Administration August 2, 2003

Disney Stockholders Reject Auditing Reform Plan

February 20, 2002 (PLANSPONSOR.com) - Stockholders of the Walt Disney Co, the first company - following the Enron scandal - to announce plans to have different companies doing its auditing and consulting functions, have voted against splitting those functions.
Reported by

On first announcing the plan – which was subject to shareholder approval, Disney noted that the decision was no reflection on auditor Pricewaterhouse Coopers – to which it paid $9 million in auditing fees, and $32 million in other fees – but an acknowledgement that such arrangements could constitute a conflict of interest, the WSJ reports.

Disney originally opposed such a proposal – originally put forward by the investment arm of the union pension fund United Association, but reversed its position.

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Mass Proposal

The United Association is pursuing such shareholder proposals at about 30 companies – Disney was the first to bring the matter to a vote. But despite the company’s support of the proposal, it was rejected by about 54% of the voting shareholders.

After the proposal’s defeat was announced, Disney Chairman and Chief Executive Michael Eisner said the company would “proceed as if it had been” passed. A formal plan spelling out how Disney will separate the functions is expected later, according to the report.

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