Dollars and Jens
Sunday, November 12, 2006
Corporate Governance
NEW YORK, Nov 8 (Reuters) - A leading New York Times Co. shareholder submitted a proposal to the company on Wednesday that would cut the Sulzberger family's longstanding control of the company by changing its voting structure.On the one hand, I'm sympathetic to the point that Morgan Stanley is making. But on the gripping hand, it was like that when they got there. If you don't trust the Sulzberger trust to manage the company for you, you shouldn't buy the stock. The fact that shareholders have effectively no control over management probably gave Morgan Stanley a discount on the stock. They certainly should have figured a discount into their valuation.
Eliminating the Times' dual-class voting structure would provide equal voting rights to shareholders and "foster a culture of accountability," Morgan Stanley's Hassan Elmasry wrote in a letter to the Times' corporate governance officer, a copy of which was sent to Reuters.
Currently, class A shareholders elect four of the company's 13 directors. The Sulzbergers hold class B shares, which represent less than 1 percent of the company's equity interests, but elect nine directors, Elmasry, the managing director of Morgan Stanley Investment Management (MSIM), wrote in a proposal accompanying his letter.
I don't entirely blame them from whining, mind you. It's at least a way to embarass management, which is all the power they have. But I don't see it doing much good, and I don't feel terribly bad about that.
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