CalSTRS Statement Regarding News Corp. Annual Meeting
The results of the News Corp. annual meeting show strong support among shareholders, especially unaffiliated shareholders, for serious governance changes at the company.
The high number of withholds – ranging from 29.4 percent to more than 34 percent – for certain directors demonstrates the strong desire of unaffiliated shareholders, such as CalSTRS, for a more independent board. In addition, the large negative vote on News Corp.’s say-on-pay proposal shows a greater need for alignment of interest between shareholders and management.
While no one expected the resolution offered from the floor — separating the Chairman and CEO position — to pass, CalSTRS’ voice helped focus attention on the situation at News Corp. As a long term investor, CalSTRS will continue to press for separation of the two positions and other governance changes at News Corp. — the kind of changes that produce enduring value for California’s educators.
Trying to effectuate governance changes at News Corp. has been a challenging task for shareholders given the dual-class voting structure and the significant influence of the Murdoch family. However, as News Corp. continues to be a publicly traded company, CalSTRS believes that the company should be held to the same governance standards as other companies in the CalSTRS portfolio. The recent scandal has underscored the need for the highest ethical and governance standards.
As of September 30, 2011, CalSTRS holds 6,150,661 shares of Class A, nonvoting stock, worth approximately $95 million. The fund also holds 35,200 shares of Class B, voting stock, worth approximately $548,000. CalSTRS holds about 0.2 percent of outstanding News Corp. stock.