A shareholder in News Corporation has failed in an attempt to collapse the dual-class capital structure that allows the Murdoch family to retain control of the global media company.
News Corp said stockholders supported the Board’s recommendations on all proposals at its annual general meeting (AGM), including convincingly defeating the non-binding proposal to adopt a recapitalisation plan that would eliminate the capital structure.
Under this structure, Australian-born founder Rupert Murdoch and his family control the global, diversified media and information services company with 41% of the votes, although they have an economic ownership interest of only 14%.
Shareholder Starboard Value said dual-class share structures were not in the best interests of shareholders and did not reflect best-in-class corporate governance practice.
“There are no reasonable arguments to extend super-voting rights and de facto control to the inheritors of a founder,” Starboard Managing Member Jeffrey Smith said in a letter to News Corp shareholders on 9 September 2024.
He referred to ongoing legal battle for control of the Murdoch Family Trust, which manages the family’s ownership of News Corp, with three of Murdoch’s children fighting his plans to hand control of the trust to his son Lachlan.
But News Corp said the Starboard proposal to collapse the structure was defeated at its AGM today.
“We are pleased stockholders once again convincingly supported the company and the Board of Directors on all matters,” the company said in a statement.
News Corp’s said its current capital structure had partly enabled its success including record profitability, a 45% rise in the share price over the past year, and continuing to create significant value for all stockholders.
News Corp Class A shares (Nasdaq: NWS, NWSA) closed U.S. trading at US$29.15 (A$44.81), up 35 cents (1.2%), after trading between $28.72 and $29.21 and capitalising the company at $17.17 billion.
The Class B shares (ASX: NWS, NWSLV) had ended at A$48.56 (US$31.58), down 19 cents (0.39%) on Wednesday.
