NEW YORK (Reuters) - James Murdoch, the presumed heir to the News Corp media empire, suffered a sharp rebuke from shareholders, with nearly 35 percent of its investors voting against his reelection to the board.
James, the youngest son of News Corp Chairman and CEO Rupert Murdoch, garnered only a 65 percent approval vote. Murdoch eldest son, Lachlan, didn’t fare much better, garnering just under 34 percent of votes against his reelection. Unlike his brother, Lachlan does not hold an operating role at News Corp.
Investors supported Rupert Murdoch much more than his children, reelecting the company patriarch with a nearly 85 percent approval. News Corp shareholders also voted overwhelmingly against a proposal to separate the chairman and CEO roles, apparently satisfied to have Murdoch hold both titles. Less than 1 percent voted for that proposal.
The percentage of against votes cast for Murdoch is even higher after accounting for the fact that the Murdoch family controls 40 percent of News Corp’s voting shares. Also, the company’s largest individual shareholder, Prince Al-Waleed bin Talal, voted his 7 percent stake in favor of the family.
“Clearly, shareholders are upset by the hacking scandal and the continued disproportionate control of the company by the Murdochs,” said Gabelli & Co analyst Brett Harriss.
A phone hacking scandal at New Corp’s tabloid News of the World in London has enveloped the company over the last year. This has resulted in the paper’s closure, the arrests of more than a dozen former executives and employees, and the abandonment of News Corp’s $12 billion deal to acquire the outstanding shares of BSkyB it doesn’t already own.
James Murdoch, who had already appeared before a special committee of Parliament, is scheduled to be reexamined on November 10 after several former executives disputed key facts in his earlier testimony.
Reporting by Peter Lauria; Editing by Richard Chang