April 19, 2006

Who are the owners, and what do they think?

I've been wondering why we haven't seen more things like this:

Morgan Stanley Investment Management said Tuesday it withheld votes for the Times' director nominees because it believes the company's board and management have become unaccountable to shareholders.

The firm, which says it owns more than 5% of the Times' Class A stock, called for the elimination of the dual-stock structure that leaves control of the board with minority shareholders led by the founding Sulzberger family. The Times and a number of other big media outfits have left voting control in the hands of founders, under the rationale that long-term owners look after the long-term interests of the business rather than chasing short-term profit. But Morgan Stanley said the company has failed to keep up its end of the bargain..(Thanks to Michelle Malkin).

What was the bargain? The Sulzberger family sold shares of their company to the public. Their duty, as managers, is to act in the interests of those owners. By treating the Times as their own little political toy, they are guilty of fraud..

....Morgan Stanley added that it believes that "other long-term institutional shareholders have also withheld their votes for the company's Class A director nominees." The Times couldn't immediately be reached for comment....

Couldn't be reached for comment? Maybe The Times is out of the office today...How indignant those clowns would be if some Republican "couldn't be reached for comment."

...New York Times Co. stock has dropped 52% since its peak in June 2002, Morgan Stanley says. But "despite significant underperformance, management's total compensation is substantial and has increased considerably over this period," Morgan Stanley says....

I'll bet the NYT has run articles or editorials criticizing various big businesses for giving management fat raises even as profits are falling. I'd also guess the Sulzbergers don't think of themselves as capitalists, but more like caretakers of a shrine or church...

Posted by John Weidner at April 19, 2006 10:28 AM
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