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If you’ve listened to or attended any Walt Disney Company shareholders meetings in the recent years, you may have come away with the conclusion that the majority of investors are pleased with CEO and Chairman Bob Iger’s performance, although some have raised questions about this compensation. Noe, the company is modifying Iger’s contract and instituting some heightened requirements for earning certain performance bonuses.

  • According to an SEC filing (nicely summarized by Deadline), the November 30th contract adjusts some of the measures used to arrive at Iger’s total compensation.
  • Among the changes made, Iger previously received 50% of the target number of units if Disney’s performance was equal to 25% of the companies in the S&P 500.
  • Now, Disney will need to perform in the 60.5th percentile of S&P 500 companies in order for Iger to receive the same level of award.
  • This adjustment comes after stockholder’s voted down proposed compensation package for Iger at this year’s shareholders meeting.
  • You may recall that Iger agreed to stay on as CEO of The Walt Disney Company as a condition of the 21st Century Fox acquisition.
  • Iger was originally announced to be retiring in 2015 before extending his contract multiple times.
  • While several names have been floated by the media, Disney has yet to confirm any heir apparent or other succession plans for Iger’s eventual departure.

What they’re saying:

  • A Disney spokesperson regarding Iger’s adjusted contract: “In line with the Disney Board’s pay-for-performance philosophy, the amendments to Mr. Iger’s contract establish more rigorous performance requirements for his equity award than those reflected in the original contract, further aligning Mr. Iger’s compensation with shareholder value creation. The decision to implement more rigorous performance criteria reflects feedback received directly from shareholders and underscores Mr. Iger’s and the Board’s confidence that the current strategic direction of the company will generate significant value for our shareholders.”
 
 

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