Disney makes case for shareholder support at annual meeting

March 6, 2014

Practitioner Insights thumbnail 2(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)

In advance of its March 18 annual meeting, The Walt Disney Co. is attempting to persuade shareholders to vote “yes” on its say-on-pay proposal, and to vote against shareholders’ proposals on proxy access and change-in-control payments.

Compensation changes following shareholder engagement

Disney filed a proxy supplement on March 4 outlining a number of recent corporate governance and executive compensation changes implemented by the company. Those changes are largely the result of narrow shareholder approval of its executive pay at last year’s annual meeting and subsequent shareholder engagement. In the past two years, less than 60 percent of Disney’s shareholders have supported the company’s say-on-pay vote.

According to Disney’s proxy supplement, following discussions with several shareholders,

Disney took several steps to respond to their concerns. First, the compensation committee amended the company’s performance-based restricted stock units so that the vesting of such awards is now subject to two separate performance tests:

  • 50 percent are subject to a three-year relative total shareholder return performance measure; and
  • 50 percent are subject to a three-year relative earnings per share performance measure.

Additionally, Disney addressed concerns with CEO Bob Iger’s pay, decreasing it by 15 percent from 2012 to 2013. The company noted that a significant decrease in Iger’s annual bonus contributed to the reduced pay.

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