Walt Disney Co. (NYSE:DIS) shares edged slightly higher in pre-market after its shareholders on Thursday threw out a non-binding compensation deal proposed for its chairman and chief executive Robert Iger.
About 52% of votes cast at the company's annual meeting were against Iger's new pay deal.
READ: Walt Disney’s employees to get US$1,000 bonus windfall from tax reform
Shareholders however approved other board recommendations, including electing 10 members of its board.
Under a contract extension signed as part of Disney's December agreement to buy most of the assets of 21st Century Fox Inc., Iger is eligible to receive stock worth up to US$142mln at the then share price.
Iger also received an immediate hike in his base salary from US$2.5mln to US$3mln, with an additional US$500,000 raise if the purchase is completed.
The board had also proposed to more than double Iger’s annual target bonus – from US$12mln to US$20mln after Fox's film and television studio, cable networks and other assets become part of Disney.
Iger's contract extension through 2021, from the prior expiration in July 2019, takes effect only if the Fox deal closes.
Iger already 5th highest paid CEO in S&P500
Aylwin B. Lewis, chair of the Disney board's compensation committee, said: "The board accepts the result of today's nonbinding vote and will take it under advisement for future CEO compensation.
“We believe that the terms of Bob's extension are in the best interests of our company and our shareholders, and essential to Disney's ability to effectively maximize long-term value from this extraordinary acquisition."
Before his new contract took effect, Iger was already the 5th highest paid CEO in the S&P500, according to an analysis published by The Wall Street Journal last year.
Iger’s total compensation in fiscal 2017 was valued at US$36.3mln, down from US$43.9mln the previous year, the Journal noted.
In pre-market, its shares were up 0.51% at US$104.56.