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Note: Timothy Smith of Walden Asset Management has asked the Forum to note that the article below, as well as other reports of the of the Disney vote, have presented the percentage of votes in favor of the shareholder proposals as a proportion of all votes cast, rather than as the standard RiskMetrics-ISS pro forma calculation for shareholder proposals that excludes abstentions from the total.  According to Mr. Smith, the standard pro forma calculation of the Disney vote for "Say on Pay" was 42.3%, in the average range for such votes.


Wall Street Journal, March 10, 2009 article


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MARCH 10, 2009, 4:24 P.M. ET

Disney Shareholders Defeat Say-On-Pay Proposal

By Nat Worden

Shareholders defeated a say-on-pay proposal at Walt Disney Co.'s (DIS) annual meeting Tuesday, with the measure receiving support from 39% of the votes cast.

At the media company's annual shareholders meeting in Oakland, Calif., shareholders also re-elected the company's board and defeated a proposal to end death benefits to executives.

Disney shares surged 6.5% Tuesday to $16.61, mirroring the 6.4% gain by the S&P 500 index.

The company's directors, including Chairman John Pepper and Apple Inc. (AAPL) Chief Executive Steve Jobs, were supported by more than 90% of the votes cast. Also winning approval were two company-sponsored amendments to its executive compensation plans that would allow Disney to increase the number of shares available for granting to one person.

Three shareholder-sponsored proposals that appeared on the proxy were defeated, with the say-on-pay measure receiving the most support as political momentum in Washington, D.C., to legislate say-on-pay requirements for public company builds.

Several major U.S. companies have recently adopted say-on-pay measures, including Intel Corp. (INTC) and Occidental Petroleum Corp. (OXY). Companies receiving taxpayer bailout money, like Citigroup Inc. (C), Bank of America Corp. (BAC) and General Motors Corp. (GM), are also facing public criticism for executive compensation policies.

Say-on-pay proposals require companies to allow shareholders an annual advisory vote for or against executive compensation policies as a way to give shareholders more voice in the process. Disney advised its shareholders to reject the proposal, saying it already has a compensation committee that negotiates executive pay on a pay-for-performance basis and has a robust dialogue with shareholders.

Pepper argued Tuesday that say-on-pay is too blunt an instrument for adjusting compensation policies and that adopting the measure could damage shareholder value.

"We don't believe it will provide the focus and input that would allow us to discriminate and make better decisions," Pepper said.

Excluding shareholders who voted to abstain from the issue, Disney's say-on-pay proposal was rejected by 57% of the voters, with 43% supporting the measure. Disney insiders, meanwhile, control 7.5% of the total shares outsanding, according to Factset.

"We're pleased with the results of the vote," said Timothy Smith, senior vice president with Walden Asset Management, the firm that sponsored the measure. "It won a substantial amount of support from Disney's shareholder base."

Walden, which is a unit of Boston Trust & Investment Management Co., owns 220,000 shares of Disney.

On a related measure sponsored by The American Federation of State County and Municipal Employees Pension Plan Fund, voters defeated a proposal to end death benefits, also known as "golden coffins," granted to top Disney executives, like the company's chief executive, Robert Iger, and its chief financial officer, Tom Staggs.

Disney advised shareholders to reject the measure, saying it has already abandoned the policy for new executives while removing it from existing compensation packages would require a renegotiation that could end badly for shareholders.

That proposal received 27% of the total votes cast, while another measure sponsored by the Free Enterprise Action Fund that would require the company to report all its political contributions received support from 24% of the votes cast.

-By Nat Worden, Dow Jones Newswires; 201-938-5216;


Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved




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