Times Co. shareholders withold votes
New York Times Co. chairman Arthur Sulzberger Jr. acknowledged shareholder frustrations at the company’s annual meeting today, where investors delivered another rebuke to the company’s financial performance by withholding 42 percent of their votes for four directors.
The results are largely symbolic: The Sulzberger family controls the rest of the 13-member board.
But the large number of shares withheld reflects growing impatience with the company’s lagging stock price. Last year, 30 percent of the votes were withheld.
Sulzberger said he, his family, the board, managers, and employees were all disappointed with the stock price, down by about half from mid-2004.
He pointed to ‘‘tremendous dislocations and challenges that the digital world has created for us and for all in our industry.’’
Like other newspaper publishers, Times Co., which owns The Boston Globe and the Worcester Telegram & Gazette, has been struggling in its core newspaper business as readers and advertisers migrate to the Internet. Sulzberger promised to keep costs in control and to further build up the company’s print and online businesses.
B. Espen Eckbo, a professor of finance at Dartmouth College and the founding director of the Center for Corporate Governance there, called the withhold vote ‘‘absolutely serious’’ and said the board must consider carefully the shareholders’ concerns.
‘‘If a family-controlled firm ignores the governance demands of the day, I believe the stock price will eventually suffer,’’ Eckbo said.
Two shareholder advisory firms had recommended that investors withhold their votes for the publicly elected directors as a gesture to press for corporate governance changes, including the separation of the roles of chairman of the company and publisher of the Times. Both roles are held by Sulzberger.
One investor in particular has been vocal: Morgan Stanley Investment Management fund manager Hassan Elmasry, who says the company’s two-class share structure fosters a lack of accountability.
That structure can only be changed by a vote of the Sulzberger’s family trustees, and Sulzberger repeated today that the family has no intention of doing so.
Times Co. is one of several major newspaper companies with two classes of stock that allow a family to maintain control — and editorial integrity, Times Co. argues. Sulzberger pointed out that three of the nation’s most highly regarded newspapers are published by family-controlled companies: Times Co., Washington Post Co., and Dow Jones & Co., which publishes The Wall Street Journal.
(AP)
