Fairfax coverage of the rolling of Rupert in 2003
January 14, 2008
This Wendy Frew story appeared in The Age and The SMH the day after the last regular News Corp AGM in Australia on October 15, 2003.
Rupert Murdoch bowed to Australian institutional investors in an extraordinary backdown yesterday, withdrawing a rich options package for News Corp executive directors, including his sons James and Lachlan.
The company had planned to ask shareholders at yesterday's annual meeting in Adelaide to approve an issue of free options, with no performance hurdles attached, to six of the company's executive directors. Mr Murdoch said the resolution would have been passed if he had exercised his own vote but decided not to.
Mr Murdoch's family company, Cruden Investments, holds 29.85 per cent of News ordinary stock.
"While the majority of the company's voting shares have been submitted in favour of the first special business resolution dealing with the grant of options to executive directors, an issue has arisen and I have decided it is appropriate on this occasion on this occasion alone that [the] resolution will be withdrawn," Mr Murdoch said.
"The issue arises because I am theoretically eligible to participate in the option plan though I do not participate in annual grants of options," he said.
Later, he told reporters he was surprised by the opposition to the options issue, particularly as institutional investors hadn't spoken to the company before casting their proxy votes.
"They didn't tell us their feeling because we are very, very conscious of shareholder mood and we have worked, God knows, how many hours on corporate governance regulations and provisions this year," Mr Murdoch said. "There has been some crazy misunderstanding here."
The Australian Shareholders Association which had planned to vote against the resolution said it was "pleasantly surprised" by News Corp's decision.
"I objected to the lack of non-performance hurdles for very, very significant options and very significant financial gains for the participants," said the ASA's South Australian company monitors chairman, Laszlo Somogyi.
"I still commend Mr Murdoch on this decision because 90 per cent of the shareholders live outside Australia," he said.
Australian institutions are thought to have followed advice from Corporate Governance International, which advised against voting for the resolution.
Challenged by shareholder Stephen Mayne about the extent of independence on the News Corp board, Mr Murdoch said News would appoint at least two new independent directors soon.
However, he rejected Mr Mayne's suggestions that his 30 per cent voting stake in the company was not a true reflection of his smaller economic stake. More than half of News's equity consists of non-voting preference shares.
Mr Murdoch also rejected accusations that the elevation of his youngest sons James to the top job at UK satellite pay TV outfit BSkyB would amount to nepotism.
"We will nominate somebody [for the BSkyB job] and that will be accepted or rejected by the board," Mr Murdoch said.
News Corp owns 35 per cent of BSkyB. Some of BSkyB's institutional investors have expressed concern that handing the job to James will threaten the pay TV group's independence.
In his speech to shareholders, Mr Murdoch said News Corp was "proud of its record of scrupulous corporate governance".
However, a recent survey by RepuTex of Australia's top companies put News Corp near the bottom of the list in ranking adherence to corporate governance principles.
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