Reining in executive compensation, seeking more board accountability, and — despite a recent setback — proxy access that would allow shareholders to nominate directors are likely to be the major issues of the 2005 proxy season, according to institutional investors and consultants.
In terms of high-profile campaigns against specific companies, Walt Disney Co., in sort of a repeat of 2004, was shaping up to again be a target of shareholder activists and a rancorous proxy vote about its board of directors until a Dec. 28 decision by the staff of the division of corporation finance of the Securities and Exchange Commission.
The decision sided with Disney's board, allowing it to exclude a shareholder proposal, filed by four pension funds, on allowing shareholders some direct involvement in director nominations.
Whether the Disney's board meeting, usually early in the proxy season, has the potential to set a tone and gauge the strength of institutional investors to press demands, and the willingness of boards of directors to consider shareholders more as partners than pains could depend on the reaction by Disney officials to negotiations with shareholders in related issues, said Richard C. Ferlauto, director-pension and benefit investment policy, American Federation of State, County and Municipal Employees, Washington.
But the $600 million AFSCME staff pension fund is still pressing similar shareholder proposals at three other companies.