Walt Disney Co.'s naming of Robert A. Iger to succeed Michael D. Eisner as CEO was praised by three proxy-voting advisory firms in terms of the succession process, while the AFSCME pension fund is concerned.
Disney's board of directors elected Mr. Iger to succeed Mr. Eisner, effective Sept. 30. Mr. Iger, already a director, is currently president and COO.
"I take a positive view," said Kent Hughes, managing director, Egan-Jones Proxy Services. "Iger's taking over is the fruit of a lot of attention investors have been paying to the succession issue.
"It's easy from the sidelines to complain they didn't get someone from the outside," Mr. Hughes said. "I don't think necessarily a superior candidate would come from the outside. Indications are he is an excellent choice."
Disney has taken a number of positive steps in the past year, including separation of the chairman and CEO positions, Mr. Hughes added.
At Proxy Governance, Shirley Westcott, associate managing director for policy, said, "I think the jury is still out in terms of Iger. I think shareholders should be pleased about the naming of a successor to Michael Eisner" — the decision hadn't been expected until this summer. Ms. Westcott said shareholders influenced the process, starting with withholding votes for Mr. Eisner and some other directors in 2004.
Institutional Shareholder Services "is satisfied with the process," Cheryl Gustitus, senior vice president-communications and marketing, said in a statement. "Eisner will leave the company's employment in September and won't stand for re-election to the board following the next meeting. He won't seek to replace (George) Mitchell as chairman, which would have been a concern. Although not an exhaustive search, the board kept its promises to hire a search firm and to consider outside talent."
At the American Federation of State, County and Municipal Employees, Richard C. Ferlauto, director-pension and benefit investment policy, said, "It raises red flags for public (pension) funds engaged with Disney over the nomination process." He is concerned about Mr. Eisner's influence on the board in the succession process. "I was hoping the (CEO search) process would be more open" to outside candidates, Mr. Ferlauto said. The $600 million AFSCME pension fund, Washington, sought unsuccessfully to permit shareholders to nominate some directors of Disney.
