Most yearly corporate gatherings have descended into the realm of total yawners, but prospects have increased somewhat that New York Times' (NYSE: NYT ) April 24 annual meeting could deviate from that norm. Last week, Institutional Shareholder Services (ISS), a respected proxy advisory firm, issued a report recommending that shareholders withhold votes for the company's directors at the annual meeting.
The recommendation at least informally supports the efforts of Morgan Stanley (NYSE: MS ) money manager Hassan Elmasry, whose London-based fund owns 7% of Times' outstanding shares. Elmasry has attempted to push Times to do away with its dual class of shares; most of its Class B super-voting variety is in the hands of the company's Ochs-Sulzberger controlling family. The ISS report noted Times' "poor performance" and stated, "A strong message to effect change is necessary. Shareholders are left with few avenues through which to voice their opinion."
As was detailed in a Wall Street Journal lead story last month, during the past couple of years Elmasry has become a progressively more frequent thorn in the side of Times Chairman Arthur O. Sulzberger Jr., whose family's shares elect nine of the company's directors, as opposed to four for the freely trading Class A shareholders. Elmasry has pushed to have the dual class structure eliminated, or at least put to a vote of all holders of the company's stock. But with the Sulzbergers clearly in control of Times and its properties, it appears that the requested change is unlikely. In the meantime, Times' cost structure, including its expenditures for a new Manhattan headquarters building, has also induced Elmasry's ire.
Last year, nearly 30% of the company's shareholders withheld votes on Times' slate of director nominees. A continuation of the slide in the company's share price, which has fallen nearly 35% in the past two years, along with the increasing attention being given to Elmasry's efforts and the ISS recommendation, all make it appear likely that the percentage of withheld votes will increase this year.
It also appears to be a reasonable wager that, at least in the short term, little will be changed by the demonstration. Times, like the about-to-be-restructured Tribune (NYSE: TRB ) , industry leader Gannett (NYSE: GCI ) , and other newspaper publishers such as McClatchy (NYSE: MNI ) , faces an uncertain future that likely will be characterized by a continuing slide in readership and advertising revenues as progressively more people access Internet sources for their news and information.
Thus, while the efforts of Elmasry and ISS are commendable, they probably could be classified as so much sound and fury signifying nothing. Fools should be advised to remain mere observers of this and other newspaper-related dramas.
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