3 Min Read
By Lisa Richwine
Feb 14 (Reuters) - The California State Teachers' Retirement System (CalSTRS) said on Thursday it will oppose Walt Disney Co's combination of the CEO and chairman roles, and its executive pay plan at the company's annual shareholder meeting in March.
The second-largest U.S. pension fund owns about 5.3 million Disney shares, a 0.3 percent stake worth $263 million.
Robert Iger became CEO of the media and theme park company in 2005 and was elected chairman at last year's annual meeting. He received $40.2 million in total compensation last year, according to regulatory filings.
"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," said Anne Sheehan, CalSTRS director of corporate governance.
Disney, in its proxy statement released on Jan. 18, said the company recorded a total shareholder return of 139 percent during Iger's tenure, far above the 36 percent return for the S&P 500 during the same time. Ninety-two percent of Iger's compensation is contingent upon the financial results and stock performance, Disney said.
CalSTRS' Sheehan said investors have "been through this fight before" in 2004 and 2005, leading to the ouster of then-CEO Michael Eisner and the splitting of the roles.
CalSTRS said it will support a shareholder proposal from the Connecticut Retirement Plans and Trust Funds to keep the roles separate in the future, except under "extraordinary circumstances." CalSTRS also said it will vote "no" in a non-binding vote on executive compensation.
In its regulatory filing, Disney urged shareholders to vote against the proposal to split the jobs "because it seeks to replace the current, clear and workable standard for electing a chairman with a vague and unworkable standard."
Disney's annual meeting will take place on March 6 in Phoenix.
Institutional Shareholder Services, a shareholder governance group and the treasurer for the state of Connecticut, objected last year to Iger holding both jobs.
Disney shares slipped 8 cents to close at $54.88 on the New York Stock Exchange on Thursday.