Investor Service Blasts Disney For Giving CEO Bob Iger Too Much Pay And Power

Disney sounds spitting mad about a new report from Institutional Shareholder Services that urges stockholders to vote against some of the company’s board candidates — and, in an advisory vote, to oppose the compensation agreement for CEO Bob Iger. ISS “has substituted its opinion for the studied analysis and judgment reached by the Board” based on a view of the company that’s “both deeply flawed and out of touch with shareholder interests,” Disney said today in an SEC filing. Yesterday’s ISS report charged that Disney’s agreement to make Iger the company’s chairman as well as CEO gives him too much power and is “an about-face” from the corporate governance reforms it made in 2004. At the time, Disney was fighting the widely held view that it had a weak board that merely rubber-stamped decisions from then-CEO Michael Eisner. ISS adds that Iger’s compensation “has risen sharply over the past five years despite lackluster shareholder returns.” When he becomes chairman, as well as CEO, Iger’s pay package will rise to $30M from $26M. That makes the chairman position “little more than a bargaining chip” for independent directors when they look for a successor to Iger when he steps down in 2016. ISS urged investors to vote against the members of the Governance and Nominating Committee who approved the change: Judith Estrin, Aylwin Lewis, Robert Matschullat, and Sheryl Sandberg. It also called for a “no” vote when shareholders are asked to give their opinion about the compensation arrangement. (more…)

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