News Corp. Braces for Backlash at Shareholder Meeting

A growing list of investors is opposing Rupert Murdoch and his family's control over News Corp. ahead of the company's annual meeting in Los Angeles on Tuesday.

Now the California State Teachers Retirement System (CalSTRS), with $153 million dollars in management, is voting against the re-election of every single News Corp. director.

This comes as an even bigger pension fund — the California Public Employees Retirement System (CalPERS), which has $273 billion under management, is opposing the re-election of Rupert Murdoch and his sons James and Lachlan from the board, according to The Telegraph. (CalPERS has not yet responded to request for comment.)

And though proxy advisory service ISS has come around on News Corp., Glass Lewis is also advocating for management reform — recommending the removal of Lachland and James Murdoch as well as Anne Bancroft, because of their affiliation with the family.

"It's possible that the continuing focus, continuing lawsuits, will encourage the board vote in the face of a large shareholder vote against certain directors to make further changes to add more independent members, " said Robert McCormick, Glass Lewis' chief policy officer.

(Read More: Rupert Murdoch: Don't Lead Your Family Business Like Him.)

These pension funds join a long list of investors concerned about the Murdoch family's lack of independent perspective on the board. In July, a consortium of 18 companies, representing $1.6 trillion in assets under management at 13.45 million Class A shares, sent Murdoch a letter asking the board to appoint an independent chair.

The companies, including Aviva Investors, Calvert Investments, and Connecticut State Pension Fund, wrote that in the wake of the phone hacking scandal , "We believe the board is in need of independent leadership."

The letter added that the company's intention to split off its media and publishing arms "presents a unique opportunity for serious governance reform."

Opposition to the Murdochs' control of the board has been growing since the phone hacking scandal erupted last summer. (Read More: News Corp. Cuts Murdoch's Bonus, Citing Scandal.)

There was opposition to Murdoch at last year's meeting — replete with protests from Occupy Los Angeles, an off-shoot of Occupy Wall Street. But this is the first shareholder meeting to include resolutions against Murdoch on the proxy voting form, allowing investors to vote without traveling to Los Angeles.

But despite all this opposition, the Murdoch family is unlikely to be ousted. Any changes to the board will come as a response to pressure, and not actual votes, because though the family owns just about 12 percent of shares, they control 39 percent of Class B voting shares. And Saudi Price Alwaleed Bin Talal holds about 7 percent of those voting shares, and pledged his support to the family last year. Together that's 46 percent.

News Corp. has taken steps to diversify its board; it's nominated former Labor Secretary Elaine Chao and former Columbian President Alvaro Uribe to join as directors.

But Glass-Lewis' McCormick is optimistic that the board will consider more change: "I think there's an opportunity to send a very strong signal yet again to the Murdoch family that the board has not improved its independence sufficiently enough. When you have at least 5 directors being rejected by more than 50 percent of the shareholders who are not affiliated with either the Murdoch family or Prince Alwaleed."

After last year's meeting, two directors did step down after receiving significant opposition. We'll be reporting on what happens in the meeting Tuesday.

—By CNBC's Julia Boorstin

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