News Corp. shareholders nix splitting chairman, CEO posts

News Corp. shareholders on Tuesday elected all directors, ratified the executive pay and rejected all shareholder proposals, according to the preliminary results of Tuesday’s annual meeting in Los Angeles.

Of the shareholder proposals, the $245.3 billion California Public Employees’ Retirement System, $152.5 billion California State Teachers’ Retirement System, $157.4 billion Florida State Board of Administration and the C$117.1 billion (US$118.8 billion) Ontario Teachers’ Pension Plan voted for the proposal calling for an independent chairman of News Corp.’s board of directors.

Christian Brothers Investment Services, joined by U.K. co-filers, the £10.5 billion ($16.9 billion) Greater Manchester Pension Fund and £1.5 billion Dorset County Council Pension Fund sponsored the independent chairman proposal. In class B voting stock, they own 517 shares, 60,387 shares and 7,100 shares, respectively.

Institutional Shareholder Services recommended shareholders support the independent chairman proposal.

In its proxy statement, News Corp. opposed the proposal, saying: “Independent oversight of management is critical to the company’s corporate governance structure. The board does not consider the mandated separation of the chairman and CEO necessary to accomplish this goal. The company achieves independent oversight of executive management through the composition of the board, use of an independent lead director and the company’s corporate governance policies and practices.”

Julie Tanner, assistant director of socially responsible investing at Christian Brothers Investment Services, said in prepared remarks at Tuesday’s meeting: “This reform is absolutely necessary at News Corp. The lack of internal controls at the company has had real and lasting repercussions. It has resulted in shuttering a newspaper, criminal investigations, the canceled BSkyB acquisition, eroded public trust, and it has tarnished the company’s reputation. News Corp.’s board has been promising sweeping changes since the scandal first broke. True sweeping change should start with the appointment of an independent chair and with truly independent voices on the board.”

On the shareholder proposal calling for an end to dual-class shares all the pension funds voted in support, while ISS also recommended supporting it.

On a shareholder proposal calling for elimination of a supermajority voting requirement, CalPERS, CalSTRS and the OTPP voted against, while FSBA voted in favor. ISS recommended voting against.

On the election of directors, CalPERS voted to oppose K. Rupert Murdoch, chairman and CEO; James R. Murdoch, deputy COO and chairman and CEO of News Corp. International; and Lachlan K. Murdoch, deputy COO. CalSTRS voted against all directors.

Florida SBA voted against James and Lachlan Murdoch; Natalie Bancroft; David F. DeVoe, CFO and senior executive vice president; and Roderick I. Eddington, lead director. OTPP voted against James Murdoch, Ms. Bancroft, Mr. DeVoe and Mr. Eddington.

ISS recommended voting in favor of all director nominees.

All the pension funds voted against ratifying executive compensation. ISS also recommended voting against ratifying the pay.

Vote totals were not available by press time.