Reuters: Disney to Revise Long-Term Compensation Plan

LOS ANGELES (Reuters) - Executives at Walt Disney Co. will have some of their stock benefits subject to performance-based requirements as part of changes to its long-term compensation plan, the entertainment company announced on Thursday.


Disney, which has faced shareholder criticism about executive compensation, said about 60 percent of stock grants to senior executives will be in restricted stock units under the new plan, with the rest in stock options. Half of the restricted stock units will be subject to vesting based on Disney's "total shareholder return" and whether it exceeds that of the S&P 500 Index over a specific period.


Under pressure from dissident shareholders, Chief Executive Michael Eisner lost his position as chairman. Angry shareholders also have sued the board for awarding former president Michael Ovitz a $140 million severance package.


Disney said its top five officers will now have to acquire and hold Disney stock equal in value to anywhere from three to five times their base salaries.


The new plan also requires top officers to hold shares representing a large portion of their gains for at least 12 months after exercising options.


Disney said the new rules will take effect starting with its annual grant awards to be made in January.


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