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Shareholders did not vote on new CEO Bob Chapek’s compensation - only on a pay plan for other executives in fiscal year 2019, which ended Sept. 28. Chapek is seen here during the 10th anniversary ceremony of Hong Kong Disneyland on Sept. 11, 2015.Tyrone Siu/Reuters

A large minority of Walt Disney Co shareholders who cast votes at the company’s annual meeting on Wednesday opposed the company’s executive pay plan, Disney said.

Disney said 46 per cent of votes were cast against the plan and 53 per cent in favour of the plan, with 1 per cent abstaining. The vote is advisory and non-binding.

About 82 per cent of total shares outstanding were represented by the vote, the company said.

Disney has previously faced criticism over former Chief Executive Bob Iger’s pay, which was $65.6 million in the company’s 2018 fiscal year, up 80 per cent from the previous year. At its 2017 annual meeting, Disney suffered a rare rebuke when a majority of shareholders opposed its executive pay in a non-binding vote.

Disney announced Iger stepped down on Feb. 25 but remains at the company as executive chairman. He will focus on content creation until he retires at the end of 2021.

At the meeting in Raleigh, North Carolina, shareholders did not vote on new CEO Bob Chapek’s compensation – only on a pay plan for other executives in fiscal year 2019, which ended Sept. 28. That plan set Iger’s 2019 compensation at $47.5 million, according to a Jan. 17, 2020 filing.

But Julian Hamud, senior director at proxy advisory firm Glass Lewis, said via e-mail that “Both transitions are quite expensive, and it was not lost on us that Mr. Chapek’s employment agreement explicitly states that he reports to the executive chairman.”

Glass Lewis advised shareholders to oppose the 2019 executive pay plan in a non-binding vote, as did other proxy advisers Institutional Shareholder Services and Egan-Jones.

In Disney’s current proxy statement, the company acknowledged the pushback on executive pay, stating that during the fiscal year 2019, members of management and the board spoke with 11 of the company’s top 20 shareholders and contacted approximately 74 per cent of its largest 50 investors, “seeking input on compensation and governance matters.” Based on that feedback, Iger agreed to reduce his compensation on three different occasions.

In his new role as chairman, Iger’s employment agreement will continue unchanged. So until he retires at the end of 2021, Disney will be paying for both Iger and Chapek, whose compensation is set at a minimum of $25 million annually.

The Florida State Board of Administration, which manages pension assets for Florida state and local employees and had 2.3 million shares of Disney as of the end of 2019, voted against the compensation plan this year. “It seems to be maximized for payout without sufficient ties to the performance levels,” said Jacob Williams, corporate governance manager with the organization.

In a March 5 filing, Disney defended the plan, writing that “Iger’s compensation in fiscal 2019 reflected the considerable value he generated for the company and its shareholders, with the completion of the acquisition of Twenty-First Century Fox and implementation of the company’s transformative direct-to-consumer strategy, culminating in the successful launch of Disney+.

More than 90 per cent of Iger’s compensation is performance-based, and under his leadership since 2005, Disney has delivered total shareholder return of 559 per cent, compared with just 223 per cent for the S&P 500 as of fiscal year-end 2019.”

Disney said that 92 per cent of shareholders who cast their vote at the annual meeting had voted to elect all nine members of the board of directors. The company also announced plans to release a new Beatles documentary, directed by “Lord of the Rings” director Peter Jackson, on Sept. 4.

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