Updated from 11 a.m.
Shareholders can agitate all they want, but the newspaper industry's Gray Lady isn't budging.
New York Times
Chairman Arthur Sulzberger said Tuesday that the company will keep its board intact even as shareholders withheld support from directors in 42% of votes at Tuesday's annual meeting.
"We understand shareholder frustration as reflected in today's vote," Sulzberger said. "At the same time, many shareholders have expressed to us that we are pursuing the key actions needed to improve performance and returns to shareholders."
Sulzberger made the comments after the Times endured its latest setback in a high-profile battle with activist investors led by a
fund manager. Last year, 30% of votes were withheld in director elections at the Times.
The get-together, which took place at the New Amsterdam Theater in midtown Manhattan, comes as activist investors led by Morgan Stanley's Hassan Elmasry demand a change in the company's two-tier stock setup. The arrangement keeps control of New York Times with the Sulzberger family, which has led the Times for most of its 156-year history. Some shareholders have taken to claiming that the arrangement insulates the Times from investor discontent. They want a change.
But in prepared remarks posted ahead of Tuesday's meeting, Sulzberger defends the dual-stock structure.
"The dual class stock structure is hardly unique to The New York Times Company," Sulzberger says in the remarks. "It is not an accident that what are generally agreed to be the three best newspapers in the U.S. -- The
The Wall Street Journal
The Washington Post
-- all have this capital structure in common.
"More than 300 companies today trade using a dual class structure," he says. "Indeed, there are a number of companies going public today using this structure." He cites companies including Craig McCaw-controlled
"Only the trustees of the Ochs/Sulzberger family have the ability to change that, and we are unanimous in our commitment to retain it," he adds.
In a challenging market for print publishers, the Times has seen shareholder dissidence mount amid flagging performance and questionable investments. Sulzberger's remarks, however, suggest the company won't kowtow to investors who have maligned everything from the newspapers' strategic direction to its shelling out hundreds of millions in a new headquarters in midtown Manhattan.
"Some have criticized the decision to build our new headquarters, which will be the home for many of our employees by the end of June," the chairman notes. "We are investing a net $500 million in the new headquarters. Today it is estimated to be worth over $1 billion," he adds.
Sulzberger also tackled his joint publisher and chairman titles. Some critical investors have said he should relinquish one of the roles, but Sulzberger notes that the dual posts allow him "to balance the financial and journalistic needs of this institution, thereby reducing any internal disagreements that might jeopardize the productivity and synergy within our organization."
The Times is holding its meeting in part to elect directors to its board. Investors are expected to express their displeasure by withholding votes in an effort to force the publishing giant to make a shift.
Each Class A nominee received at least 71,728,003 out of 124,203,747 Class A shares voted, representing roughly 58% in favor of Class A nominees, said a Times spokeswoman. Votes withheld totaled 52,475,744, representing 42%.
Class B nominees totaled 766,098. All voted in favor of the nominees, the spokeswoman noted.
Shares were down 4 cents Tuesday to $23.94.