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Home Front: Culture Wars
New York Times Shareholders Urged To Withhold Votes
2007-04-06
The public shareholders are getting restless.
A major shareholder advisory firm, Institutional Shareholder Services, is urging investors to withhold their votes for four directors at The New York Times Co. as a way to push for corporate governance changes.

"Shareholders are left with few avenues through which to voice their opinion other than by withholding from Class A directors," the ISS said in its report. "While we do not advocate removal of the Class A directors, we believe that a strong message to effect change is necessary."

The Times declined to include a shareholder proposal from the Morgan Stanley fund that would have called for putting the company's dual-class share structure to a vote. That structure can only be changed by the Sulzberger family, and they have said they don't intend to do so.
Posted by:Glenmore

#4  Understood - all of the above. However, I'm a big believer in market solutions in these cases. Some institutional holders may want to avail themselves of remedies through the SEC or legal systems, but I'm just saying that selling the stock is the best step for most. I wouldn't put/keep my or other people's money in such an enterprise. If you want to move in, buy up a stake, and try to change things, a la some mutual or hedge funds, OK - but I think selling off the stock is an immediate and easy option that puts great pressure on the preferred holders (Pinch) and requires no regulatory rigamarole.
Posted by: Verlaine   2007-04-06 13:59  

#3  Verlaine,

It's a rather old dirty practice, that people with a controlling interest will do exactly what the management at NYT is doing to force people to sell their stocks cheap. There are preferred stock which has controlling interest and common stock which is along for the ride. To protect investors and keep integrity in the system is was the responsibility of the SEC to make sure that in open, traded stocks, the management not engage in such practices, that the management has a responsibility to the shareholders to make the corporation work. The SEC has the power to suspend trading in a stock because of malfeasance. While it would hurt the stockholders caught holding, those who were manipulating the corporation would also find their holdings frozen. Those holdings used for loans and other financial leverages by the troublemakers would be basically be worth zero until the mess was sorted out. Banks get nervous about those things. That's why its a tool in war and diplomacy. Hard paying taxes on your property in the Hamptons or Manhattan when the bank is closed.
Posted by: Procopius2k   2007-04-06 11:22  

#2  Seems to me that public shareholders also have another option, one of the most venerated and time-tested ones: SELL.
Posted by: Verlaine   2007-04-06 11:03  

#1  "Shareholders are left with few avenues through which to voice their opinion other than by withholding from Class A directors,"

What happened to class actions suits because of clear and irrational behavior by management against their inherit fiduciary responsibilities in a corporation subject to security and exchange laws? Toss in the SEC in the suit for its unwillingness to act [to take a page from the SCOTUS ruling the other day in the EPA suit].
Posted by: Procopius2k   2007-04-06 08:54  

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