Eyes on the prize
Shareholders slam CEO Iger’s $300M pot of gold
Disney hasn’t been the happiest place on earth this year — not for its shareholders, anyway.
On Thursday, in a stunning rebuke to Chief Executive Bob Iger, shareholders voted downapaypackage for the Mouse House chief that compensation expert Eleanor Bloxham estimated to be worth $300 million over a four-year period.
In a non-binding vote, the package, which appeared in a Jan. 12 proxy statement, was rejected by 52 percent of shareholders voting at Disney’s annual meeting.
Forty-four percent voted in favor of the pay package and 4 percent abstained.
“The board accepts the result of today’s non-binding vote and will take it under advisement for future CEO compensation,” Aylwin Lewis, head of Disney’s compensation committee, said in a statement.
Before the vote, Disney workers protested outside Houston’s Hobby Center for the Performing Arts — where the meeting was held — demanding a “living wage.”
Iger’s contract with Disney was scheduled to end in mid-2019 but was extended through 2021 after the company agreed in December to acquire assets valued at $52.4 billion from Fox.
“Theboard of directors determined that the extension will be critical to Disney’s ability to effectively drive long-term value from the acquisition,” the proxy said.
Iger’s modified agreement came with a hefty increase in total compensation.
Iger took home $36.3 million in fiscal 2017. Under the new deal, the CEO’s base salary jumps from $2.5 million to $3 million this year, and then to $3.5 million for the last three years of the deal.
Iger’s target annual incentive rose to $20 million. The incentive will increase, to $25 million a year, should the Disney-Fox deal close as planned in 2019.
Crossing that threshold would further entitle Iger to a “potential payout on performance” that’s 200 percent greater than the current target.
The inclusion of two restricted stock awards — only one of which requires Iger to integrate Fox’s film and TV businesses — adds another $100 million to the CEO’s package, based on Disney’s current stock price.
Depending on the stock’s apprecia- tion, Bloxham, the CEO of the executive compensation advisory Value Alliance, said Iger’s four-year payout could easily top the $300 million her reading of the proxy currently suggests it’s worth.
The non-binding vote means the board is not obligated to act on it. Indeed, after Iger’s snub by shareholders, compensation-committee chair Lewis left no doubt the board stands behind its CEO.
“Bob’s track record of creating tremendous value for shareholders speaks for itself,” he said, “with a total shareholder return of 414 percent and an increase in Disney’s market capitalization from $46 billion to $156 billion during his tenure.”
Disney shares, down6percent over the past year, rose 44 cents on Thursday, to $104.03.