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Author: MoeBruin Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 49649  
Subject: Opposition to Iger Date: 2/14/2013 9:18 PM
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Well apparently Iger's election will have more dissent then the few nays of individual shareholders. CalSTRS the second largest pension fund in the country has announced it will vote its $5.4 million shares against Iger and the current board. Its complaint is one that it has had for along time with Disney and that is the issues regarding is Corporate Governance and pay not his performance as CEO.

For full details here is the LA Times story:
http://www.latimes.com/business/money/la-fi-mo-teachers-pens...

Moe
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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48418 of 49649
Subject: Re: Opposition to Iger Date: 2/14/2013 10:21 PM
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Disney's the one company on which I don't vote against the non-binding compensation referendum.

Fuskie
Who makes it no secret he sees Disney as different from the other companies he owns...

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Author: chk999 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48419 of 49649
Subject: Re: Opposition to Iger Date: 2/15/2013 3:50 PM
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By any rational accounting, CalSTRS is insolvent. On an actuarial basis, their liabilities greatly exceed their assets and the taxpayers of California are on the hook for the difference, which is really a lot of money.

If they told me the sun was going to rise tomorrow, I'd check.

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Author: MoeBruin Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48421 of 49649
Subject: Re: Opposition to Iger Date: 2/15/2013 7:00 PM
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By any rational accounting, CalSTRS is insolvent. On an actuarial basis, their liabilities greatly exceed their assets and the taxpayers of California are on the hook for the difference, which is really a lot of money.

What does that have to do with anything?

And even if it had anything to do with anything what makes you think that the cause of the problems is incompetent management of CalSTRS. Because if you knew anything about CA politics and the tax situation and the history of pensions in government jobs including CA you would know none of the problems are caused by mismanagement of the pension fund.

Moe

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Author: chk999 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48427 of 49649
Subject: Re: Opposition to Iger Date: 2/19/2013 1:37 PM
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As a California native, I am sadly familiar with how dysfunctional CA politics are and how badly the state is run. Also how anti-business it is. CalSTRS is not remotely blameless though. Their projections for return on their investments are much too high (at 7.5%) for a pension fund that must hold significant fixed income securities that pay very little. Here is a newspaper article with some interesting details on the problems.
http://www.ocregister.com/articles/pension-495236-state-fund...

CalSTRS should clean their own house before they go looking for trouble in other houses.

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Author: DCWD40 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48428 of 49649
Subject: Re: Opposition to Iger Date: 2/21/2013 1:18 PM
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Their projections for return on their investments are much too high (at 7.5%) for a pension fund that must hold significant fixed income securities that pay very little.

I was born and raised in So Cal so I pay attention to CA politics although I have lived outside the State since 1985. Five years ago, CalSTRS was being praised on CNBC for not having a 10% targeted return. Today, that 7.5% target is in question...

Unfunded pension liabilities are a problem that is like the Federal deficit. It gets news print but it won't get fixed until the bottom falls out.

A friend, who recently passed away, was a lifelong GMAC employee. He never thought his pension was ever going to be in trouble. How bad could a car loan be? He didn't know the final answer would be that sub-prime mortgage loans, a business that was not part of GMAC when he left, would sink the ship. Here is Wikipedia's summary of what happened to his "company."

In 2006, General Motors Corporation sold a 51% interest in GMAC to Cerberus Capital Management, a private equity company. (The next year, Cerberus acquired Chrysler Corporation.) Also in 2006, GMAC divested a majority stake of GMAC Commercial Holdings, its real estate division, to a trio of investors — Goldman Sachs, KKR and Five Mile Capital Partners — thereby creating Capmark Financial Group Inc.[6] Capmark later filed for bankruptcy and was acquired in part jointly by Leucadia and Berkshire Hathaway.

Every time the control of his division changed, he had questions. He couldn't get answers. All that was ever said was that everything was safe. After bankruptcy, there was only talk in the press of The Pension Benefit Guaranty Corporation -- a government program to shore up underfunded pension plans. When he called the "if you have questions" number on his monthly pension statement, there was a recording saying that they didn't have information after the funds future. In other words, there is not a soul to talk to when your program fails.

I find it hard to understand why politicians just let this issue go unresolved. If a company is gushing money, there is no oversight to question why an underfunded pension isn't fully funded immediately. If a company is marginally profitable, there still isn't anyone asking why the pension isn't being fully funded. Only when it fails is the question address -- in bankruptcy court. At that time, the best the employees can hope for is that the money in the fund is still there.

CalSTRS is making Disney news too:

The nation's second-largest pension fund said Thursday it will vote against the nomination of several directors at Disney's next shareholder meeting, including chairman and CEO Bob Iger.

The objection from the California State Teachers' Retirement System, or CalSTRS, is one it has raised several times before -- that one person should not be both chairman and CEO.


http://www.hollywoodreporter.com/news/giant-pension-fund-wil...

Then there is this Disney move away from the defined benefit plans:

Salaried workers hired starting next year won't be eligible for the revised pension, known as a "defined-benefit" retirement plan. Instead, they will have access to the company's 401(k) program and will receive payments from Disney in the new, defined-contribution retirement accounts.

Disney told stock analysts earlier this week that it expects the changes to save it between $350 million and $400 million over five years.

"We expect these changes will reduce our pension expense by 25 [percent to] 30 percent versus what we would have incurred under our historic program," said Jay Rasulo, Disney's senior executive vice president and chief financial officer.


http://articles.orlandosentinel.com/2011-05-12/business/os-d...

The reason for my comment earlier about GMAC is this from a 2010 Fool article:

Yet even in the favorable market environment, many companies saw some big slips from last year. Disney (NYSE: DIS ) fell from being 94% funded in 2008 to a 2009 funding level of 69%.

http://www.fool.com/retirement/general/2010/04/22/pension-pr...

So, when is it necessary to fund a pension to the level necessary to pay retirees? Why is it not while the company is making money?

In CalSTRS case, is this not a double problem? If CalSTRS is underfunded, and the companies it invests are underfunded, what happens if a second depression comes? Maybe lawmakers will react by forcing companies to fully fund their pensions (to save the government from having to fund them) thereby reducing the value of their stocks (which would hurt CalSTRS). Just a thought...

W.D.

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