Pension Funds Propose Enhancing Shareholder Power at Disney

October 13, 2004 ( - Four major pension funds, showing that they're willing to throw their weight around, have filed a proposal with the Securities and Exchange Commission (SEC) that would give shareholders the right to nominate directors at Walt Disney Co.

The California Public Employees’ Retirement System (CalPERS), the New York State Common Retirement Fund, American Federation of State, County and Municipal Employees Pension Funds and the Illinois State Investment Board have jointly filed the proposal that would allow shareholders to nominate two of the 11 Disney directors. The proposal would also include them on the company’s proxy, according to CBS MarketWatch.

The proposal has been submitted in time to be voted on at Disney’s 2005 annual meeting. If a majority of shareholders approve the measure, it would take effect at the 2006 shareholder meeting. The four pension funds own more than 18 million shares of Disney combined.

This is not the first time that pension funds have weighed in on issues surrounding shareholder initiatives at Disney and other companies (See Clear Conscience? ). At the last annual meeting, multiple pension funds called for CEO Michael Eisner to step down from his post, citing poor performance. Eisner lost his chairman title following this action, and later said that he would resign from the executive position in 2006 (See Beleaguered Disney Head Tries to Shore Up Support ).

“The first step in restoring investor confidence was for Michael Eisner to step down, the second step was to search for a successor as the CEO, but the third step — getting independent directors to serve next year and in the years ahead — is the most important step of them all,” Sean Harrigan, CalPERS president, said in a press release.