James Murdoch, son of Rupert Murdoch and Chairman and Chief Executive of News Corporation, Europe and Asia, looks on during the Digital Life Design (DLD) conference at HVB Forum on January 25, 2011 in Munich, Germany.Miguel Villagran/Getty Images
Ontario Teachers' Pension Plan is joining the battle to loosen the Murdoch family's control of News Corp.'s board, saying it will vote against five directors, including a son of Rupert Murdoch because of his ties to the phone-hacking scandal.
Two big shareholder services firms that advise shareholders on how to vote have recommended that investors vote out some of News Corp.'s directors amid concerns about the hacking issue and executive pay.
Institutional Shareholder Services recommends investors turf 13 of 15 directors, and Glass Lewis advises investors to vote against six directors. News Corp.'s annual meeting is Friday.
Teachers, which does its own analysis, concluded it should vote against James Murdoch as well as against one of Rupert Murdoch's closest advisers, Arthur Siskinds, and three more directors.
The movement to reduce the Murdoch family's lock on the board is gaining steam, but has a big hill to climb. The Murdoch family controls 40 per cent of the voting shares and has allies with big stakes.
Teachers owns about 1.8-million News Corp. class A non-voting shares, according to figures from Bloomberg, or about 0.1 per cent of the company's shares outstanding. The pension plan hasn't disclosed the size of its stake in the company's voting shares.
The issue with James Murdoch was his closeness to the phone hacking scandal that rocked News Corp. Teachers said on its web site that it plans to vote against James Murdoch's election as a director because, "We have concerns of the lack of oversight James Murdoch provided as chair of News International during the ongoing phone hacking scandal.
"Given the negative impact the scandal has had on News Corp., we consider our concerns serious enough to warrant a vote against the election of Mr. Murdoch at this time," the pension plan said.
As for Mr. Siskinds, Teachers said that his ties to Rupert Murdoch and his long tenure on the board led to the decision.
"Given Mr. Siskind's long tenure on the board, having served his directorship for 20 years, and having been the company's general counsel for 14 years, we believe that shareholders would benefit from a fresher perspective that comes with the appointment a new independent director," Teachers said.
The fund cited similar concerns with David DeVoe, News Corp.'s chief financial officer.
Teachers also plans to vote against Andrew Knight, the chairman of News Corp.'s compensation committee, because of concerns about pay at the company.
Finally, the pension fund said it couldn't support Natalie Bancroft, a member of the Bancroft family that sold Dow Jones to News Corp., because she is not experienced enough.