Another Proxy Firm Tells Shareholders to Withhold Votes At NYT Meeting

By: Jennifer Saba Another proxy research firm is recommending that New York Times Company shareholders withhold their votes for class A directors at this year?s upcoming annual meeting.

Glass Lewis & Co. released a report that mainly calls into question the family?s control over compensation. ?We believe the class A directors should request the board vote to (i) separate the roles of chairman and publisher of The New York Times and (ii) appoint class A directors to the compensation committee,? analysts with the firm wrote.

Unlike other institutional shareholders, Glass Lewis is not agitating for the New York Times to unravel its two classes of stock, which gives the Ochs/Sulzberger family control. Class A shareholders are allowed to vote on class A directors ? there are currently five. Class B shares, controlled by the Ochs/Sulzberger family, vote on the remaining nine directors.

?We believe that a more modest proposal to the board -- such as one that does not seek to eliminate the dual class voting structure -- could be a first step toward strengthening the company?s governance practice,? wrote analysts.

That said, Glass Lewis noted that the company is a ?prime example of how the structure can result in lagging performance and insulate certain board members from shareholder accountability.?

New York Times Vice President of Communications Catherine Mathis said in response to the report: ?We are disappointed in the Glass Lewis recommendation. We have an extraordinarily talented group of directors who have experience and skills in a wide range of areas, including strategy, capital allocation, branding and media.?

Mathis also pointed out the company rotates the slate of directors elected by class A shareholders so that at least one member of the audit, nominating and governance, and compensation committees is always on the class A slate.

Analysts accuse the company?s class A directors of failing to represent shareholders by not pushing for a separate chairman/publisher role and a voice in approving compensation. Unless incumbent class A directors step down they are complicit in the company?s ?bad governance,? suggests Glass Lewis.


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