I posted a piece that I wrote this week about the Disney Shareholders meeting this year, in which I said I thought that it should be fairly routine and stress free. However the Wall Street Journal is now predicting quite a bit of drama from the hedge funds that are asking to separate the Chairman/CEO jobs.
Amongst the issues they have is apparently Bob Iger's pay package. From my understanding, roughly 92% of Bob Igers pay package is incentive based according to the 2013 annual proxy report. What that means is the better the company does, the bigger his bonus is. I don't think that's an bad work model personally. It provides a reason for Iger to do everything he can, because the more successful the company is, the more successful he is. That incentive pay is part of his contract with Disney, yet it needs to be approved by the board yearly. Over the past year Disney's profits have soared and financially the company over the past three years has been doing VERY well under his guidance. What that means is that Bob Iger should be racking in a GIGANTIC chunk of change in his incentive based pay. Personally as a shareholder, I have no problem with that. My annual dividend was three times greater than ever before. You go Bob!
However, two to four large pension funds are urging large shareholders to vote in favor of a shareholder proposal to separate the roles again, and to vote against "the advisory vote on compensation."
WHY? Iger is doing his job, shouldn't he get paid. We're not talking about a man who is taking crazy amounts of money out of a failing company. We're talking about a guy who has lead the company into record years. Should he not get his share of the record profits?
Whether you are a shareholder or not, what do you think about this? How do you feel Bob Iger is doing for the company? If you take away the profits, is he still a good leaders? Has he preserved and grown the legacy left behind by Uncle Walt? Tell me what you think.
