Dump Murdoch Board Lapdogs, Proxy Firms Urge. Now They Notice?
Two proxy advisory firms say the directors of Rupert Murdoch's News Corp. (NWS) are craven and self-serving and should be ousted. Is this news to anyone?
Institutional Shareholder Services and Glass Lewis are both calling on stockholders to oust several of News' board members -- especially anyone named Murdoch. (ISS wants to boot 13 of the 15; GL says 6.) Both agree that Rupert and his sons, James and Lachlan, should be voted off the board. According to ISS:
The company's phone hacking scandal, which began its public denouement in July 2011, has laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs.Apparently the "inability to set a strong tone-at-the-top about unethical business practices" was OK until it started costing money. Now that's situational ethics.
You'd think well-respected firms which advise shareholders on how to vote would have noticed so many of the directors have the same last name. You'd think it, but it seems you'd be wrong.
ISS took particular umbrage at News Corp's executive compensation plans. They found it galling that the senior Murdoch's salary nearly tripled in the last year to $12.5 million. Sure, that's appalling. But why pick on News when there are so many other deserving candidates?
When Jeffrey Kindler suddenly retired as CEO of Pfizer (PFE) last year he was being paid $24.7 million, a 66 percent increase over the year before. In 2006 Pfizer's stock was going for $26; in 2011 it was $20. Léo Apotheker got $13.2 million for halving the value of HP in 11 months. Or take GE's Jeffrey Immelt, who in the last five years has managed to get his company's stock price from $36 to $16, at the same time pulling down an average annual salary of $12 million. Over the same period News' stock has gone from $21 to $16. I'd say Rupe is a bargain at his salary.
Calling your average board compensation committee lap dogs is an insult to Pekingese and Pugs across the world. ISS and Glass Lewis are right to call out the Murdochs and their board members, but why did they just notice -- and why are they stopping there?
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