We have written extensively about the dual class shareholding structure that allows the Sulzberger family to keep its incompetent scion Pinch in charge of the New York Times Company's destiny. How surprising, then, to find Times economics writer Gretchen Morgenson today being rather critical of a situation where shareholders are unable to hold directors accountable for poor performance.

Regrettably, the article is behind the "Times Select" pay—for—reading barrier. But here are some fair use excerpts, with relevant verbiage in bold face.

A KNOCK—DOWN, drag—out proxy fight, featuring dissident slates of directors, mudslinging and other amusements, has been a rarity this season. But such a skirmish is going on at the Career Education Corporation, a for—profit education company that will hold its annual shareholder meeting on May 18. And the fight exemplifies why disenfranchised shareholders need much more power in director elections today. [....]

Mr. Bostic — and anyone who is ringside for this match — is learning firsthand how hard it is for shareholders to hold directors accountable when the companies they are supposed to oversee go off track. On Friday, he said that by the time his campaign is over, the cost could approach $2 million. He estimated that Career Education was spending more than double that to defend against his director slate.

Ed Lasky   5 07 06