Pension fund opposing Disney CEO Bob Iger’s reelection to board
SACRAMENTO -- The country’s second-largest public pension fund is opposing the reelection of Walt Disney Co. Chairman and Chief Executive Robert Iger to the entertainment and theme-park giant’s board of directors.
Citing concerns about the company’s corporate governance, the $158-billion California State Teachers’ Retirement System, known as CalSTRS, announced Thursday that it will vote its 5.3 million shares of Disney stock against Iger and five other board members who are up for election at an annual meeting March 6.
CalSTRS’ holdings in Disney are worth $263 million and represent 0.3% of the company’s outstanding shares.
The pension fund said it “continues to be troubled” by Disney’s move in late 2011 to recombine its board chair and chief executive officer positions in the person of Iger. It also criticized Disney’s compensation plans, saying they were approved by “an entrenched and insular board that lacks independence from the CEO.”
Disney says its corporate governance has produced solid financial results under Iger’s leadership. From Sept. 30, 2005, to Sept. 28, 2012, Disney shareholders earned a total return of 139% compared with 36% for the Standard & Poor’s 500 index, the company said. Iger’s compensation is almost completely linked to Disney’s financial performance, the company said in an e-mailed statement.
The issue of Disney board independence has come up before and led to a shareholder revolt that resulted in the separation of the chairman and CEO posts and the eventual departure of Chief Executive Michael Eisner, CalSTRS said.
“Here we go again, sliding back to a governance structure that has already proved detrimental to the company’s long-term growth and to its shareholders’ interests,” said Anne Sheehan, CalSTRS director of corporate governance.
California’s other big public pension, the California Public Employees’ Retirement System, or CalPERS, has not announced how it will vote its Disney shares.
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