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March 13 Walt Disney Co shareholders are expected to vote at its March 18 annual meeting on a resolution that asks the company to allow large shareholders to nominate board members, the latest bid by investor groups to win "proxy access" rights.
The Connecticut Retirement Plans and Trust Funds and the California State Teachers Retirement System proposed that the board allow owners of at least 3 percent of the company's stock be empowered to nominate up to 20 percent of the board, according to a regulatory filing from Disney on Jan. 24. Under the non-binding proxy access proposal, shareholders must own their stake for three years before they have nomination rights.
The company's shareholders rejected a similar proposal last year, with 40 percent voting in support.
"Disney is a bellwether company and the vote will get a lot of attention," said Robert McCormick, chief policy officer of proxy advisory firm Glass Lewis, which has advised its clients to vote for the measure.
This year, shareholders at as many as 20 companies will consider proxy access proposals, said Patrick McGurn, special counsel to proxy advisory firm ISS that has advised Disney shareholders to approve the measure. Of three shareholder votes so far this year, the non-binding proposal was adopted at slot machine maker International Game Technology and rejected at Apple Inc and Walgreen Co.
On February 28, Apple shareholders soundly defeated such a measure, with only 4 percent of those casting votes in support of a non-binding resolution that would allow investors holding between 1 percent and 5 percent to nominate up to 24 percent of the board.
Last year, 12 companies had the measure on their ballots, according to ISS, with shareholders at Verizon and CenturyLink approving proxy access. Among those who voted it down with Disney shareholders in 2013 were those at Bank of America, Goldman Sachs, Staples and Netflix Inc.
Proponents of the measure for the upcoming Disney meeting say the access to the nomination process would "more easily promote independent director candidates to enhance accountability to shareholders," according to the regulatory filing from Disney. They cite the decision by Disney's board to elevate Chief Executive Bob Iger in 2012 to the chairmanship as well as one reason the provision is needed.
European institutional investor Legal & General Investment Management also supports the proposal.
Disney's board, which recommended shareholders vote against the proxy access proposal, said the company has in place "a well-defined process of shareholders to nominate directors" and bring to attention potential candidates to the nominating committee.
In the last year, former Starbucks Chief Executive Orin Smith, Disney's independent lead director, has met with many of the company's largest shareholders, the board said in the filing.