Shareholder Anger at $200m Payments to Hollinger Head Honchos

22 May 2003

Frustrated at the fiscal smokescreen allegedly laid down by the senior management of global newspaper publishing group Hollinger International, shareholder Tweedy Brown, an investment management firm with 17.7% of outstanding shares in the group, has appealed to the company’s independent directors for help.

Among these stalwarts are A Alfred Taubman, the former chairman of Sotheby’s Holdings who was released from federal prison last week, Henry A Kissinger [who needs no introduction to lovers of liberty, equality and fraternity] and Richard N Perle, President Bush’s erstwhile Pentagon policy advisor, known in the environs of Capitol Hill as the Prince of Darkness. On ths face of it, a trio unlikely to offer much in the way of tea and sympathy to the plaintiff.

Tweedy Browne will attempt to raise the matter at Hollinger's annual meeting in Manhattan Thursday, but is unlikely to succeed as executives’ compensation - these days an increasingly sensitive issue - is not an agenda item.

Tweedy’s demand is that the Hollinger board investigate and report upon the issue of payments exceeding $200 million over the last eight years – focusing in particular on $73.7 million (€62.95m; £44.84m) in ‘fees’ paid since 2000 to chairman/ceo Lord Conrad M Black, his newspaper columnist wife Barbara Amiel, and other senior executives.

These monies, Tweedy argues, should have gone to Hollinger rather than those individuals – who it accuses of breaching their fiduciary duty and their duty of loyalty in accepting them.

Lord Black told Bloomberg News Tuesday he would discuss the payments at the annual meeting, adding that he ‘might’ change the way they are paid. This did not satisfy Tweedy which demands the ‘fees’ be returned, its attorney arguing that the Hollinger board has a duty to investigate “misappropriation of corporate opportunity.”

Data sourced from: New York Times; additional content by WARC staff