NY Times shareholder aims to cut family control
Wed Nov 8, 2006 8:17 PM ET
By Robert MacMillan
NEW YORK, Nov 8 (Reuters) - A leading New York Times Co. <NYT.N> 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.
Eliminating the Times' dual-class voting structure would provide equal voting rights to shareholders and "foster a culture of accountability," Morgan Stanley's <MS.N> 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.
The Sulzbergers are descendants of Adolph Ochs, who bought the newspaper more than a century ago.
MSIM has raised its stake in the Times during the past several months, and now holds a 7.6-percent stake in the Times, according to a regulatory filing, making it the fourth-largest institutional shareholder.
In April, the fund withheld its vote for directors because of its dissatisfaction with the voting structure.
Wednesday's proposal, which Elmasry said should be submitted for a shareholder vote, also would require the roles of chairman and publisher of the paper to be held by more than one person. Arthur Sulzberger Jr. currently holds both titles.
It also would require that most of the members of the compensation committee be independent directors elected by public shareholders.
"We believe the current dual class voting structure fosters a lack of board and management accountability to the company's public shareholders and enables a minority of shareholders to block accountability," he wrote.
The company will evaluate Elmasry's proposal, but the family's trustees have given no indication of any desire to change the voting structure, New York Times spokeswoman Catherine Mathis said.
Elmasry was not available for comment.
The Times' stock price has fallen more than 7 percent since the beginning of the year, compared with an 11-percent gain in the S&P 500 Index <.SPX>. This is a common trend among newspapers beset by falling circulation and weak advertising.
New York Times shares rose 37 cents, or 1.53 percent, to close at $24.53 on the New York Stock Exchange.
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