Investors holding nearly a quarter of BSkyB shares failed to back the re-election of chairperson James Murdoch on Tuesday, in protest over the former chief executive’s handling of a phone-hacking scandal that has damaged the family name.

A BSkyB spokesperson said that excluding the shares controlled by News Corp, investors owning 24% of the company voted against his reappointment. An initial estimate put the figure at 19%.

That does not take into account those shareholders who withheld their vote, so the final figure could be higher when it is confirmed in a regulatory filing later in the day.

“The vote is as expected but that doesn’t mean it will not have an impact. Murdoch will have to work hard to get his image back with the institutional investment community to where it was before the scandal broke,” said Sanford Bernstein analyst Claudio Aspesi.

James Murdoch, who was well regarded as CEO of BSkyB between 2003 and 2007, had been expected to win re-election to that role, thanks to the support of family and allies.

But several shareholders said ahead of the key annual meeting that they would vote against him because they wanted a truly independent chairperson rather than an executive of News Corp, which owns 39% of BSkyB.

Murdoch is chairperson of News International, News Corp’s British newspaper arm, and deputy chief operating officer at News Corp, where he survived a massive protest vote against his membership of the board last month.

News Corp failed earlier this year in a bid to buy the rest of BSkyB.

During the phone-hacking furore, Murdoch appeared regularly as a representative of News Corp and among a flurry of statements also gave evidence to a parliamentary committee that was later criticised by politicians as being misleading.

British communications regulator Ofcom has said it is monitoring developments in the phone-hacking investigations. The regulator has a duty to ensure that owners of UK media are “fit and proper”.

Shares in BSkyB were down 0.5% at 12:47 GMT, underperforming a flat blue chip FTSE index.

“It’s a very clear shot against his bows,” said Peel Hunt analyst Patrick Yau. “Some of the current shareholders are unhappy with his performance, not necessarily to do with BSkyB because the company has performed quite well, but in terms of wider issues and perhaps he needs to heed those warnings.”

News Corp had to withdraw its $12bn offer for BSkyB in July following revelations that people working for a News Corp weekend tabloid, the News of the World, had hacked into the phones of celebrities and murder victims to secure stories.

Murdoch was not running the newspaper division when the hacking took place but critics have accused him of failing to appreciate the scale of the problem and the impact it could have.

Investors are now concerned that the damage done to the family name could spread to BSkyB in the eyes of politicians, regulators and even consumers. So far, significant numbers of BSkyB customers have not switched away.