Free War at the Wall Street Journal by Sarah Ellison Page A

sat in the audience in the World Financial Center tower adjacent to Dow Jones headquarters, where the meeting was held in the American Express Company's auditorium. He watched as Roy Hammer, who had reached the mandatory retirement age of seventy, relinquished his position on Dow Jones's board to the younger Michael B. Elefante, a transition Mike welcomed. He watched as the shareholders approved a measure that would allow his family to sell more Dow Jones stock—thereby raising cash—and still maintain control of the company. Under the previous bylaws, once the family's holdings of super-voting Class B shares fell under 12 million, all of their shares would convert to the regular common stock, and the family would lose control of the company. Under the new measure, officially proposed by the company but actually proposed months earlier by Hammer, in need of a measure to keep the Bancrofts happy, the level down to which the Bancrofts could sell their shares fell to 7.5 million. Such a move flew in the face of modern shareholder democracy, but for the moment, everyone was willing to overlook it in order to keep the Bancroft family happy and in charge.
    After the meeting, Mike walked through the breezeway with Hockaday and Newman to Dow Jones's headquarters, and the men made their way up to the company's executive eleventh floor, where the beige carpets were plusher than the soiled blue ones in the newsroom a floor below. In one of the small conference rooms, Mike sat down nervously with Hockaday and Newman. He was looking forward to his audience and felt the weight of his family responsibility. "Maybe we're finally making progress," he thought.
    Hockaday and Newman were friendly but standoffish. They didn't reveal anything to Mike. Hockaday led the conversation; through his many years on Dow Jones's board he had become the de facto lead director. "It was our impression that the Bancroft family was happy with the way things have been going at Dow Jones," Hockaday said. "That's not the case," Mike Hill responded. "We're very concerned about succession," he continued. "It will be difficult for the family to go through another twenty-year period of poor stock performance." Hockaday and Newman assured him that they were dealing with the issue of succession; in fact, the two of them were on a subcommittee of the board to select the company's next CEO, a tidbit they didn't share with Mike, who left the meeting that day disappointed.
    Not long after the meeting, Roy Hammer gave a short interview to
Fortune
magazine. In defense of the family's decision to sell down stock and still remain in control of the company (a privilege denied the rest of the company's common shareholders), he said it wasn't such a good deal for the Bancrofts to sell their Dow Jones stock at the measly price of $33 a share, down 44 percent from five years earlier. "We'd rather sell at $60 a share," he quipped. "If you know any buyers, send them my way." By then, even Hammer was caving a bit under the pressure of the Bancrofts' dissatisfaction. (Murdoch noted the piece and had begun making renewed inquiries into the Bancrofts' stance toward the company.)
    Despite his rebuff from Kann and the board, Mike Hill didn't give up. He continued talking regularly with Lowell, who, aggravated by what he saw as Hemenway's inert stewardship, decided to write a letter directly to the Bancrofts to shake them out of their torpor. Weeks after Mike Hill's letter to Kann, Lowell addressed the following to the Hemenway lawyers and the Bancroft family:
It is our belief that your company is hemorrhaging and will not survive the onslaught of Google and Yahoo. If the family wishes to save the company, it must unite and make some drastically painful decisions.
For some time, we believe the Bancroft family has taken an apathetic stance towards the direction of the company. They have allowed the firm's moral compass to wander as their financial interests have diverged from those of