Bloomberg – Disney Cuts Iger’s Future Pay by Millions Before Annual Meeting
April 4, 2019
- Board slashes planned pay increases tied to Fox deal closing
- Proxy advisers said investors should nix the compensation plan
Walt Disney Co., facing criticism over excessive pay packages, cut tens of millions of dollars of future potential earnings for Chief Executive Officer Bob Iger.
The move, disclosed in a regulatory filing Monday, comes days before the company’s annual meeting, where investors are set to vote on the entertainment giant’s executive compensation program. Disney didn’t provide a reason for the planned reduction, the second change to Iger’s pay in four months.
Iger’s target annual compensation will be cut 28 percent to $35 million after Disney completes a deal to acquire assets from Rupert Murdoch’s 21st Century Fox Inc., according to the filing. The changes don’t affect more than $100 million of equity awards Iger received as part of a 2017 contract extension.
The cut precedes Disney’s March 7 annual meeting, where Iger’s contract was likely to face resistance from investors. Institutional Shareholder Services, the proxy-advisory firm that sells voting recommendations to asset managers, said in a Feb. 11 report that the pay program should be rejected, citing “ongoing concerns about the structure and magnitude” of Iger’s annual compensation.
Rival proxy advisers Glass Lewis & Co. and Egan-Jones also issued reports critical of the pay program.
“Disney’s had a problem for years with pay — they’re walking this tightrope trying to keep Iger on board while figuring out the succession plan,” said Robin Ferracone, CEO of Farient Advisors, a compensation-consulting firm. “Even with this change, I think they’re going to have some pressure. They will continue to be scrutinized for a few years after this.”
“I am proud to be leading the Walt Disney company through this important time and believe the changes I, with the board, have made are in the best interest of the company,” Iger, 68, said in an emailed statement.