholders to vote against 13 of the 15 directors up for re-election at the meeting, including Rupert Murdoch, his son James and chief operating officer Chase Carey, because of its handling of the hacking scandal. While other shareholders had said they would vote against the slate - such as the California Public Employees Retirement System - Murdoch's 40% of the vote and the 7% voting stake of close ally Saudi Prince Alwaleed bin Talal and other supporters were expected to hold the day.
In a statement, News Corp. said that all directors were elected, adding that details of the vote will be filed with the Securities and Exchange Commission early next week.
Murdoch kicked off the meeting, held at the Zanuck Theater at News Corp.'s Fox Studios in Los Angeles, on a humble note, apologizing profusely for the media giant's role in the phone hacking scandal at its News of the World tabloid, but also showing pride in the company's legacy.
"The story of our company is the stuff of legend - from a small newspaper in Adelaide, to a global corporation based in New York with a market cap of $44 billion... informing, entertaining and educating at least a billion people each day," Murdoch said in his opening statement.
The specter of the phone hacking scandal loomed heavily at the meeting and outside the theater, where about 150 protesters according to some reports carried signs critical of management's handling of the controversy. News Corp. shut down the News of the World in July, after it was revealed that reporters at the paper had hacked into the voice mail accounts of scores of private and public figures, including murdered British teenager Milly Dowler, hampering a police investigation. Earlier Friday News Corp. announced that it had agreed to pay the Dowler family £2 million ($3.2 million) and to donate £1 million pounds ($1.6 million) - which was to come from Murdoch personally - to charities of the family's choosing.
Murdoch fielded several critical questions from long-time critic and director of the Australian Shareholders Association, Stephen Mayne. At one point, Mayne complained that shareholders weren't allowed to address each of the 15 board members up for re-election, adding that many, including himself, had not decided how they would vote their proxies.
"I hate to call you a liar, but I don't believe you," Murdoch told Mayne. "I know how you are going to vote."
Mayne has been an outspoken critic of News Corp. during the phone hacking scandal, and has called for management to step down.
Murdoch also weathered an onslaught from British Member of Parliament Tom Watson, who asked the chairman if he was aware that the scandal had spread to accusations of computer hacking. Murdoch said he had not.
"I promise you, we will stop at nothing to get to the bottom of this and make it right," Murdoch said during the meeting.
Murdoch did field questions from several supporters who praised his stewardship of the company, including media mogul Haim Saban, who lamented that not one question was asked concerning News Corp.'s operations.
"My money is on you," Saban said.