The Sulzbergers still run The Times
Perhaps one of the lesser known stories breaking from New York City this week involves The New York Times Company.
Long known as the private bastion of the controlling Sulzberger family, The Times opened the door slightly yesterday by allowing two dissident shareholder representatives to serve on its board. To accomodate, the board will increase from 13 to 15 seats.
Corporate governance experts have been aghast at the split shares practice, whereby one individual or group like the Sulzbergers can own a small majority of ownership but exercise near full control, probably since the day that the practice was created. While Monday’s move by The Times may seem as a concilliary gesture toward Harbinger Capital (who recently acquired a 19% stake), it pokes fun at the very nature of split shares.
The fact that a 19% shareholder should struggle to be able to nominate a board member is laughable. When you factor in the notion that these 2 new board members are expected to teach the incumbent 13 board members on how to be proper board members, the laugh track continues.
At the end of the day, nobody wins. When voting ownership bares no relation to economic ownership, it stands our current capitalistic standards on its head. Studies have often born this out. Yet, the split shares practice continues.
Here’s a congratulatory cheer to Harbinger, but we fail to see that this is little more grandstanding and an expensive p.r. effort on their part to promote their own funds.
Maybe we will be proven wrong, and The Times’ stock will discontinue being a laggard in the market. Or maybe the Sulzberger’s will continue to reign as usual for years to come. We are betting on the latter.
