The shareholder meeting for the New York Times (NYSE: NYT) could be exciting as a group of investors led by Morgan Stanley (NYSE:MS)push for the company to abandon its dual-class stock structure. Institutional Shareholders Services is recommending that investors withhold support from the company board of directors, although such a vote will have little in the way of practical consequences. The Ochs-Sulzberger family controls most of the company's voting stock.
A change in the company's voting structure would allow shareholders to have some say in the company's management. Washington Post Company's(NYSE:WPS)Chairman Donald Graham believes that a change in the share structure at the New York Times would make the company a takeover target, and that a new owner might not spend as much on newsroom budget.
He's probably right. But here's the problem: As a public company, the New York Times has a responsibility to generate value for its shareholders. If the Ochs-Sulzberger family wants to run the company in a manner that does not benefit minority shareholders, they should do the right thing -- take the company private.
But as long as the New York Times is a public company, the board has a fiduciary responsibility to take steps to boost shareholder value. The 5-year chart demonstrates their failure on that front:
