A surprise move by Disney to avert a Say on Pay disaster at its next Prom Night, I’m sorry, annual meeting sees the company removing the provision to gross-up excise tax for executives if they are terminated following a change of control. This includes Iger, Rasulo, Braverman, Staggs, Phineas and Ferb, and Hannah Montana. No, strike those last three. Sorry.
Like, who’s going to buy Disney anyway.
But still, a victory for Say on Pay. What with major proxy advisory firms recommending a no vote just based on this excise tax gross up provision it looked like there might be a shareholder revolt which would be very embarrassing for Disney which has largely avoided bad press in this area since Michael “Oh, yes, OK, I made a half a billion dollars, so what” Eisner left the firm.
It just shows you what Say on Pay can do.
A journalist asked me what I thought and I answered, “well, I guess that worked.”
But it’s not all over yet, there is another pay resolution on the proxy from UNITE, that has strong proxy advisory support, which claims that Disney’s “either/or” LTIP performance targets make it too easy for executives to earn long-term bonuses. Basically the company has a TSR target or an EPS target. You don’t have to hit both, you just have to hit one, to get a payout. Now, while we encourage multiple performance targets here at GovernanceMetrics International we don’t generally like to see them mutually exclusive.
Should still be a Suite Life for the execs though and shouldn’t give them too much of a Lemonade Mouth.
Get Disney's Executive Pay Scorecard on the GovernanceMetrics website.
Paul Hodgson – Senior Research Associate