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. Some of News Corp.'s acquisitions, including MySpace, the Wall Street Journal and Elisabeth Murdoch's Shine Entertainment were questioned as well.
During the meeting Murdoch withstood the criticism, sometimes with humor and sometimes denying accusations being made against his and the company. While some mistakes were made, including MySpace, he insisted that financially, the company has outperformed its peers in the entertainment industry.
"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.
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."
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.