Fox, News shareholders revolt but Rupert Murdoch gives them short shrift
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Fox, News shareholders revolt but Rupert Murdoch gives them short shrift

When you've got something unpleasant to do, sometimes it is best to just get it over and done with.

The bottom line is Rupert Murdoch, with wife Jerry Hall, survived the latest battle to end his control of 21st Century Fox despite a massive revolt by investors at the AGM.

The bottom line is Rupert Murdoch, with wife Jerry Hall, survived the latest battle to end his control of 21st Century Fox despite a massive revolt by investors at the AGM.

Photo: AP

That is obviously the strategy Rupert Murdoch took on Wednesday in Los Angeles, where he went back-to-back shareholder wallopings at the 21st Century Fox and News Corp annual meetings.

And given his wearying 86 years on this earth, is it any wonder he chose to race through both meetings in as little as 45 minutes if Stephen Mayne's tweets are anything to go by.

Illustration: John Shakespeare

Illustration: John Shakespeare

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The bottom line is Murdoch survived the latest battle to end his control of 21st Century Fox despite a massive revolt by investors at the AGM.

Nearly 78 per cent of the voting stock controlled by Murdoch's fellow investors was voted in favour of unwinding the dual-class share structure that allows the billionaire to control 40 per cent of the votes despite owning just 12 per cent of the company.

The final vote was 313.7 million shares voted in favour of the resolution and 412.5 million against – including the 317 million voting shares held by the Murdoch family.

The vote was always going to be uncomfortably close for the Murdochs, coming just weeks after it became clear Murdoch no longer had Saudi billionaire Prince Alwaleed Bin Talal in his corner.

The recent arrest of the prince – a long-time ally of the Murdoch family – led to scrutiny of his voting stake in Fox, which made Murdoch's control impregnable.

It became clear that the prince had sold his stake, possibly years ago, but the opaque corporate rules governing Fox means the company has not had to report this significant change.

Investors like Nathan Cummings Foundation have argued that a more conventional share structure is needed to hold the Murdoch-controlled group accountable to investors.

"We have long argued that scandals like these [phone hacking and sexual harassment] are in large part a result of a capital structure that fosters a lack of accountability," the foundation said prior to the meeting.

But Rupert and sons Lachlan and James Murdoch know the larger battle is still ahead of them – convincing the market that recently-revealed talks to sell a large part of Fox and its Sky stake to Disney is not a signal that it does not have the scale to compete against a new generation of rivals like Google, Facebook and Netflix.

"Universal connectivity and access to nearly every piece of content ever made represents remarkable opportunity," Rupert told investors. "And it's still very early in this evolution."

He said "content is king all over again" and Fox was "uniquely positioned".

There was also a significant protest vote at the meeting against the re-election of independent directors including high-profile Australian businessmen like Rod Eddington and former Ford boss and BHP chairman Jac Nasser.

The largest protest vote was reserved for the sole female director of the company, which has been plagued by sex scandals. More than 27 per cent of voting shares rejected the re-election of Delphine Arnault to the board. She did not show up to the meeting.

It was not a good look for a company with its track record.

News time

News Corp's 3pm AGM made Fox's 26-minute meeting look like a drawn-out affair. It was done and dusted in just 19 minutes.

But the aftermath of the vote is one that will concern Rupert long into the new year.

The biggest protest votes were reserved for his two heirs, Lachlan and James. The latter would barely have been re-elected to the News board if it were not for the family's 79 million voting shares in his back pocket.

Rumble Kings

The brawlers at Aussie miner Kingsgate Consolidated have found themselves in another fight.

While executive chairman Ross Smyth-Kirk and crew have been focused on their legal action to redress the closure of its lucrative Thai goldmine, one of its investors, UK-listed Metal Tiger, has announced plans to clean out most of Kingsgate's board – three out of four directors and install its own team of five.

Controlling the board of a company in which you hold on a 6.7 per cent stake sounds like a great return for Metal Tiger investors.

Metal Tiger boss Michael McNeilly, who is one of the proposed board members, commented: "Metal Tiger believes that KCN is in urgent need of board renewal. The incumbent board has overseen a massive destruction of shareholder value and failed to articulate a clear strategy going forward."

Another of Metal Tiger's proposed "independent directors" will be more familiar to Aussie investors –Richard (Dick) F E Warburton AO LVO, bon vivant, climate sceptic and a veteran director whose career includes stepping down as David Jones chairman after rows with investors over years of failed expansion strategies.

"Neither Metal Tiger nor any of its nominees to the board have articulated any alternative plans for the company," Smyth-Kirk told investors in a release to the ASX.

Good man

A rather relieved Ian Ferrier was enjoying the tea and bikkies after Goodman Group's AGM on Thursday.

Antsy shareholders had two chances to dislodge their unpopular chairman and certainly made the most of their opportunities.

Nearly 22 per cent of shares were voted against his re-election to the board, and then more than 24 per cent voted against the remuneration report – which means the not-so Goodman almost received a second strike that could have triggered a spill of its entire board.

It would not have bothered boardroom veterans John Harkness and Anne Keating, who were retiring after the meeting anyway, but Ferrier wants to go out on his own terms in three years after overseeing an orderly transition to his replacement – as he explained at the meeting.

He won the grudging support of the Australian Shareholders' Association, despite its quibbles about the long tenures of its directors, and what it considers to be a non-independent board.

"Yes, I agree we are an unusual company, as we outperform the ASX, unlike other companies," Ferrier quipped.

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

Colin Kruger

Colin Kruger is a business reporter. He joined the Sydney Morning Herald in 1999 as its technology editor. Other roles have included the Herald's deputy business editor and online business editor.

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