Walt Disney Co. reached a compromise with activist shareholders
over certain corporate governance guidelines, avoiding a vote on
the "proxy access" matter at its annual general meeting
Tuesday.
Disney agreed, under normal circumstances, to separate the
chairman and chief executive positions. When the board determines
that the CEO and chairman should be the same person the board will
provide a written statement in its proxy materials explaining why.
In addition, should this situation arise, Disney will designate an
independent director to be lead director. Currently, Orin Smith is
Disney's lead director and Roger Iger holds both the CEO and
chairman posts.
In exchange, supporters of the proposal, which would made it
easier for shareholders to nominate independent directors, agreed
to withdraw it, according to a regulatory filing. It would have
allowed nominators who own at least 3% of Disney stock for at least
three years to submit nominations.
Shareholder-advisory firms Institutional Shareholder Services
and Glass, Lewis & Co. had both supported the proposal, while
Disney's board opposed it. A similar proposal last year received
40% support from voting shareholders.
Some activist shareholders have pushed proxy access for years.
Official company ballots currently list only management's choices,
forcing investors who hope to shake up company boards to wage
costly campaigns and foot the bill for distributing their own
ballots.
In early 2012, Hewlett-Packard Co. agreed to give its
stockholders the chance to approve proxy access through a bylaw
vote at its 2013 annual meeting after an activist investor agreed
to withdraw a nonbinding proposal for the 2012 meeting. The bylaw
passed, as expected.
Shareholders of Nabors Industries Ltd. approved a nonbinding
proxy access resolution in 2012, marking the first time such a
proposal had passed at a major company. Though the same resolution
again won majority support last year, Nabors has yet to embrace
proxy access. Proponents have resubmitted the resolution for this
year's annual meeting.
As the annual meeting got underway Tuesday the company said
preliminary results from its "say on pay" vote showed that 80% of
shareholders supported the company's executive pay practices, up
from 58% last year. ISS this year recommended supporting the
company, in a change from its recommendation last last year. Glass
Lewis again recommended a "no" vote.
Write to Ben Fritz at ben.fritz@wsj.com and Joann S. Lublin at
joann.lublin@wsj.com
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