News Corporation annual shareholder meeting – live

Rupert Murdoch is facing a revolt at News Corporation’s annual meeting over its handling of the phone hacking scandal. Follow developments live 2.06pm ET / 7.06pm BST: I’m listening in to the annual meeting on an audio stream, and Murdoch’s demeanour is fascinating. At times he is combative, brusque, putting down his veteran adversaries such as Stephen Mayne with waspish comments. At other times he stumbles and seems unsure of himself. It’s gripping. 1.55pm ET / 6.55pm BST: Stephen Mayne is back up at the mic now, complaining that Murdoch is attempting to close the debate down in an “anti-democratic and embarassing” manner. “I think we can stand our embarrassment,” Murdoch replies, pointing out that Tom Watson had been on Fox News this morning. “That’s fair and balanced,” Murdoch says, in a wry reference to the channel’s much-derided slogan. 1.53pm ET / 6.53pm BST: Tom Watson has the floor for a second time, and attempts to press Murdoch once again on allegations of computer hacking – attempting to widen the debate from phone hacking. He names Alex Marunchak, a former News of the World senior journalist linked to private investigator Jonathan Rees. Viet Dinh replies, says News Corporation is fully co-operating with the police, but that it wonn’t comment in individuals. He says police have asked the company to withhold comment to “ensure the proper administration of justice”. Dinh says there are “number of allegations, assertions, rumours and reports” which the company takes very seriously and investigates. Murdoch adds: “We will stop at nothing to get to the bottom of this and put it right.” 1.45pm ET / 6.45pm BST: Viet Dinh is speaking now, and says he has engaged directly on the issue of corporate governance with all those who have spoken today. 1.42pm ET / 6.42pm BST Murdoch is is having something of a ding-dong with Mayne. The Australian shareholders association director is trying to prolong the debate, but Murdoch wants to move to a vote. Mayne says he has not decided how to vote. “I’m not calling you a liar, but I know exactly how you’re going to vote,” Murdoch says, to laughter. 1.41pm: A representative of the pension fund Calpers tells Murdoch they and Hermes, the BT pension fund, want him to step down as chairman. 1.34pm ET / 6.34pm BST: Edward Mason of the Church of England is now speaking in support of the motion that would oust Rupert Murdoch as chairman. Murdoch interrupts Mason almost immediately, saying “your investments haven’t been that great”. 1.33pm ET / 6.33pm ET: Murdoch says the allegations by Watson are “recent rumours”. He says 90% of what the police knows comes from News Corporation, he says. “We will put this right,” he affirms, banging the desk. 1.30pm ET / 6.30pm ET: Tom Watson is now speaking. He’s listing how the scandal has spread in Britain. He’s saying that police are investigating three more private detectives, involving invasions of privacy via computer hacking. “If I know about this, with all the resources you are putting into clearing up this scandal, you must know this too.” 1.29pm ET / 6.29pm BST Stephen Mayne , director of the Australian Shareholder Association is now speaking. He’s not mincing his words, talking about “gross underperformance” of the company, a “gerrymandered” two-tier share structure. Director Viet Dinh is godfather to Lachlan Murdoch’s child, he says. “You’ve treated us like mushrooms for a long time. It’s time to get with the programme.” 1.24pm ET / 6.24pm BST: Julie Tanner, assistant director of socially responsible investing at shareholder Christian Brothers Investment Services, is putting forward the proposal now. She says it has strong support in the light of the phone hacking scandal. “This pervasive and value destroying scandal requires stronger independent leadership on the board,” she says. 1.23pm ET / 6.23pm BST: The meeting is now discussing the first proposal – that Rupert Murdoch should be ousted as chairman. 1.21pm ET / 6.21pm BST: As the meeting gets under way inside the theater, there are more than 200 protesters with the lobbying organization Common Cause outside, according to Dominic Rushe. 1.17pm ET / 6.17pm BST: He says that News Corp’s cable channels, including Fox News and the Fox broadcasting network in the US now account for more than half of the company’s adjusted income. Fox is “leaving the competition far behind”, he says. In the UK, he says BSkyB now has more than 10m subscribers. He does not mention the tangle over News Corporation’s attempt to buy 100% of BSkyB, which was scuppered by the phone hacking scandal. He says the company “will not rest on our laurels”. It says it is in “great shape to prosper”. And that’s the end of the opening statement. 1.14pm ET / 6.14pm BST: Murdoch has now moved onto listing the achievements of News Corporation elsewhere. He references his beloved new educational ventures before talking about the media divisions. The first newspaper he mentions is the Wall Street Journal, on which he lavishes praise. He mentions the iPad-only Daily. He says advertising is “surprisingly strong” in the UK. 1.10pm ET / 6.10pm BST: Murdoch is showing some contrition for the phone hacking scandal. He says: “We must admit to and confront our mistakes.” He says he is “personally determined” to right the wrongs that have been committed and that it does not happen again “anywhere in our company”. He adds the company has been under “understandable scrutiny and unfair attack”. He says that he want to put the phone hacking scandal “in context”, and that the story of News Corp “is the stuff of legend”. “We could not be taking this more seriously,” he says, referencing the closure of the News fo the World and saying the company was co-operating closely with the Metropolitan Police in London. 1.07pm ET: The meeting has begun and Rupert Murdoch is now speaking, making an opening statement. 12.53pm ET / 5.53pm BST: Tom Watson has tweeted a picture of himself on the News Corporation bus, taking him to the annual meeting venue at Fox. He seems quite pleased with his “stockholder” badge. Meanwhile the activist group Avaaz has been urging its supporters to call News Corp shareholders. It is printing telephone numbers on its website and asking people to call them up and “politely” ask them to vote down the Murdochs. Avaaz says more than 1,000 calls have already been made. It’s largely a symbolic protest: many of the institutional shareholders will not be present at the meeting and have already voted. 12.40pm ET / 5.40pm BST: Here’s more from Dominic in Los Angeles: The day started in a nondescript parking lot in Century City. Shareholders and press were ushered by uniformed guards into a screening room and ID and bags were checked (presumably to make sure there are no cream pies). We were then bussed to the Fox Studios lot and had to pass another metal detector test and bag check. I got here early and now there are a few dozen people waiting for the main event which will take place in an hour in the Zanuck Theatre. We are in a tent outside the theatre – it has fake grass on the floor and moody pink lighting. It reminds me of some outdoor weddings I’ve been to. The Murdochs face three potentially embarrassing votes. First the re-election of directors. Major shareholders have said they will vote against the re-election of most of the board, including Rupert and his two sons. Second, shareholders are preparing to vote against the company’s pay scheme. Murdoch was paid $33.3m in the last financial year including a $12.5m cash bonus, in the previous year he was paid $22.7m. Third, shareholders in the room will vote on a proposal to force Murdoch to stand down and appoint an independent chairman. The family has enough votes to win any ballot. But if giant US pension funds like Calpers keep up the pressure it will be hard for them to ignore. Tom Watson MP is hoping to be here. He’s bought shares and is aiming to ask a few questions. I’m sure Rupert’s looking forward to that! 12.11pm ET / 5.11pm BST: Dominic Rushe writes from Los Angeles: Edward Mason, secretary of the the ethical investment advisory group of the Church of England i s here. They own about $6m worth of News Corp shares. This is the first time they have attended a US annual general meeting. “We have had difficulty getting the company to listen to us,” he says. “There needs to be decisive action in terms of holding people to account. Responsibility needs to be taken at a senior level.” He said the resignations of Rebekah Brooks and Les Hinton were accepted “with great reluctance” he says. “There needs to be a fresh start.” 11.56am ET / 4.56pm BST: The annual meeting is taking place in the Daryl F Zanuck Theater at the Fox studio complex near Beverly Hills, California. Dominic Rushe , who is tweeting throughout the meeting , says he has passed security. “Have passed security check. No cream pies in my bag. Now on coach heading to NewsCorp agm” 11.38am ET / 4.38pm BST: My colleague Dominic Rushe , who is in Los Angeles for the meeting, caught up with the campaigning MP Tom Watson, who has acquired nonvoting proxy stockholder status in order to be present at the meeting today. I caught up with Tom Watson last night at the hotel. He told me that so far shareholders believe this is a scandal centered around one rogue private investigator but there are three other private investigators being looked at by the Metropolitan Police and much more to come. “I don’t think shareholders know what they are exposing themselves to,” he said. That’s what he intends to say at the meeting given the chance. He also alleges there is good evidence that Murdoch knew that the issue was wider than one rogue reporter at the time of the last annual meeting in October 2010, and is intending to bring that up. He’s been speaking to shareholders. “When I talk to people they are genuinely shocked. When you look at the scale of wrongdoing, it’s obvious it is systemic,” he said. With that, he was off to dinner in his rather natty suit and Prada glasses. 11.31am ET / 4.31pm BST: Here’s the Guardian’s story on the confirmation today that News Corporation has agreed a settlement totalling £3m with the family of Milly Dowler, the murdered British schoolgirl whose phone was hacked by the News of the World. The settlement includes a personal £1m donation from Rupert Murdoch to charities selected by the Dowler family. Our story says: The Dowlers have decided to donate Murdoch’s £1m to six charities representing causes close to Milly and those that support victims of crime. They are Shooting Star Chase, Child Victims of Crime, Suzy Lamplugh Trust, Hampton Pool Trust, Braintumouruk.org and Cancer Research. “Nothing that has been agreed will ever bring back Milly or undo the traumas of her disappearance and the horrendous murder trial earlier this year,” the Dowler family said. 11.25am ET / 4.25pm BST: Dan Sabbagh, the Guardian’s head of media and technology, is predicting a rebellion of around 20%. He writes: The key moment will be the votes for the re-election of Rupert Murdoch, and particularly for James and for his eldest son Lachlan. The Murdoch family’s 40% bloc of voting shares means that there is no doubt about who will win the vote. But the key point is the size of the rebellion – and in particular with a majority of non-Murdoch investors vote against the family members as they seek to be reappointed to the company’s board. News Corp insiders talk about a revolt of in excess of 20% of independent investors, which sets a minimum level. But it is expected that Prince Alwaleed, the Saudi billionaire, will lend the support of his 7% bloc to the ruling family, leaving the opposition to come from US, UK and Australian investors. Chief amongst the critics will be the influential Calpers, which manages pension funds on behalf of California’s public employees, an activist body that has long believed the Murdochs exercise too much control. Such is the structure of News Corp’s share capital that two-thirds of the shares carry no voting rights. The result is that the Murdochs may have 40% of the voting shares, but their true economic interest is about 12% in the vast company whose interest spans from the Fox film studio, television network and news channel, to the Australian and other newspapers in that country, through to Sky Italia and the Sun and the Times newspapers in the UK. Expect also plenty of theatre along the way. Shareholders and press are being bussed into the Fox studio lot where the meeting is taking place. Tom Watson, the Labour MP, has flown over from the UK to try and challenge the Murdochs at the meeting with the help of proxy vote on behalf of the American labour union, the AFL-CIO. There will be questions from the floor from investors, as well as Watson if he gets his way. Rupert Murdoch will make his feelings known. The talk from the company is that there will be less contrition, more defiance. He will emphasise the company’s healthy financial performance, and note that for all the problems caused by the News of the World, none of this should derail the business financially. Operating profits of $4.9bn after all dwarf the £3m paid out to the Dowler family today, or the £20m settlement fund proposed. It will be enough to get him through the day, but the question is what damage will be done to him and the prospects for James by the response of the independent shareholders, who are also part owners in the family business. 11.21am ET / 4.21pm BST: Here’s a brief reading list while we wait for the meeting to get under way. •  Here’s the New York Times preview of today’s event. It says News Corp executives will attempt to placate shareholders by highlighting the company’s strong share performance and its share buyback scheme. •  This Guardian piece by Dominic Rushe highlights the concerns of some shareholders. “The scandal shows that there is something deeply wrong with this company,” says Julie Tanner, assistant director of socially responsible investing at shareholder Christian Brothers Investment Services, who will propose a vote to remove Rupert Murdoch as chairman. “The board is failing in its leadership operation. •  The Los Angeles Times speculates that News Corp president Chase Carey, who is well regarded by shareholders, may be elevated to CEO. Rupert Murdoch would be left with a diminished role. •  The Financial Times quotes Tom Watson as saying Rupert Murdoch is approaching his “Rosebud moment” –  “in reference to the last word uttered by the title character in Citizen Kane, the Orson Welles film about a press tycoon”. 11.08am ET / 4.08pm BST: Today’s event is likely to be something of a spectacle, particularly with the presence of Watson. Shareholders will have the opportunity to question Rupert Murdoch from the floor, and there could be some lively scenes. But the reality is that the Murdoch family control 39% of the voting shares, even though they only 12% of the company, because of the two-tier share structure at News Corp. They also have the backing of Saudi billionaire Prince Alwaleed bin Talal, who controls another 7% of voting shares. So while the meeting will be bumpy, they are likely to survive the key votes. The question is how much damage a large revolt will cause. 11am ET / 4pm BST: News Corporation is holding its annual shareholder meeting in Los Angeles today. The company is facing a potential revolt from a group of shareholders over its handling of the phone-hacking scandal. Our correspondent Dominic Rushe is there and we will be covering the event live, backed up with our unrivalled team of experts. Here is a summary of events so far today. Rupert Murdoch will face angry shareholders at News Corp’s annual general meeting in Los Angeles. Close to a quarter News Corp shareholders – including some of the world’s biggest pension funds – have pledged to vote for the removal of Murdoch, his sons James and Lachlan, and other directors, whom the shareholders blame for the phone-hacking scandal that has rocked the media empire and led to the closure of the News of the World in the UK. The British Labour MP Tom Watson, who has led the parliamentary charge on phone hacking, is in Los Angeles for the meeting. He has pledged to make further revelations about practices at News Corportation, saying many shareholders are not aware of the full extent of how far the scandal extends. Murdoch has today announced that he will make a personal donation of £1m (about $1.6m) to charities chosen by the family of the murdered British schoolgirl Milly Dowler, whose phone was hacked by the News of the World. News Corporation will pay a further £2m will paid to the Dowler family in compensation. News Corporation News International News of the World Phone hacking Rupert Murdoch James Murdoch Tom Watson United States Matt Wells guardian.co.uk

Posted by on October 21, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.