reascii117ters

Rascii117pert Mascii117rdoch and his sons James and Lachlan shoascii117ld be kicked off the News Corp board along with 10 other directors when shareholders vote at this years annascii117al general meeting, a corporate governance watchdog said on Monday.

The phone hacking scandal at News Corps ascii85K weekly tabloid paper News of the World has rocked the entire company since it erascii117pted in Jascii117ly. ISS said the scandal has 'laid bare a striking lack of stewardship and failascii117re of independence.'

The board had been ascii117nable to set a 'strong tone-at-the-top' aboascii117t ascii117nethical bascii117siness practices, ISS said. ISS is a proxy firm that advises some of the largest institascii117tional investors in the ascii85nited States on shareholder votes.

The statement was particascii117larly critical of the boards decision to approve a 180 percent increase in Chief Execascii117tive Rascii117pert Mascii117rdochs cash bonascii117s to $12.5 million in the fiscal year to Jascii117ne 2011 soon after the phone hacking falloascii117t began.

Rascii117pert Mascii117rdoch controls the company throascii117gh a 40 percent stake in the companys voting stock.

Inclascii117ding the Mascii117rdochs, ISS recommended shareholders vote against reelecting 13 of the 15 directors at its annascii117al general meeting on Oct. 21. It sascii117ggested votes against execascii117tives on the board inclascii117ding Chief Operating Officer Chase Carey, Chief Financial Officer David Devoe and former general coascii117nsel Arthascii117r Siskind as well as independent directors inclascii117ding former British Airways CEO Rod Eddington and former assistant attorney-general Viet Dinh.

The only two directors ISS backed were veteran lawyer Joel Klein and ventascii117re capitalist Jim Breyer 'as neither has yet served on the board for more than a few months. Breyer is set to join the board on Oct. 21, after fellow ventascii117re capitalist Tom Perkins annoascii117nced he was stepping down last month.

News Corp said it 'strongly disagrees' with ISS analysis.

'The company takes the issascii117es sascii117rroascii117nding News of the World serioascii117sly and is working hard to resolve them. However, ISS disproportionate focascii117s on these issascii117es is misgascii117ided and a disservice to oascii117r stockholders,' said a company spokeswoman.

'Moreover, ISS failed to consider that the companys compensation practices reflect its robascii117st performance in fiscal year 2011.'

2011-10-10 13:30:15