What to Expect During Disney’s Annual Meeting

For two years, Walt Disney’s DIS annual meeting has provided theatrics out of one of the company’s superhero movies. Both times, CEO Bob Iger prevailed over activists criticizing him for his succession planning, the firm’s belated entrance into the streaming business, and stock underperformance.

No activists are trying to repeal Disney’s bylaws or get board seats this year, but a renewed focus on executive pay at the March 20 meeting may ignite new drama.

Bob Iger’s Pay

Last year, just 80% of shareholders approved Disney’s executive compensation package in a vote called “say on pay.” That’s low; according to Morningstar Sustainalytics, in 2024, S&P 500 executive compensation raises had a median approval rate of 93%. A vote share under 80% “can grab a board’s attention and encourage more constructive engagement with shareholders to avoid more aggressive shareholder actions,” Sustainalytics wrote in a recent report on say on pay.

One possible reason was Iger’s pay package combined with the stock’s underperformance. In the fiscal year ended Sept. 30, 2023, he earned $31.6 million, while Disney stock fell 33.8% and shares of a peer group supplied by the company rose 28.3%. In fiscal 2024, Iger’s package climbed 30.0% to $41.1 million, while Disney stock fell 21.0% and the peer group returned 79.6%. (For comparison, median CEO direct compensation rose 7.8% that year.)

“That Iger’s pay jumped while Disney continued to lag its peers in generating shareholder returns could cast a shadow over this year’s Say on Pay vote,” says Jackie Cook, who oversees the environmental, social, and governance voting policy advisory group at Sustainalytics.

Iger’s contract expires in 2026. In Disney’s proxy statement, chair James Gorman notes that the company plans to “announce a CEO successor in early 2026.”

Disney Stock Lags

Going into the annual meeting, Disney stock is down 11.4% this year, versus a 6.2% decline for the Morningstar US Market Index. In a Feb. 5 note, Morningstar analyst Matthew Dolgin wrote: “We believe Disney is successfully navigating the evolution from a media industry driven by linear television networks bundled by pay-TV distributors to one reliant on streaming services. We don’t think the new media landscape will ever be as profitable as the prior one, but Disney’s brands, deep ownership of valuable intellectual property, and diversity in its business make it best positioned among the legacy media companies to thrive in the modern era. Disney is focusing on streaming, sports, and experiences as it manages a continually declining linear television business.”

Disney stock is undervalued, recently fetching $98.64 per share, versus Dolgin’s fair value estimate of $125.00.

Disney Faces Votes on Climate Risk and Advertising Practices

Separately, Disney investors will vote on three proposals (down from six last year, which included two from activists). You can read Disney’s proxy statement here, including its recommendations to vote against the proposals

• Disney is asked to report on climate risks to retirement plan participants, particularly younger employees who have longer investment time horizons. The proposal asks the firm to consider climate risks associated with certain retirement plan offerings, particularly BlackRock’s LifePath series, which accounts for 31% of total plan assets and which it says “invest heavily in high-carbon companies and companies contributing to deforestation.” The proposer is James McRitchie in conjunction with shareholder advocate As You Sow. Disney cites its goal to achieve net zero emissions for direct operations and new projects by 2030.
• Disney is asked to withdraw from its partnership with the Human Rights Campaign’s Corporate Equality Index and protect shareholder value by regaining a “neutral” footing in political matters. Disney’s “perfect score” on the index was achieved by a “partisan, divisive, and increasingly radical” agenda, according to the proposal from the National Center for Public Policy Research.
• Disney is asked to report how it evaluates risks associated with its advertising buyers and sellers and their potentially discriminatory views. The proposal claims Disney did harm by collaborating with the Global Alliance for Responsible Media, a group formed in 2019 to fight the spread of “disinformation,” which the proposal says inappropriately censored content. The proposal was made by Dana Tuggle, represented by Bowyer Research. GARM disbanded in August 2024 after X filed an antitrust lawsuit.