Shareholder Advisory Firm ISS Recommends Withholding Vote on New York Times Co. Board of Directors
A big time shareholder advisory firm, Institutional Shareholder Services, (ISS) is campaigning to investors to withhold their votes for four directors at The New York Times Co. as a way to push for corporate governance changes. The New York Times Co. is one of a very few using an outdated “robber baron” stock scheme.
The ISS report published this week, joins forces with a longtime shareholder, a Morgan Stanley investment fund, to roll back the dual-class share structure which allows the
Sulzberger family to maintain dictatorial control of the company with only a minor share of the stock.
ISS analysts recommend separating the chairman and publisher roles, which are both currently held by Arthur Sulzberger Jr., “Pinchy,” as well as establishing key committees on the board that would be made up solely of directors elected by holders of the company’s publicly traded Class A shares.
The Class B shares, which are controlled by the Sulzberger family, have the right to elect nine of the company’s 13 directors. This is an blatantly undemocratic set up.
“Shareholders are left with few avenues through which to voice their opinion other than by withholding from Class A directors,” ISS said in its report. “While we do not advocate removal of the Class A directors, we believe that a strong message to effect change is necessary.”
The Times said in a public relations statement it was “disappointed” that the ISS had recommended a withhold vote for the four directors elected by Class A shareholders.
The Times’ annual meeting is scheduled for April 24. So watch for more positioning in the next two weeks.
Last year the Morgan Stanley fund and two other large shareholders withheld their vote for Class A directors, resulting in a 30 percent withhold rate. The votes are largely symbolic and are intended to signal shareholder dissatisfaction.
ISS also said that neither Sulzberger nor other managers are accountable to the company’s public shareholders “in any meaningful way.”
This is a democratic crisis. How long can the wealthy Sulzberger famiy (pronounced Sal-bur-jay among the inner-circle) soak the majority of their stockholders?