New York Times and Its Shareholders

After reading column after column by New York Times writers Morgenson and Nocera on excessive compensation and wondering why the same columnists are silent on new shareholder voting enhancement proposals we learn that The New York Times Company itself has a dual class stock structure.  At the annual meeting yesterday, a single dissenting shareholder, Morgan Stanley Investment Management, withheld its votes for directors.  Morgan holds more than 5% of the Class A shares;  the Class B shares, held by the Sulzberger family have significantly more voting power per share.  Class A shareholders elect 4 of 13 directors;  Class B shareholders elect 9 of the 13 members.The result was that around 30% of the Class A shareholders present and voting, withheld their votes.  Morgan wants to consolidate the two classes of shares to force the board to improve management and share performance.  Morgan noted that the paper's profits were steadily falling at a rate that was worse that the industry average (which is also suffering).  Since January 2004 the company's shares have fallen 47 percent (industry - negative 35 percent) and yet management total compensation and increased substantially over the same period.  Will the NYT columnists now rail against NYT management compensation??  Don't hold your breath.  The dual class stock structure of the NYT and the WSJ protects both papers from takeovers and from shareholder pressure.  Both papers are run by wealthy families who, it seems, will sacrifice company profits to kept a particular journalistic philosophy intact.  Experience has shown us that in a fast changing industry, overwhelmed by technological change, this strategy inevitability proves to be a disaster (good companies ride old successes and existing trade names until the horse dies).