Despite facing long odds, Morgan Stanley money manager Hassan Elmasry has stepped up his campaign to get New York Times Co. to dismantle its two-tier stock structure.
Mr. Elmasry, whose London fund owns a 7.6% stake in New York Times, submitted resolutions yesterday to be voted on at next year’s annual meeting, one of which asks the publisher to switch to a one-share, one-vote system.
New York Times is controlled through trust ownership by the descendants of Adolph S. Ochs, who purchased the paper in 1896, through their ownership of 4.4% of the publisher’s nonvoting Class A shares and 88% of the Class B voting shares.
In his proposal, Mr. Elmasry argues that the Times system is unfair because the owners of the nonvoting shares, which he says represent more than 99% of the company’s economic interest, “elect only four of the thirteen directors” while the owners of the voting shares, which he says represent less than 1% of the company’s equity interests, elect nine directors. “The dual class voting structure fosters a lack of board and management accountability,” he wrote in his shareholder proposal.
New York Times spokeswoman Catherine Mathis said the dual-class structure can’t be changed without the approval of six of the eight family members in the trust. “And they have given no indication of any desire to change it,” she added.
Even if Mr. Elmasry’s proposal won a shareholder vote, it would be only a symbolic victory. He thinks such a show of support would give the board ammunition in a negotiation with the family, according to a person familiar with his thinking.
It’s not hard to understand Elmasry’s thinking. Why should such a large shareholder have such a disproportionately small say in how the company is run — particularly when the man who is running it, Arthur “My Apologies” Sulzberger Jr., is running it into the ground? (h/t Romenesko)