Misys remuneration revolt

Dunno how I missed this (pdf). I'm always a bit sceptical when larger companies' RNS statements on AGM results simply say that 'all resolutions put to the meeting were passed', and this is a good example why. Technically 100% accurate, but disguises a 37.5% vote against the remuneration report, which will put the company amongst this year's outliers.

UPDATE: Actually to be fair, having checked, Misys took the same approach to their AGM statement last year.

News Corp news - ISS recommendations

And it's not getting any better for News Corp...

Investor adviser Institutional Shareholder Services said owners of News Corp. stock should vote against 13 of the media company’s 15 directors, including CEO Rupert Murdoch and his sons, in light of the phone-hacking scandal at the company’s former News of the World tabloid.

ISS, which advises institutional shareholders on corporate-voting matters, said the phone-hacking scandal “laid bare a striking lack of stewardship and failure of independence” of News Corp.’s board, according to an executive summary of the report released Monday by ISS.

News Corp. owns The Wall Street Journal.

The company said it “strongly disagrees” with the ISS voting recommendations. “The company takes the issues surrounding News of the World seriously and is working hard to resolve them, however ISS’s disproportionate focus on these issues is misguided and a disservice to our stockholders,” News Corp. said in a statement.

News Corp.’s 15 directors are standing for election at a shareholder meeting Oct. 21 in Los Angeles. The two News Corp. directors that received ISS’s support are Joel Klein, a News Corp. executive, and venture capitalist Jim Breyer. They are newly appointed to the board.

Amid questions about the oversight of News Corp.’s board, Rupert Murdoch in August said the media-and-entertainment company’s board is “very strong.”

News Corp news - Glass Lewis recommendations

Picked this up over the weekend, Glass Lewis (a big proxy adviser influential in the US market) has put its report on News Corp out. Not good reading for James Murdoch (or Lachlan). Next up will be ISS presumably. If they come out against JM things could get interesting. The digger can account for 40% of the votes, plus he has some investor allies, so it's very unlikely a director will be unseated. But I think we'll see some big votes against this year.

LAPFF statement on News Corp

Here it is:

Pension funds want a line drawn under hacking scandal

News Corp can only move on from the hacking scandal if it overhauls its board structure in the wake of the phone hacking scandal, according to the UK’s leading shareholder activist body.

The Local Authority Pension Fund Forum (LAPFF), whose 54 members have combined assets of £100bn, has issued a voting alert to its members this week on News Corp. Having undertaken extensive research into the phone-hacking scandal, and having engaged with News Corp directly, LAPFF has reached the view that board change is necessary. The Forum believes that lead director Rod Eddington is well placed to take this process further.

Although LAPFF would have preferred to see a fully independent process put in place, the Forum has also taken the view that Viet Dinh’s internal review in response to the hacking scandal must be given time to reach its conclusions.

Therefore LAPFF has recommended that its members vote for the election of Rod Eddington and Viet Dinh. LAPFF has also recommended a vote in favour of Andrew Knight, who has also played a positive role in engaging with the Forum.

The Forum believes that the News Corp board must take responsibility for the hacking scandal and that this would be best achieved by a change to its existing membership and structure. LAPFF believes that James Murdoch’s continued presence on the News Corp board is causing significant reputational damage to the company and is no longer in shareholders’ interest. The Forum has therefore recommended that its members oppose James Murdoch’s election.

LAPFF also wishes to see a separation of powers at the head of the company, and the appointment of a genuinely independent chair. The Forum has recommended that its members oppose the election of Rupert Murdoch, who currently holds the combined roles of chair and chief executive.

Forum chairman Ian Greenwood said: “News Corp and its shareholders desperately want to draw a line under this scandal, but that will only be possible if the board accepts the need to demonstrate real accountability. That requires a change in the structure and the make-up of the board. Whilst these are difficult issues for the company to address, we believe that to secure News Corp’s long-term future such reform is necessary.”

ENDS

News Corp news part 1

Some more hacking-related news, before I get stuck into investor developments.

1. An interesting bit in The Grauniad about the current state of play on hacking claims. Note that Mark Lewis (the guy who represented Gordon Taylor) says that News Corp may not have put aside enough to cover all the potential claims.

2. Incredible, but it does look like Sarah Payne's voicemail was indeed hacked. I don't think this will be the worst to come out either.

3. Kelvin Mackenzie's phone was hacked too. Yeah, I know, boo hoo hoo. But the interesting bit in the Speccie piece is this:

"I had always believed that the pin codes of mobiles were 0000 or 1111 and that’s why it was so easy to crack. But no. In my case it was something like 367549V27418. That surely must kill the idea that the hackers guessed or blagged the number — they must have had inside help from the phone networks. "

4. Actually BSkyB news, but this bit in the Standard was interesting. Has the AGM date been shifted to fit around JM returning to the DCMS committee? And if so, can anyone think of a precedent for this?

The FSA and corporate governance

Have to say I find this a bit surprising. It's not an isolated example either. It immediately makes me think that those in the UK investor community worried about the EC's possible tilt away from 'comply or explain' may be looking in the wrong place for a fight.

I think this is indicative of a much wider trende. I have been saying for a while that the likely outcome of the failure of market oversight of financial institutions would be a shift to a more regulatory approach to governance. The fact that the FSA is engaging with a bank to get it to strengthen its board is a good example of what we may begin to see more of. I'm also interested in whether/how the FSA communications concerns to investors.

Anyway, looks like the first bit of practical evidence for the regulatory turn and it's happening in our own backyard. People in the UK investment community love nothing better than moaning about ill-informed European civil servants mucking everything up, and latterly this has included corporate governance. I'm starting to wonder if that says more about their own politics than what is really going on here.

News Corp news

Thought I should keep track of any investor related news on News Corp and phone hacking. I'm sure most people already know about ACSI, but in case you missed it, here is their statement from last week. They have recommended voting against -

Andrew Knight
Arthur Siskind
James Murdoch
Lachlan Murdoch
David De Voe
Natalie Bancroft

I'll put up any similar statements as they come out. US public sector funds may say something for instance.