New York Times Investor Protests Share Structure

An investor in New York Times Co. withheld votes for directors at the company’s annual meeting Tuesday in protest of the Times’ dual-class share structure.

Like several other publicly held newspaper publishers, the Times is still in effect controlled by descendants of its founding family -- in this case, the Sulzbergers -- through special shares of stock.

Morgan Stanley Investment Management, which owns about 5.6% of the Times’ stock, said it withheld its votes for the four directors that are elected by the company’s Class A shares. The other nine are elected by holders of the company’s Class B stock, which is controlled by the Sulzberger family and not publicly traded.

In a statement, Morgan Stanley Investment Management said it was calling for the elimination of the two-class shareholder structure, which it says disfavors public shareholders even though they own 99% of the company.

The dual-class structure “creates special privileges as well as responsibilities,” the fund said in a statement, and the Times has “failed to fulfill these responsibilities effectively.

“While it may have at one time been designed to protect the editorial independence and the integrity of the news franchise, the dual-class voting structure now fosters a lack of accountability to all of the company’s shareholders,” Morgan Stanley Investment Management said.

A Times spokeswoman didn’t return a call for comment.

The fund said that despite a 52% tumble in the company’s share price since its peak in June 2002, the compensation for the Times’ managers had “increased considerably.”