Disney investor pledges to continue fight as shareholders reject proposal to distance company from LGBT group
An activist investor vowed to fight another day after Disney shareholders roundly rejected his proposal to reconsider its participation in the Human Rights Campaign’s (HRC) corporate equality index.
Enterprise Project Executive Director Stefan Padfield said he's "very likely" to engage with the House of Mouse next proxy season, and blamed the failure of his proposal on "bias and conflicts of interest."
"It is not surprising that our proposal received low support, given the concerns we have about bias and conflicts of interest infecting the votes and recommendations of the Big 5 asset managers and proxy advisors, as well as the company’s management," Padfield said.
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The HRC releases a yearly survey which grades corporations on their compliance with a litany of LGBTQ initiatives, among them "Equal health coverage for transgender individuals without exclusion for medically necessary care" and "Integration of gender identity and sexual orientation in professional development, skills-based or other leadership training that includes elements of diversity and/or cultural competency." Disney has had a perfect score on the Equality Index every year since 2007.
Despite losing the vote, Padfield said that he saw indications that Disney was heading in what he views as a positive direction with respect to its DEI and ESG initiatives.
"The issues raised by our proposals remain relevant to Disney’s bottom line, and we arguably saw an indication of this in the fact that neither ESG nor DEI were mentioned once, directly or indirectly, in Iger’s opening remarks -- suggesting the company is slowly distancing itself from the leftist radicalism embodied in those agendas," Padfield said.
Disney has been backing off some of its controversial DEI initiatives since President Donald Trump took office. Disney confirmed it dropped their "Reimagine Tomorrow" program in February.
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According to Reimagine Tomorrow’s now-defunct webpage, the program was dedicated to "amplifying underrepresented voices and untold stories as well as championing the importance of accurate representation in media and entertainment."
The page also listed racial and gender breakdowns of their content and workforce as of 2021 and boasts of their Business Employee Research Groups which represent employees from different ethnic backgrounds.
"The Walt Disney Company Has Established Business Employee Resource Groups Across 10 Dimensions: Asian/ Native Hawaiian/ Pacific Islander, Black/ African American Disabilities Hispanic/ Latin X Jewish, LGBTQ+, Multicultural, Native American/ Indigenous Veterans/ Military, Women," the website boasted.
Disney also announced it has stopped using DEI as a factor in its employee compensation. The company will now instead use new "Talent Strategy" metrics which are centered on "business success."
Disney also announced it has stopped using DEI as a factor in its employee compensation. The company will now instead use new "Talent Strategy" metrics which are centered on "business success."
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"This factor will assess how leaders uphold our company values, incorporate different perspectives to drive business success, cultivate an environment where all employees can thrive, and sustain a robust pipeline to ensure long-term organizational strength," per the email.
While Padfield is encouraged by the company's seeming retreat from DEI, he feels that "more work needs to be done."
"Much more work remains to be done, and we will continue to expose these issues until corporate America gets back to creating prosperity by focusing on great products and services rather than partisan politics," he said.