News Corp. Defends Murdoch, Board of Directors

News Corp. is fighting back against proxy advisory firms that have called for an overhaul of the company's board.

In an updated proxy statement filed Tuesday with the Securities and Exchange Commission, the company pointed out that under the current leadership, total shareholder return for the year was 49.47 percent, higher than Comcast (32.96 percent), Walt Disney (21.85 percent) and CBS (37.39 percent).

The statement addressed concerns about the News of the World phone-hacking scandal, saying the fallout could affect the finances of the company.

However, our broad, diverse group of businesses across the globe is extremely strong today, the statement continued. The drivers of our businesses are intact, our position is strong and our future is promising.

The company also addressed concerns about its compensation program, saying executives are paid primarily for performance.

The Compensation Committee believes that a significant portion of our CEO's total compensation opportunity should be based upon individual contributions and News Corp.'s financial and operating performance, the statement said.

Rupert Murdoch, 80, received $33.2 million in total compensation last year. Included in that was $8.1 million in base pay, which has raised the eyebrows of some corporate governance experts because that pay isn't tied to the company's financial success.

This week, prominent firms Glass Lewis and Institutional Shareholder Services advised News Corp. shareholders to overhaul the board of directors at the annual meeting in Los Angeles on Oct 21. Glass Lewis called for the ouster of six directors, including Murdoch's sons James and Lachlan. ISS called for the ouster of 13 of the 15 directors, including all members of the Murdoch family.

The firms cited a lack of board independence and a poor response to the phone-hacking scandal. Both firms also advised shareholders to cast a nonbinding vote in opposition to the executive pay plan.

Given that the Murdoch family controls 40 percent of the voting shares, shareholders have an uphill battle. Saudi Prince Alwaleed bin Talal, who controls seven percent of the voting shares, has publicly supported News Corp.'s board.

Shares of News Corp. rose 41 cents to $17.30 in mid-day trading.

Write to Samuel Weigley at s.weigley@ibtimes.com.