News Corp attempts to defuse shareholder revolt

News Corp has called on its shareholders to ignore recommendations from a number of advisory groups and instead vote in favour of its board and Rupert Murdoch’s bonus.

In a filing to the Securities and Exchange Commission, the media conglomerate, which is controlled by the Murdoch family, said there has been a “disproportionate focus” on the phone-hacking scandal at the now defunct News of the World, adding that its board is “extremely strong”.

Its comments came after Institutional Shareholders Services, a US-based proxy firm that advises institutional investors, recommended that shareholders vote against the re-election of 13 of the 15 members of News Corp’s board at the upcoming annual general meeting.

The UK’s PIRC and the Australian Council of Superannuation Investors also recently advised shareholders to vote against many of the current directors.

However, News Corp called its directors “outstanding” and said they and senior management were “acting decisively to get to the bottom of what happened” at the News of the World.

“News Corporation has already taken decisive actions to hold people accountable and will take all prudent steps designed to prevent something like this from ever occurring again,” the company said.

It added that, despite the tough economic conditions, the media empire had preformed strongly, with revenues rising 2% and operating profit by 23% to $4.85 billion ($3.5 billion).

Two-thirds of New Corp’s compensation package for its chief executive, Rupert Murdoch, was based on News Corporation’s financial and operating performance, with the remaining third linked to “qualitative factors”, the company said.

“In fiscal 2011, our CEO made significant contributions to drive the overall success of the business,” the SEC filing said, adding that the board believes Murdoch should receive the full bonus of $12.5 million, in spite of the phone-hacking scandal.