Tuesday, 9 October 2012

News Corp news

News Corp's AGM is approaching rapidly - it takes places this time next week - but what can we expect this year? Last year there were very large votes against a number of directors, with James Murdoch topping the unpopularity poll with a large majority of non-Murdoch shareholders voting against him. This year will inevitably be different as ISS, inexplicably, has recommended supporting the re-election of ALL board members. This comes after the DCMS committee report, Ofcom 'fit and proper' decision etc. I'm a bit gobsmacked that ISS doesn't think that this might raise questions about Murdoch Junior's suitability for the board.

Therefore perhaps this time around we ought to focus attention on the shareholder resolutions filed at the meeting - one seeking an independent chair (and thus also a split in Murdoch Senior's roles) and one seeking to abolish the dual class share structure which currently shields the company from minority shareholder accountability. We already know that both ISS and Glass Lewis, the two big advisers, have backed the resolutions, which suggests that they will get significant votes in favour. I reckon anything over 20% will be fairly good going given the way the deck is stacked.

There are also some rumblings about the FCPA, which is a potential threat to the company that hasn't yet been realised. This is all tied up with the payments made by News International journos to cops and others for info.On the face of it these payments were made to commercially benefit the company (since they elicited info which sold newspapers), so it does look like News Corp could indeed be on the hook. But the other question that has surfaced is whether the auditors (Ernst & Young) should shoulder any blame. (There's more going on here which I will blog about at a later date).

And fairly soon after News Corp we have the BSkyB AGM (1st Nov I think), where James Murdoch faces re-election as a NED (though no longer a chair, of course). He has been severely criticised by the broadcasting regulator, with a veiled suggestion that a decision might have been different on 'fit and proper' had he remained as chair. No surprise, but I think he should have left the board entirely, and I hope shareholders vote against his re-election, but, knowing the timidity of the asset management industry, I expect he'll get through fairly easily this year.

I'll post up more info on both AGMs as I get it. 

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