Unite Here union targets Disney executive pay
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The labor union representing hourly workers at the Disneyland Resort hotels is seeking to give shareholders a greater voice in executive compensation at parent Walt Disney Co.
Unite Here has put forth a pair of proposals that it says would more closely align an executive’s pay and bonuses to the company’s performance, holding out Chief Executive Robert A. Iger’s pay package for special scrutiny. The group cited harsh criticism of Iger’s salary by two corporate governance authorities in its filing with the Securities and Exchange Commission.
Corporate Library, a governance research firm, gave Disney a “D” in September, expressing concerns over executive compensation. It noted that Iger received a 12% bump in compensation from fiscal 2008 to 2009, despite a 25% drop in net income in that time, according to Unite Here’s filing.
RiskMetrics Group wrote in January 2009 that “Mr. Iger’s multiple pay increases do not seem to align with the company’s mediocre performance.” It continued its criticism this past January, saying the company could improve how it discloses aspects of Iger’s compensation –- such as “a sizable bonus opportunity” related to “potential excessive risk-taking.”
Unite Here wants to mail an independent solicitation to Disney’s shareholders, asking that they be allowed an annual advisory vote on executive compensation.
The union, which represents more than 2,000 housekeepers, food and beverage workers, front-desk staff and other hourly workers at the Disneyland Hotel, the Grand Californian Hotel and the Paradise Pier Hotel, has been in contract talks with Disney for three years.
Disneyland Resort spokesman John J. Nicoletti called the petition a “publicity stunt” related to the protracted labor negotiations.
“For nearly three years their members have been working without a contract,” Nicoletti said. “We’ve offered a fair, comprehensive contract with annual wage increases, paid sick leave and reliable, affordable healthcare. This is the only one of 31 unions that is operating without a contract.”
The union also is looking to add a resolution to Disney’s proxy seeking shareholder support for limiting the number of tests that can be used to determine whether senior executives qualify for stock incentives.
In 2009, Disney’s compensation committee applied three sets of criteria to qualify, a practice that has been reduced to a single retest this year, according to a filing by Disney with the SEC.
“The intent of these stock awards is to incentivize good performance,” said Andy Lee, research analyst for Unite Here in Los Angeles. “If you do well, the company does well, you’ll get these awards. If you have these multiple tests, it makes it easier to get awards. It separates the critical link between performance and compensation.”
-- Dawn C. Chmielewski