By Aisha Al-Muslim
In a rare rebuke of Walt Disney Co. leadership, shareholders voted down a nonbinding endorsement of Chairman and Chief Executive Robert Iger's compensation plans, which could balloon well over $100 million under a recent contract extension.
Under the employment agreement Mr. Iger signed in December along with his company's deal to acquire assets of 21st Century Fox Inc., the executive could receive as much as $142 million worth of stock, based on the share price at the time.
The board also said at the time it would extend the CEO's contract through 2021, from July of 2019, should the Fox deal close. Mr. Iger is eligible for performance-based stock only if Disney's acquisition of the Fox assets closes.
In Thursday's vote at the company's annual meeting in Houston, 52% of shareholders voted against the nonbinding advisory resolution, 44% in favor, and 4% abstaining.
Disney's board of directors said it accepted the result, and would take it under advisement for future executive compensation.
Mr. Iger has a record of creating value for shareholders, the board argued, with a total shareholder return of 414% and an increase in Disney's market capitalization from $46 billion to $156 billion during his tenure.
"The Board decided it was imperative that Bob Iger remain as Chairman and CEO through 2021," said Aylwin B. Lewis, chairman of the board's compensation committee, in a statement. "21st Century Fox similarly believed that Bob's continued stewardship was essential for the deal."
Mr. Iger's total compensation in 2017 was valued at $36.3 million, down from $43.9 million in 2016. He received a bump in his base salary to $3 million on Jan. 1 from $2.5 million. If the 21st Century Fox deal is completed, his salary will grow to $3.5 million.
"Our pending acquisition of 21st Century Fox will expand our ability to drive long-term value as an extraordinary entertainment company with the content, the platforms and the reach to meet the growing demands of consumers around the world," Mr. Iger said in a statement.
Shareholders on Thursday also elected 10 members to the board of directors, including Messrs. Iger and Lewis.
A shareholder proposal for the company to be more transparent in its lobbying activities was rejected, as was a proposal to change the proxy access bylaws to make it easier for shareholders to nominate directors.
Write to Aisha Al-Muslim at [email protected]