Protest vote on Murdoch’s role

A STRONG protest vote against Rupert Murdoch maintaining the chairman and chief executive posts at News Corporation has sent a clear message, says an Australian institutional investor agitating for change.

Some investors, including Australian and overseas superannuation funds, have for the second year in a row put forward a resolution at News Corp’s annual general meeting calling for an end to Mr Murdoch holding both posts.

While the resolution again failed to pass, the chief executive of the Australian Council of Superannu (ACSI), Ann Byrne, said the 30 per cent of votes cast supporting the motion sent a clear message to the News Corp board.

Though Mr Murdoch owns a 12 per cent economic interest in News Corp, the media mogul holds 40 per cent of all votes under the company’s two-class share structure. The resolution would have passed if Mr Murdoch’s 317.3 million votes were excluded from the count.

Ms Byrne noted News Corp had made some changes after ACSI and others last year called for improved corporate governance at the global media giant, and the matter would again be raised with News Corp’s independent directors.

‘‘There will be continued work behind the scenes,’’ she said.

‘‘They have listened from this year to last year, so therefore I would expect them to take note of what shareholders have said again this year.’’

An analyst at media consultancy Fusion Strategy, Steve Allen, said those looking to buy News Corp shares needed to understand they were betting on Mr Murdoch.

‘‘Institutional shareholders probably see that if they agitate and if they can change things, they will unlock some extra value,’’ Mr Allen said.

‘‘But obviously the majority of shareholders think that the value of News Corp is in Rupert Murdoch, and they go along with the fact there are only friends and family on the board and there are relatedparty transactions.

‘‘If you want to go on the ride with them, that’s what you go on the ride for.’’

News Corp stock closed the Australian trading day up 27c at $24.54, while its non-voting scrip gained 29c to $24.11.