Second California pension fund votes against Rupert Murdoch
The California State Teachers' Retirement System said Monday that it had withheld its votes for the entire slate of nominees to the News Corp. board in advance of the company's annual shareholders meeting in Los Angeles on Friday.
CalSTRS owns 6.1 million shares of News Corp. Class A common stock and 35,200 voting shares of News Corp. Class B stock, said Ricardo Duran, the pension fund's spokesman.
"As a publicly traded company, we feel that News Corp. should be held to the same governance standards as other companies in our portfolio," Duran said. "The recent scandal has underscored the need for the highest ethical standards at News Corp."
Reporters at Murdoch's now-defunct London tabloid News of the World eavesdropped on messages left on the cellphones of royal family members, celebrities, crime victims and fallen soldiers.
Murdoch, who controls about 40% of the company's voting stock, is expected to face questions Friday about his stewardship of the company. The phone hacking scandal has roiled the company, raised questions about Murdoch's leadership and succession plans and prompted inquiries into News Corp.'s business practices by the U.S. and British governments.
Last week, the nation's largest pension fund, the California Public Employees' Retirement System, said that it had withheld its votes for Rupert Murdoch and his two sons Lachlan and James, as well as other non-independent directors. CalPERS holds 1.4 million shares of News Corp. Class B stock.
CalSTRS went further. The teachers' pension fund managers did not vote for any of the nominees to News Corp.'s board, Duran said.
The group has several concerns about Murdoch's iron grip on News Corp. management, specifically the company's dual-class stock system. The two classes of stock allow Murdoch and his family to control the voting shares even though their economic interest in the company is much smaller.
CalSTRS also said there were not enough independent voices on News Corp.'s board.
"We believe that two-thirds of a company's board should be independent, and News Corp's slate of nominees as it is currently constituted falls short of that goal," Duran said.
The development was first reported by the Sacramento Bee.
Last week, News Corp. issued a statement saying the board had taken “decisive action” to hold people accountable and take measures to “prevent something like [the British phone hacking scandal] from ever occurring again.”
-- Meg James
Photo: News Corp. Chairman Rupert Murdoch. Credit: Noah Berger / Associated Press.