News Corp.'s massive stake in the company made the vote perfunctory, but almost a third of independent shareholders opposed Murdoch's re-election
News Corp. Deputy COO James Murdoch survived a shareholder vote on Tuesday to remain chairman of U.K. broadcaster BSkyB despite nearly a third of independent shareholders voting against his re-election.
Much like at October’s News Corp. shareholder meeting, the outcome was preordained – News Corp. owns 39.1 percent of BSkyB’s shares.
However, the vote was seen a test of Murdoch’s standing in the wake of News Corp.’s phone hacking scandal — a large percentage of "no" votes would have been another blow to the son of News Corp. Chairman and CEO Rupert Murdoch.
Back in October, 35 percent of the News Corp. board voted against Murdoch's re-election. This time around, the figures indicate that 18.76 perce t of shareholders voted against him, which equates to about a third of the independents.
News Corp., already the owner of the most BSkyB shares, had to give up its efforts to purchase the remaining shares after the eruption of the phone-hacking scandal at its News of the World tabloid.
Some felt James Murdoch should resign his post as well because a portion of the malfeasance occurred under his watch. He has twice testified before Parliament about hacking and some shareholders attest that the damage to Murdoch's reputation could taint that of BSkyB.
Also Read: BSkyB Board Backs James Murdoch as Chairman
However, in advance of the vote, deputy chairman Nick Ferguson penned a letter to shareholders on behalf of the board indicating its support of Murdoch. Ferguson wrote that Murdoch had done a “first class job.”
Those shareholders that oppose Murdoch as chairman question how he can be independent when News Corp. owns so much of the company and still wants to buy more. They also question his commitment to the company.
“He’s an immensely busy person,” James Bevan, chief investment officer of CCLA Investment Management LTD, a BSkyB shareholder, told Bloomberg. “News Corp. is an international company of enormous scale and complexity. To say BSkyB needs a full-time chairman is absolutely correct. I really don’t believe Mr. Murdoch has time for both.”
For now, he will have to.