Activist state pension funds on Monday said U.S. regulators had cleared the way for a nonbinding Walt Disney Co. shareholder resolution which could open the way for shareholders to nominate directors.
"This important ruling is a message to shareholders that they will be able to seek direct representation on corporate boards where appropriate," New York State Comptroller Alan Hevesi said in a statement after the Securities and Exchange Commission allowed the proposal.
The California Public Employees' Retirement System, or Calpers, the New York State Common Retirement Fund, the American Federation of State, County and Municipal Employees Pension Funds (AFSCME) and the Illinois State Board of Investment made the proposal.
The Securities and Exchange Commission is considering a similar one for all public companies.
The nonbinding Disney resolution, which will be considered at the spring annual meeting, urges the board to allow groups of shareholders with up to 5 percent of company shares held for at least two years. to nominate up to two directors on the 11-member board.
The nominated directors would be included on the company proxy, meaning shareholders would not have to wage an expensive proxy battle.
Collectively the funds have less than 1 percent of Disney, but Calpers and New York were two of the funds that spearheaded shareholder opposition Chief Executive Michael Eisner which led to him losing his job as Disney Chairman in March.
Relations have improved with Disney since then, although many of the state funds say there is room for improvement still.
A Disney spokesman said the company declined to comment.
