As part of its planned changes to its long-term compensation plans, the Walt Disney Co. said going forward, its executives will have some of their stock benefits subject to performance. The company, which has come under fire from dissident shareholders and some of its directors, said about 60 percent of stock grants to its senior executives will be in restricted stock units with the remainder in stock options. Half of those restricted stock units would then be subject to vesting based on Disney's "total shareholder return" and whether it exceeds that of the S&P 500 Index over a specified time period. Disney said the new rules would take effect starting with its annual grant awards to be made this January. Disney's new stock policy comes on the heels of a shareholder lawsuit over the company's existing compensation guidelines that resulted in former company president Michael Ovitz receiving a severance package of cash and options valued at $140 million after serving in that capacity for just 14 months. In related news, former Disney board member Roy Disney, nephew of company founder Walt Disney, is urging company shareholders to reject a proposal that would mandate the company to indefinitely leave one seat on the board for a Disney heir.
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