BSkyB shareholders re-elect James Murdoch, 19% against

BSkyB Chairman James Murdoch (L) leaves the company's annual general meeting in London, on November 29, 2011.

Story highlights

  • About 25% of votes went against Murdoch if abstentions are counted, an analyst says
  • The opposition is a "significant blow" to James Murdoch, online activist group Avaaz says
  • James Murdoch has come under fire over his handling of a phone-hacking scandal
  • The board of directors for BSkyB gave him its backing ahead of the meeting
Shareholders for broadcaster BSkyB re-elected James Murdoch as chairman despite nearly a fifth being opposed to him continuing in the role, according to a provisional vote count Tuesday.
Murdoch, the son of media tycoon Rupert Murdoch, has been criticized for his handling of the phone-hacking scandal at News International, of which he is also chairman.
News International's parent company, News Corp., which owns 39% of BSkyB, pulled out of a takeover bid for the broadcaster this summer amid the furor over the hacking claims.
The BSkyB shareholders' vote came at the company's annual general meeting in central London.
The 18.7% vote against was the most dissent Murdoch has faced during his career on the board of BSkyB and amounted to about a third of the company's independent shareholders saying they would prefer someone completely independent at the helm.
The voting followed an hour of debate, with British lawmakers among those posing tough questions for the board about the suitability of Murdoch to head the company.
CtW Investment Group said that according to its calculations, "44.3% of independent shares were cast in dissent against James Murdoch, a damning indictment of James' credibility."
Michael Pryce-Jones, a senior governance policy analyst at the group, told CNN that the figure of 18.7% opposition to Murdoch was the most favorable reading of the vote result.
If abstentions were counted along with the votes against, as is convention in European markets, he said, "around 25% of shares cast were in rejection of his continued tenure."
The online activist group Avaaz calculated that "as many as 40% of independent shareholders either withheld or voted against James Murdoch to continue" as chairman of BSkyB.
Ricken Patel, executive director of Avaaz, said the result "represents a significant blow to James Murdoch."
The group, which wants to reform rules regarding media ownership, says the majority of BSkyB customers and a growing number of shareholders want to see the company's leadership "cleaned up."
"We hope today signals the beginning of the end of James Murdoch's reign, and a step forward for democracy, accountability and corporate governance," Patel said.
The level of opposition to Murdoch's reappointment may make it harder for the Murdoch family to exert as much influence over BSkyB.
The full details of the vote have not yet been released.
The board of directors for BSkyB declared its unanimous support to James Murdoch earlier this month, in a letter sent to investors ahead of the meeting.
The letter from the board said that while the phone-hacking allegations were a serious matter, there had "been no negative reputational effect" on BSkyB as a result. "We have seen no effect on sales, customers or suppliers over the last five months," the letter stated.
James Murdoch and all the other BSkyB directors were up for re-election Tuesday.
Murdoch has been grilled twice this year by British lawmakers investigating claims of widespread phone hacking by the now-defunct News of the World newspaper, which was owned by News International.
Public outrage over the scandal led News International to close the best-selling tabloid in July.
A public inquiry set up to investigate claims of wrongdoing by the British media has been hearing testimony from high profile figures for over a week.
James Murdoch survived a stormy News Corp. annual meeting in New York last month.
A number of shareholders lambasted Rupert Murdoch and other executives for their handling of the scandal and called for a leadership change.
With the Murdochs in control of around 40% of News Corp. voting class B shares, there was little chance of Rupert Murdoch or his sons being unseated from the board.
But in a rebuke to the family, 35% of shareholders voted against James's re-election to the board. He serves as deputy chief operating officer and head of News Corp.'s international division.