News Corporation Shareholders Meeting: Much Ado Might Not Add Up to Much

News Corporation will be holding its annual meeting Tuesday on the Fox studio lot in Los Angeles and there will be several efforts by large shareholders to diminish Murdoch family control, citing the hacking scandal in England.

But efforts to use the scandal to loosen the Murdochs' grip on the company will likely fail for several reasons: First and foremost, Rupert Murdoch, chairman and chief executive of News Corporation, has delivered financial results for shareholders, with shares rising 44 percent in the last year, in part due to a $5 billion stock buyback that Mr. Murdoch once resisted.

And even if the business results weren't remarkable, there isn't a great deal that unhappy shareholders could do about it. Even though the family owns 13 percent of the equity in the company, it controls 40 percent of the voting stock. In addition, Prince Alwaleed bin Talal, the Saudi investor and a strong supporter of the Murdochs, owns seven percent of the voting stock. S o substantive changes are unlikely to take place.

But that doesn't mean that everyone will go along quietly. Both CalPERS and CalSTRS, two large California pension funds, have publicly stated that they will be voting against the re-election of Mr. Murdoch and his two sons, Lachlan and James, to the board of the media company; they were joined in that effort by the fund managers Hermes and Legal & General. And the Christian Brothers Investment Services has offered a shareholder resolution calling for Mr. Murdoch to give up his chairmanship of the board.

In spite of the vocal opposition, Mr. Murdoch predicted things will go well, writing on Twitter last week:

Busy preparing for next week's company AGM. Signs pretty peaceful, but any shareholders with complaints should take profits and sell!

- Rupert Murdoch (@rupertmurdoch) 11 Oct 12

(Mr. Murdoch also used his Twitter account to graphically name-call celebrities in Britain who were advocating laws to curb invasions of privacy, but that tweet has been removed from his timeline.)

Richard Greenfield, an analyst at BTIG who follows the company, expressed surprise that there was significant opposition to Mr. Murdoch's handling of the company.

“It's honestly ridiculous and you can quote me,” he said in an email. “There are lots of media companies to buy in the world. Rupert Murdoch and the Murdoch family control News Corp â€" if you don't like Murdoch running the company, find another media stock to invest in. It's that simple.”

But some shareholders are resolute about the need for a change.

“An independent voice is needed, and Rupert is certainly not independent,” Julie Tanner, director of socially responsible investing for New York-based Christian Brothers Investment Services Inc., told BusinessWeek. She added â €œthere's been a lack of responsiveness by the board to this scandal. The company is at risk where a scandal like this could happen again without having very clear and strong oversight.”

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Institutional Shareholder Services, which advises investors on on corporate-governance issues, also expressed support for splitting the roles of chairman and chief executive.

In the meantime, The Financial Times reported late Monday that Rebekah Brooks, the disgraced former head of News International in Britain, had received more than $11 million in pension, salary and legal fees following her resignation, an amount that was many times larger than had been previously reported. Ms. Brook has been charged with multiple counts of conspiracy connected to phone hacking and an ensuing cover-up and is set to go on trial next September. And The Independent published an account suggesting that several “embarrassing” emails between Ms. Brooks and Prime Minister D avid Cameron had been unilaterally withheld from the Leveson Inquiry, a Parliamentary Committee investigating hacking and the relationship between News Corporation and the current administration.

There will be changes to the board of News Corporation, although they may not be the ones that shareholders have been pushing for. The company has announced that two new board members will be nominated at the meeting, including the former Labor Secretary Elaine Chao and the former Colombian President Alvaro Uribe. They would replace Andrew Knight and John Thornton, who plan to step down after the meeting on Tuesday.