By: M.L. Stein
75-year-old Nan Tucker McEvoy charges Chronicle Publishing
Co. and her stockholder relatives with age discrimination sp.
NAN TUCKER McEVOY, the principal shareholder in the Chronicle Publishing Co., is suing the company and her relatives to regain the chairmanship of the board from which she was ousted at a special stockholders’ meeting.
McEvoy, who had held the chair since 1974, charged age discrimination and a denial of her cumulative voting rights under state law in the Superior Court suit.
The ouster action by the board majority in terms of owned shares seemingly exposed long-simmering differences among owners of the family-owned corporation, whose holdings include the San Francisco Chronicle, two other newspapers, KRON-TV in San Francisco, two book publishing firms and several cable TV systems.
The complaint seeks a preliminary injunction to restore McEvoy to the chairmanship. It alleges that the majority stockholders, at an April 19 special meeting, passed a bylaw barring anyone over 73 years old from sitting on the board. McEvoy is 75.
Since she could no longer serve as a board member, McEvoy also lost the chairmanship. John B. Sias, who was named president and CEO of Chronicle Publishing in 1993, largely through McEvoy’s influence, was voted in as chairman and will occupy both positions.
The bylaw “had nothing to do with any director’s fitness to serve on the board,” the complaint states. “It was simply a device to disenfranchise a single minority stockholder.”
With her ownership of 26.3% of the shares, McEvoy is the largest stockholder, but her holdings do not give her controlling interest. Her son, Nion, owns 7%.
The age-limit bylaw was passed by a vote of 1,990,000 shares (52.78%) to 1,680,000 (44.4%) shares. McEvoy charges in the suit that certain stockholders were pressured into siding with the majority under threat of being disinherited.
Company stock is owned by members of three branches of the family of M.H. deYoung, who founded the Chronicle in 1865. Nan Tucker McEvoy, a widow and former reporter and Washington socialite, is de Young’s granddaughter.
The suit stated that the age bylaw violates California and federal law, adding that no board member asserted “that Mrs. McEvoy was incompetent or otherwise unfit for service by virtue of her age. To the contrary, age and the wisdom and experience it may confer have long been considered valuable credentials for leadership at the Chronicle . . . . “
The complaint noted that in the past the directors repeatedly had elected Consuelo Tobin Martin to the board until she voluntarily stepped down at the age of 81.
“It is perfectly clear that the sole purpose of the bylaw was to prevent Mrs. McEvoy ? and her alone ? from voting her shares to keep herself on the board,” the suit went on. The suit avers that McEvoy is in good health and occupies an office in the Chronicle building.
McEvoy is represented by the law firms of Bronson, Bronson & McKinnon of San Francisco and Cravath, Swaine & Moore of New York City.
A Chronicle Co. source told E&P that the board members most responsible for removing McEvoy as chair were Richard Thieriot, former editor and publisher of the Chronicle, and Frances “Rannie” Martin III, ex-head of the company’s television operations. Both were forced out two years ago in sweeping management changes led by McEvoy.
However, there are other tensions among shareholders. A faction wants to sell the Chronicle, a move firmly opposed by McEvoy, who has said the sale would be “over my dead body.” There reportedly also is some discontent over the Chronicle’s increasingly liberal tone, which McEvoy has encouraged.
“I’m the Democrat in the family,” she once said. “I’m more politically liberal than the Chronicle has been for a number of years.”
Also, a company source said, “Some stockholders feel she is too rich and gets too much publicity while they remain poor. They want to take their money and run.”
In a statement made in connection with the suit, McEvoy said: “This fight is about the future direction of the Chronicle Publishing Co. My interests are the interests of the community, our employees and my fellow shareholders . . . . There is nothing more distressing than to have to air in public the illegal attempt by certain family members to eliminate my perspective from the Chronicle Co. board. I believe this action is designed to destabilize the company . . . . “
McEvoy contended she was instrumental in bringing professional management to the company after many years of family control and in implementing a business plan that has improved cash flow and reduced debt.
“Chronicle Publishing is worth more today than it was yesterday, and will be worth more tomorrow than it is today,” she said.
Thieriot could not be reached for comment.
Martin, who is McEvoy’s cousin, refused to be interviewed but issued a brief statement terming the board dispute a “family matter.”
“I think it’s unfortunate that she [McEvoy] has chosen to make a public issue of it, in part because I think it reflects poorly on her in a way that I would have preferred to avoid,” he continued.
Martin, currently chairman and CEO of U.S. Media Holdings Inc., insisted the shareholders “are not motivated by anything but a desire to do what is best for the company.”
He argued that the age bylaw is a prudent and legal provision widely used by many major corporations.
In an interview with E&P, McEvoy said it was her presumption that Thieriot and Martin engineered her removal from the board.
Referring to their being stripped of management positions, she commented: “People don’t forget something like that easily.”
In response to Martin’s complaint about going public over the matter, McEvoy said: “I suppose they would have been very pleased if I hadn’t done anything and let them throw me out on a trumped-up cause. Basically, it’s because of their action ? which was wrong ? that I went to court. I’m very sad it happened ? that we had to make this quarrel public.”
McEvoy acknowledged past differences between her and certain board members, but asserted that her ouster came as a complete surprise.
Board members received advice from counsel before adopting it, he added.
A Chronicle story quoted “observers” as saying the family feud could increase the possibility of the sale of either the Chronicle or KRON.
But Bill German, longtime executive editor of the Chronicle, told E&P he does not believe the rift in the board presages a sell-off.
“I’m not happy that this happened,” German commented.
“I have known Nan for a number of years and have great respect for her,” he added
Another Chronicle source, who wished to remain anonymous, also dismissed reports the paper will be sold.
“I don’t see how it can happen,” he reasoned.
“Mrs. McEvoy is the biggest shareholder, and there are others with sizable holdings who don’t want to sell.”
However, there is a possibility the company’s cable investments may be on the block, he said.
?(There is nothing more distressing than to have to air in public the illegal attempt by certain family members to eliminate my perspective from the Chronicle Co. board. I believe this action is designed to destabilize the company…”) [Caption]
?(Nan Tucker McEnvoy, ousted chairman of Chronicle Publishing Co.) [Photo]
?(John B. Sias, who was named president and CEO of Chronicle Publishing in 1993 largerly through McEvoy’s influence, was voted in as chairman and will occupy all three positions) [Caption & Photo]