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Big Disney Stockholder Urges More Independence for Board

January 15, 1998| From Reuters

NEW YORK — A large Walt Disney Co. shareholder filed a resolution on Wednesday urging the media and entertainment giant to boost the independence of its board of directors and rein in executive salaries.

The College Retirement Equities Fund, or CREF, which owns about 6.9 million--or 1%--of Disney shares valued at about $700 million, said it filed the resolution to improve the company's long-term shareholder value.

Noting it was challenging Disney's governance and compensation policies for "the second year in a row," CREF said a more independent board would make Disney "a better company . . . and hence a better investment."

CREF argued that an overwhelming majority of Disney directors are closely affiliated with either the company or its chief executive, Michael Eisner. It also questioned compensation packages awarded to Eisner and other Disney executives, including former No. 2 man Michael Ovitz.

Disney disputed CREF's contentions and said most of its board members are independent.

"We believe that the vast majority of our board is independent by any rational guidelines," said John Dreyer, a Disney spokesman.

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