Walt Disney Co. investors turned back calls for a future split of the two top jobs held by Chairman and Chief Executive Officer Robert Iger, rejecting the demands of three state pension funds.
Sixty-five percent of shareholders voting opposed the split, Disney said today at its annual meeting in Phoenix. The company’s executive compensation and bonus plans passed, and Iger was re-elected to the board with 98 percent support.
Investors in Disney, the world’s largest entertainment company, were considering a proposal by the Connecticut Retirement Plans & Trust Funds to split the roles of chairman and CEO going forward. Iger, who plans to step down as CEO in March 2015, led Disney to a 76 percent total shareholder return for the fiscal year ended in September, the company has said.
“He’s had phenomenally good performance,” said Kannan Ramaswamy, a professor of management at the Thunderbird School of Global Management in Glendale, Arizona, who spoke before the meeting. “Shareholders should be happy. This was not the most opportune time to pick a fight.”
Disney reached an all-time closing high yesterday of $56.48. The shares were little changed at $56.45 as of 2:26 p.m. in New York.
The Connecticut funds said in the company’s Jan. 18 proxy filing that it was in the best interest of shareholders to separate board leadership and management.
The California Public Employees’ Retirement System and the California State Teachers’ Retirement System, the two largest U.S. pension funds, also supported the non-binding measure to split top management duties. They were joined by proxy advisers Institutional Shareholder Services Inc. and Glass Lewis & Co.
Calstrs went further, saying it opposed re-electing Iger and five other nominees to the board, as well as the incentive and compensation plans at Burbank, California-based Disney.
Calpers supported the board nominees and the executive pay plan, which garnered 58 percent shareholder support. An amendment to the bonus plan was approved by 88 percent.
“If the shareholders aren’t happy, let them sell their stock,” investor Bill Murdoch, 76, a retired engineer from Sedona, Arizona, said at the meeting. “Don’t you think he’s worth it? I do.”
Iger, 62, held only the CEO’s title until last year, when he was named to the added role of chairman as part of a new employment contract. After relinquishing the role of CEO, he will serve as executive chairman for 15 months through June 30, 2016, according to the company.
Iger’s fiscal 2012 compensation totaled $40.2 million based on SEC reporting rules, according to the company’s annual proxy filing. That includes a salary of $2.5 million, plus stock and option awards, incentive pay and an increase in the value of his pension.
Disney appointed an independent chairman in 2004 amid a shareholder revolt against then-CEO Michael Eisner.
In its proxy statement, the company said it changed Iger’s compensation last year based on discussions with large investors to better link pay to earnings and stock performance.
The company’s 76 percent total shareholder return for the fiscal year ended in September was more than double the 30 percent return of the S&P 500 Index, the company said.
“They’ve done a good job,” said Noble Jackson, a 61-year-old veterinary science professor from Tucson who said he voted against the chairman-CEO proposal. “If it ain’t broke, don’t fix it.”