Murdoch, Sons Draw Substantial Negative Vote

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Wolff wrote that "unlike Lachlan, James is like his father, News Corp. people believe. Or at least he tries to be."

The company has been under investigation regarding phone-hacking scandal allegations against its former tabloid newspaper in London, News of the World, which closed on July 7 in the media spotlight.

Before the meeting, the company announced it would pay the family of Milly Dowler, a murdered British teen whose phone was hacked by News of the World, $3.2 million and donate $1.6 million to charities of the family's choosing.

A statement from the Dowler family on Friday stated, "Nothing that has been agreed will ever bring back Milly or undo the traumas of her disappearance and the horrendous murder trial earlier this year. The only way that a fitting tribute could be agreed was to ensure that a very substantial donation to charity was made in Milly's memory. We hope that projects will be undertaken so that some good can come from this," the Financial Times reported.

Though the News of the World closure was at financial cost to the company, Murdoch said it was the "right thing to do" which is "why we have devoted so many resources to get to the heart of this matter." He said the company is fully cooperating with the Metropolitan police in London and other authorities.

Proxy advisory firm Institutional Shareholder Services (ISS), whose clients are investors including pension and mutual funds, recommended that shareholders vote against the re-election of 13 News Corp. board members.

ISS said in its report: "The company's phone hacking scandal, which began its public denouement in July 2011, has laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs."

ISS also made negative recommendations against certain members of the News Corp. board in 2005, 2008 and 2009.

In response, News Corp. issued a note to stockholders on Oct. 11 defending the 15 directors, re-elected annually, and the other proposals in the company's proxy statement for 2011.

News Corp. said ISS' "disproportionate focus on the News of the World matter is misguided."

"Our litigation exposure to the News of the World matter could affect News Corporation's results of operations and financial condition, and we are taking this matter very seriously," News Corp. stated to shareholders. "However, our broad, diverse group of businesses across the globe is extremely strong today."

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