The New York Times Co. is
shaking up its director slate in an attempt to blunt a board insurgency from activist shareholders Harbinger Capital Partners and Firebrand Partners LLC. Harbinger and Firebrand have quickly amassed a 19.03% stake in the New York Times and are expected to put more pressure on the Sulzberger family. The activists have put forward four Class A board nominees who mostly have backgrounds (no surprise) in finance, while the Times is pulling in big name from media, financial services and Internet commerce for both Class A and B. The Times' annual meeting is on April 22.
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The Times omitted Harbinger's nominees from the proxy filed with the SEC last week and urged shareholders not to return the proxy card. Class A stockholders have the right to elect four of the 13 directors, and Class B shareholders elect nine. Common shareholders make up the Class A ranks while the Sulzberger family controls the Class B shares.
In Harbinger-Firebrand's corner, the nominees include Firebrand founder Scott Galloway, Firebrand adviser and former AOL executive Gregory Shove, Mayfield Fund managing director Allen Morgan and James Kohlberg, co-founder of private equity firm Kohlberg & Co. The New York Times has put up Robert Denham, a Munger Tolles & Oldson LLC managing partner and former Salomon chairman (Denham came in with Warren Buffett after Solly's Treasury scandal), as a Class A nominee and Drugstore.com chairwoman Dawn Lepore as a Class B nominee. Lapore replaces former Bertelesman AG CEO Thomas Middeloff, who has been on the board since 2003, as a Class B shareholder; he becomes a Class A nominee alongside former FCC Chair and current Carlyle Group managing director William Kennard, who has been on the board since 2001, and Verizon Communications CFO Doreen Toben, who was elected to the board in 2004.
Clearly, the Times is packing its Class A slate with the biggest names it can find in media, knowing that it can control the Class B vote. That dual-class stock -- and the Sulzberger's control of the Times through its hammerlock on Class B -- was a point of great contention with Morgan Stanley, which agitated for its elimination before selling off its position last year. So far Harbinger and Firebrand has not made the governance argument about the dual-class shares. - Maria Woehr
