A Top Shareholder Puts Pressure on 'Underperforming' New York Times Co.
Editor & Publisher ^ | April 18, 2006 | Jennifer Saba
NEW YORK One of the largest institutional shareholders of the New York Times Co. is calling for elimination of the company's dual-class stock.
Morgan Stanley Investment Management Limited (MSIM), which holds over 5% of Class A shares in the New York Times, claims the company’s board and management have failed shareholders.
A call placed to a New York Times spokesman this afternoon was not returned.
"We believe that the New York Times is a peerless news franchise with outstanding long-term potential," said Hassan Elmasry, managing director of MSIM and lead portfolio manager of the Global Franchise Program, in a statement released this afternoon. "However, it is time for the company's board to combine the Class A and Class B common stock into a single class of common stock that would provide equal rights, voting power and representation for all shareholders. This will ensure that the company's owners are able to hold the board and management accountable for the company's performance."
Under the New York Times structure, Class A shareholders are allowed to elect four of the 13 seats on the board. The holders of Class B shares - -the Sulzberger family owns about 88% -- elect the remaining nine positions.
MSIM said it withheld its votes for the company's Class A director nominees during a shareholder meeting this morning.
"Over the past several years, the New York Times Co. has consistently underperformed its peers. Its market value has declined 52% since its peak in June 2002," according to the statement. "Despite significant underperformance, management's total compensation is substantial and has increased considerably over this period."
MSIM has held shares in the New York Times since 1996.
Private Capital Management, T. Rowe Price Associates, and FMR Corp. are other major institutional shareholders in the New York Times. |
