Disney shareholders want say on executive compensation
A group of Walt Disney Co. shareholders wants a say on the wages and benefits paid to the company’s executives.
The proposal would give Disney investors a nonbinding, advisory vote on the pay packages given to Chief Executive Bob Iger and other top executives. The measure reflects growing investor ire over generous executive compensation.
“With the advisory vote, we want to provide the company with feedback on whether the board did a good job in explaining the basis for their compensation decisions,” said Hye-Won Choi, head of corporate governance issues for TIAA-CREF, which owns about 14.6 million Disney shares. “What we want to achieve is really compensation programs that are performance-based, that drive the business strategy and that will result in long-term value creation for shareholders.”
A handful of companies have already agreed to an advisory vote, including Blockbuster Inc. and Intel Corp.
Disney executives declined to comment on the issue before today’s annual meeting in Oakland, when preliminary results will be announced.
However, in securities filings Disney advised investors to vote against the proposal, saying an advisory vote was not warranted. “A shareholder vote is simply too blunt an instrument for dealing with the complex interrelated judgments involved in executive compensation,” Disney said in its proxy statement. “A simple up or down vote on compensation matters by shareholders would likely provide little useful guidance about the driving force behind the vote.”
RiskMetrics Group Inc., a shareholder advisory group, recommended that investors support the advisory vote to enhance board accountability, “rather than as a disapproval of this company’s current compensation packages.”
In 2008, Iger received $30.6 million in total compensation — pay that included a $13.9-million bonus. The company entered into a new employment agreement with Iger, extending his term through Jan. 31, 2013. It also increased his minimum target bonus to $10 million from $7.25 million and awarded 3 million options to buy Disney stock at an exercise price of $29.51. The compensation committee said it recommended the new deal because of Iger’s success during the initial two years in his tenure as CEO and the desire to “provide incentives for him to remain at the company.”
On the eve of the shareholder’s meeting, Disney also unveiled a major green initiative. The company set goals to reduce emissions, waste and electricity and fuel use over the next three to five years. The new goals are part of the company’s new corporate responsibility report, which provides information about charitable giving, nutrition, online safety for kids and workplace diversity.