BSkyB independent shareholders dealt James Murdoch a heavy blow 11/29 with over 40% failing to back his re-election as chairman, over his handling of the phone hacking scandal. Several major shareholders also voted against him because they wanted a truly independent chairman rather than an executive of News Corp., which owns 39% of BSkyB.
Investors are now concerned that the damage done to the family name could spread to BSkyB in the eyes of politicians, regulators and even consumers.
While Murdoch was supported by some shareholders in the room and given strong support by the board, the result marks his second investor slap-down in just over a month after a major protest vote at News Corp in October.
News Corp. also had to withdraw its $12 billion offer for BSkyB in July following revelations that people working for News Corp.’s weekend tabloid, the News of the World, had hacked into the voice mail of celebrities and murder victims to secure stories.
Results from Tuesday’s vote showed investors representing 75% of shares backed James but excluding the stake held by his father’s company, support stood at 56% with 31% opposed to his appointment and 13% of votes withheld.
“He has been given a bloody nose by shareholders in this vote and there may well be further developments,” Tom Powdrill, a spokesman for the shareholder advisory group PIRC, told Reuters. “He has clearly lost the support of a large number of the company’s owners.”
Legal & General, which holds 2.9% of the BSkyB stock and is the fifth-largest shareholder, told Reuters it had voted against his re-election. Standard Life, which owns less that half a percent of the stock, told the meeting it had also voted against him.