SEC Deals Setback to Pension Funds in Disney Proxy Fight

Dec 29, 2004  •  Post A Comment

Walt Disney Co. shareholders looking to nominate their own slate of directors to the media giant’s board suffered a setback Tuesday when Securities and Exchange Commission staff reversed itself and said that Disney could withhold from its 2005 proxy a proposal that would have permitted shareholders to directly nominate directors.

The move came just weeks after SEC staff made a nonbinding ruling that the proposal should be included in the proxy document. The proposal, which permitted any shareholder with more than a 5 percent stake in Disney to directly nominate board members, was introduced in October by a consortium of pension funds, including state funds from Illinois, New York and California.

The SEC staff’s about-face came after Disney appealed the agency’s first ruling, which was made two weeks ago.

Representatives of the pension-fund consortium said they plan to appeal the agency’s latest decision.