Giant Pension Fund Will Vote Against Disney CEO Bob Iger Remaining as Chairman
"Here we go again, sliding back into a governance structure that has already proved detrimental to the company's long-term growth," a CalSTRS executive says.
The nation's second-largest pension fund said Thursday it will vote against the nomination of several directors at Disney's next shareholder meeting, including chairman and CEO Bob Iger.
The objection from the California State Teachers' Retirement System, or CalSTRS, is one it has raised several times before -- that one person should not be both chairman and CEO. In its announcement Thursday, CalSTRS even invoked Michael Eisner, who left Disney eight years ago.
"Here we go again, sliding back into a governance structure that has already proved detrimental to the company's long-term growth and to its shareholders' interests," CalSTRS director of corporate governance Anne Sheehan said.
"We've been through this fight before, in 2004-05, which resulted in the ouster of then-CEO Michael Eisner and a shareholder revolt that led to the separation of the board chair and CEO positions," Sheehan said.
That separation lasted until the 2012 shareholder meeting when Iger, who has been CEO since 2005, was elected chairman of the board.
CalSTRS also said Thursday that it objects to "the executive pay structures at Disney," which resulted in Iger receiving $40 million last fiscal year in total compensation. While the package represented a 20 percent raise over what Iger earned the prior year, Disney shares surged 76 percent in the same time frame.
Disney said in a recent filing that stock returns of 139 percent over Iger’s tenure "dramatically exceeds" the S&P 500’s return of 36 percent from Sept. 30, 2005, to Sept. 28, 2012. It added that 92 percent "of the target value of Mr. Iger’s compensation is contingent on the company’s financial results and the performance of Disney stock."
The giant pension fund owns 5.3 million shares of Disney stock worth about $263 million. On Thursday, Disney stock closed at $54.88, making it a $99.1 billion company.
CalSTRS says that when Disney shareholders gather for their annual meeting March 6 in Phoenix that it will also vote against the nominations of five other directors: Susan Arnold, Judith Estrin, Aylwin Lewis, Monica Lozano and Robert Matschullat.