Warning: Deceptive Disney Shareholder Proposal
For the Disney shareholders out there, yesterday you received an email asking you to vote your shares. I typically only briefly read through the proposals and usually vote in line with Disney's recommendation (save for Chapek's board spot during those dark years). However, this one, Item 5, caught my attention. The way this conservative organization, the National Center for Public Policy Research, has worded this proposal it makes it sound like you are voting to join the HRC's Corporate Equality Index. THIS IS NOT THE CASE. This group is angry that Disney has received perfect scores on the index and is asking Disney to STOP participating. If you dig through proxy materials you will find their hateful diatribe against Disney and their support of minorities and LGBT communities. They literally state Disney is trying to eliminate girls bathrooms. Here is the full description of the proposal from the proxy statement:
When corporations take extreme positions, they destroy shareholder value by alienating large portions of their customers and investors.
This proposal provides Disney with an opportunity to move back to neutral.
From 2007 to present, Disney received a perfect score on the Human Rights Campaign (HRC)’s annual Corporate Equality Index (CEI), which can only be attained by abiding by its partisan, divisive and increasingly radical criteria.
Though HRC – which Disney has a paid partnership with – claims the CEI is just a “benchmarking tool on corporate policies… pertinent to LGBT employees,” in reality, it functions like a social credit score for corporations. The threat of a bad score is wielded against corporations to force them to do the political bidding of HRC and others (like GLSEN, the Trevor Project and GLAAD, which Disney also has paid partnerships with) that seek to sow gender confusion in children, encourage irreversible surgical procedures on confused teens, effectively eliminate girls’ and women’s sports and bathrooms, and roll back longstanding religious liberties.
Receiving a perfect score on the CEI can only mean that Disney espouses and funds those divisive positions. Because, as clearly outlined in the CEI criteria, not advancing those efforts prevents companies from receiving a perfect score, as Disney continuously has.
Disney disastrously engaged in such activism when it inserted itself in the middle of a divisive public debate over the Parental Rights in Education (Don't Say Gay) Act. And when a leaked video conference between Disney executives revealed that Disney has a “not-at-all-secret gay agenda” and was “adding queerness” to children’s programming.
Consequently, Disney stock fell 44% in 2022 – its worst performance in 50 years – amid putting this divisive agenda ahead of parental rights and political neutrality. Since then, Disney doubled down on its mistakes – the Company again earned perfect scores on the CEI the following years, which can only mean that Disney increased its partisan behavior to meet the CEI’s annually expanding criteria.
Other events made clear that shareholder value drops when companies engage is such partisanship. Bud Light’s North American revenue fell $395 million and Target’s market cap fell over $15 billion amid backlash for similar actions.
Thus, CEI participation should be reconsidered by Disney out of its fiduciary duty to shareholders.
Withdrawal from the CEI constitutes a corporate best practice because destroying shareholder value by engaging in the sort of divisiveness the CEI mandates conflicts with applicable fiduciary duties.
Recently, Lowe’s, Ford, Jack Daniels, Harley Davidson, Tractor Supply and Toyota all ended CEI participation.10 Surely, Disney’s mistakes influenced their decisions. Yet Disney itself remains committed to HRC’s divisive agenda as the stock price hasn’t recovered from its dive in 2022
Please consider the source of this proposal when voting your shares. Votes are due by March 19, 2025 11:59 PM ET