Pension Funds press Disney Board

[Sarangel]

From Reuters:

Four of the biggest U.S. public pension funds said on Tuesday they would press for the right to have shareholders nominate directors to Walt Disney Co.'s board of directors.

The funds, including the California Public Employees' Retirement System (CalPERS) and the New York State Common Retirement Fund, plan to vote for shareholders to be able to nominate up to two directors at Disney's 2005 annual meeting.

Disney's Chief Executive Michael Eisner, who plans to step down in 2006, gave up his role as chairman this year after holders of 45 percent of Disney shares withheld votes for his re-election to the board amid campaigns from large funds and former directors Roy Disney and Stanley Gold.

The ability for shareholders to nominate directors is a contentious issue backed by corporate governance reformers and largely opposed by U.S. corporate executives.

The American Federation of State, County and Municipal Employees Pension Funds (AFSCME), and the Illinois State Board of Investment also backed the latest proposal, which was filed with the U.S. Securities and Exchange Commission.

"We have agreed to co-sponsor this resolution to use in the event the Disney Board doesn't satisfy our concerns about independent directors," CalPERS President Sean Harrigan said in a joint statement from the funds.

If the group, which owns less than 1 percent of Disney shares, wins enough votes for the proposal in 2005, shareholders could be able to nominate directors in 2006, according to the statement.

Disney currently has 11 board members but its bylaws set the board size at nine to 21, according to the statement.