* Proposals on independent chairman, pay, shares defeated
* News Corp shares have gained about 40 percent in past year
* Calm atmosphere replaces protests, outrage of last year
By Lisa Richwine
LOS ANGELES, Oct 16 Rupert Murdoch survived yet another attempt to oust him as chairman of his News Corp media empire on Tuesday, the second straight year he has defeated critics who say his family wields too much control over the company.
Shareholders re-elected Murdoch, his two sons, Lachlan and James, and the rest of the company's returning board members during a 75-minute meeting in Los Angeles. They also voted against proposals that would have separated the chairman and CEO roles held by Murdoch and eliminated News Corp's dual class stock structure, which gives the Murdoch family voting control of the company.
Only 5 percent of investors voted against re-electing Murdoch during this year's meeting. James, who was seated in the front row, received a 17 percent against reelection vote, while 21 percent of shareholders voted against reelecting Lachlan, who did not attend the event.
A year ago, about 16 percent of investors voted against Murdoch. James and Lachlan fared worse, with about 35 percent of shareholders voting against their re-election to the board. But the Murdochs were still reelected because they control 40 percent of the voting rights.
As he did last year, Murdoch, 81, began Tuesday's annual meeting by trying to make amends for "some wrongdoings at some publications in the U.K.," a reference to the telephone-hacking scandal that prompted the closing of the News of the World tabloid.
That was about the only similarity with last year's meeting, which came at the height of the scandal and featured about 100 protesters who attracted television cameras with signs that read: "Murdoch isn't above the law" and "Big Media, Big Money, Get Out." Tom Watson, a British member of parliament, also flew in to voice complaints about the hacking scandal.
By contrast, the atmosphere at Tuesday's meeting was extremely subdued. Only about 80 people, including reporters, were in attendance at the Zanuck Theater on the 20th Century Fox lot in Los Angeles. Standing at a podium emblazoned with the News Corp logo, Murdoch looked out into a sea of velvet chairs that were three-fourths empty. Rarely was he confronted, and when he was, he simply smiled and answered politely.
Prior to the meeting, two investors, Christian Brothers Investment Services and Local Authority Pension Fund Forum, put forth a resolution to elect an independent chairman for News Corp. California's two largest public pension funds - the California Public Employees' Retirement System (Calpers) and the California State Teachers' Retirement System (Calstrs) supported the move to split the jobs.
"Having a CEO serve as chair presents a conflict of interest and is an impediment to a strong independent board," Julie Tanner, assistant director of socially responsible investing for CBIS, said at the meeting. "The lack of internal controls at the company has had real and lasting repercussions."
But that resolution was overwhelmingly rejected, with 70 percent of investors voting against the measure.
Another speaker, Laura Campos of the Nathan Cummings Foundation, urged an end to News Corp's dual class structure, a proposal that also was defeated. "There is no good reason for you to hold voting power that is so wildly out of proportion with your economic interest," she told Murdoch.
Murdoch responded that this family's interests "are the same as all shareholders - to build a great company."
Prominent proxy firm Glass Lewis recommended before the meeting that clients vote against six directors, including James and Lachlan Murdoch. The firm cited concerns over having too many members of the Murdoch family on the board and pointed to the large amount of shareholders who voted against Murdoch's sons last year. Calpers and Calstrs also opposed some or all directors.
This year, however, the Murdochs won the support of proxy advisory group Institutional Shareholder Services, which had urged clients to vote against almost all of the board members a year ago. ISS urged shareholders to back the slate this year.
In the past year, News Corp shares have gained about 40 percent and the company announced a plan to split into two businesses, one for entertainment and one for publishing, a move to boost the value of the film and television assets.
Emboldened by the share price gain, Murdoch tweeted a message to his detractors before the meeting: "Any shareholders with complaints should take profits and sell!" he wrote on Twitter last week.
Asked about the Tweet at the meeting, Murdoch said: "When you buy the stock, you know what the company is. If you don't like it, don't buy the stock."
In addition to the Murdochs, News Corp's 14-member board includes News Corp president and chief operating officer, Chase Carey, and former assistant attorney general Viet Dinh, who spearheaded internal investigations of the hacking scandal. Investors also voted to elect new board additions: Elaine Chao, former U.S. labor secretary, and former Colombia Prime Minister Alvaro Uribe.