Murdoch suffers BSkyB revolt, but hangs on

Tue Nov 29, 2011 1:11pm EST
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By Kate Holton and Alessandra Prentice

LONDON (Reuters) - BSkyB independent shareholders dealt James Murdoch a heavy blow on Tuesday with over 40 percent failing to back his re-election as chairman, venting their anger at his handling of a phone hacking scandal.

Several major shareholders told Reuters ahead of the key annual meeting that they would vote against the 38-year-old because they also want a truly independent chairman rather than an executive of Rupert Murdoch's News Corp, which owns 39 percent of BSkyB.

While James Murdoch was supported by some shareholders in the room and given strong support by the board, the result marks his second investor drubbing in just over a month after he endured a huge protest vote at News Corp in October.

News Corp had to withdraw its $12 billion offer for BSkyB in July following revelations that people working for a News Corp weekend tabloid, the News of the World, had hacked into the phones of celebrities and murder victims to secure stories.

Results from Tuesday's vote showed investors representing 75 percent of shares backed James Murdoch but excluding the stake held by his father's company, support stood at 56 percent with 31 percent opposed to his appointment and 13 percent 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, said. "He has clearly lost the support of a large number of the company's owners."

Legal & General, which holds 2.9 percent of the BSkyB stock and is the fifth-largest shareholder, told Reuters it had voted against the re-election of James Murdoch. Standard Life, which owns less that half a percent of the stock, told the meeting it had also voted against him.

James Murdoch, who was well regarded as CEO of BSkyB between 2003 and 2007, had been expected to win re-election to that role, thanks to the support of family and allies.   Continued...