New York - James Murdoch, the presumed heir to the News Corp media empire, received a sharp rebuke from shareholders when nearly 35% of the company's investors voted against his reelection to the board.
But even that number masked the enormity of the dissent against the youngest son of News Corp chairperson and CEO Rupert Murdoch, based on the voting results disclosed in a regulatory filing.
Of James Murdoch's total approval vote of 65%, 40% came from shares held by his family and another 7% from News Corp's largest individual shareholder, Prince Al-Waleed bin Talal.
Those votes are the only reason James Murdoch was reelected - without them, nearly two-thirds of the votes went against him, enough to cast doubt over whether he has the credibility and support to eventually succeed his father.
"Clearly, shareholders are upset by the hacking scandal and the continued disproportionate control of the company by the Murdochs," said Gabelli & Co analyst Brett Harriss.
Bob McCormick, chief policy officer at proxy advisory firm Glass Lewis, which had recommended News Corp shareholders vote against reelecting Murdoch and his children, said: "As you approach one-third votes against a director it's a very significant rejection of that director. I think they should definitely rethink their position but given their history I doubt it."
Even at the 35% level, the vote against James Murdoch rivals that of the 43% no confidence vote Disney shareholders gave to former CEO Michael Eisner in 2004.
The figures from this year's meeting underscore the massive damage the phone hacking scandal has inflicted on James Murdoch's reputation.
At last year's annual meeting, where Rupert Murdoch memorably stood up to reassure investors that hacking was the result of a lone, rogue reporter, only 20.5% of independent B shares were voted against James Murdoch. The percentage of votes against James Murdoch this year nearly doubled -- even when all the family votes are considered.
How Rupert and Lachlan faredInvestors gave Rupert Murdoch more support than his children, reelecting the company patriarch with nearly 85% approval, inclusive of his family's votes. Absent those votes, 29% of News Corp shareholders voted against or abstained from voting for Rupert.
News Corp shareholders also voted overwhelmingly against a proposal to separate the chairperson and CEO roles, apparently satisfied to have Murdoch hold both titles. More than 99% of shareholders voted against that proposal.
Murdoch's eldest son Lachlan did not fare much better than his brother, garnering votes against his reelection of just under 34%.
Excluding the family votes, this equates to an against vote of 64% for Lachlan. Unlike his brother, Lachlan does not currently hold an operating role at News Corp.
"Frankly, it's surprising 92 million voted against Rupert versus over 200 million for his son (James). Even people against his son respect the job Rupert has done as CEO and chairman of the company," said Evercore Partners analysts Alan Gould. "For James it's a little more critical."
Gould added that James Murdoch's chances of becoming CEO are now "a function of what new events come out of London" and "how involved it appears James was in the phone hacking scandal".
Having already appeared once before a special committee of parliament, James Murdoch is scheduled to be reexamined on November 10 after several former executives disputed key facts in his earlier testimony.
Murdoch's No 2, Chase Carey, got a relatively positive vote from independent shareholders with 90% voting for his reelection.
Investors have generally viewed Carey positively, noting his track record for creating value while serving as CEO of DirecTV and so far at News Corp. He has also taken a hard line on retransmission fees - or fees paid by cable operators for broadcast networks like Fox - which will have a positive impact on News Corp's bottom line going forward.
"It sends a positive message for Chase Carey, it confirms he's an important part of the company and has already changed the management's perspective," said McCormick of the vote.
Indeed, when Rupert Murdoch declared during the company's third-quarter earnings call that Carey rather than his son James would likely succeed him in the near term, analysts and investors cheered the news.
Votes were also low for the only woman on the board, Natalie Bancroft, who became a director after News Corp bought Dow Jones in 2007. She had 63% of the independent B votes against.
Among the notable directors to receive strong votes for reelection were Viet Dinh (85%) and recent board additions Joel Klein (96%) and James Breyer (98%).
A phon- hacking scandal at New Corp's tabloid News of the World in London has enveloped the company for the past year, resulting in the paper's closure, the arrests of more than a dozen former executives and employees and the abandonment of News Corp's $12bn deal to acquire the outstanding shares of BSkyB it doesn't already own.
The anger from the phone-hacking scandal was evident at News Corp's annual shareholder meeting last Friday. In addition to the roughly 150 investors who were crowded into the Zanuck Theater on the Fox Studios lot in Hollywood, about 100 people protested outside with signs reading "Murdoch isn't above the law" and "Big Media, Big Money, Get Out".
British member of parliament Tom Watson, Australian pension fund representative Stephen Mayne and Julie Tanner of the Christian Brothers Investment Service were among those who sparred with Murdoch. His sons did not speak at the meeting.
Murdoch proved a master of crisis management during News Corp's annual shareholder meeting, striking both contentious and comedic tones to disarm legions of angry investors who showed up looking to draw corporate blood.