Briefly read the Bloomberg news article "Disney Cuts Iger's Future Pay by Millions Before Annual Meeting" Based on the information provided above, do you think the adjustment will better mitigate the agency conflict and why?

Disney Cuts Iger's Future Pay by Millions Before Annual Meeting

Walt Disney Co., facing criticism over excessive pay packages, cut tens of millions of dollars of future potential earnings for Chief Executive Officer Bob Iger.

The move, disclosed in a regulatory filing Monday, comes days before the company's annual meeting, where investors are set to vote on the entertainment giant's executive compensation program. Disney didn't provide a reason for the planned reduction, the second change to Iger's pay in four months.

Iger's target annual compensation will be cut 28 percent to $35 million after Disney completes a deal to acquire assets from Rupert Murdoch's 21st Century Fox Inc., according to the filing. The changes don't affect more than $100 million of equity awards Iger received as part of a 2017 contract extension.

The cut precedes Disney's March 7 annual meeting, where Iger's contract was likely to face resistance from investors. Institutional Shareholder Services, the proxy-advisory firm that sells voting recommendations to asset managers, said in a Feb. 11 report that the pay program should be rejected, citing "ongoing concerns about the structure and magnitude" of Iger's annual compensation. Rival proxy advisers Glass Lewis & Co. and Egan-Jones also issued reports critical of the pay program.

"Disney's had a problem for years with pay -- they're walking this tightrope trying to keep Iger on board while figuring out the succession plan," said Robin Ferracone, CEO of Farient Advisors, a compensation-consulting firm. "Even with this change, I think they're going to have some pressure. They will continue to be scrutinized for a few years after this."

"I am proud to be leading the Walt Disney company through this important time and believe the changes I, with the board, have made are in the best interest of the company," Iger, 68, said in an emailed statement.

A year ago, more than half of all shares voted in the firm's annual say-on-pay referendumwere cast againstthe compensation program for senior managers -- a remarkable rebuke given that the vast majority of S&P 500 firms register average support of more than 90 percent. Such votes aren't binding but represent a rare vehicle for investors to publicly showcase discontent with a company's decisions.

Upon striking the deal with Fox in 2017, Disney gave Iger a contract extension to keep him on the job through 2021. The new agreement came with several lucrative provisions: It bumped the CEO's salary by 20 percent to $3 million, and included promises to boost his target bonus and long-term awards by more than 40 percent once the deal was completed.

In all, Iger's annual target compensation would have risen to $48.5 million, from roughly $32 million before the deal was announced, an increase of about 50 percent.

But after the 2018 vote, Disney's board met with many of its biggest shareholders, who voiced concerns about Iger's pay. In Monday's filing, the company disclosed that the CEO's target bonus will remain unchanged at $12 million after the deal is completed, while his long-term stock award be $20 million instead of $'25 million.

The board also scrapped a $500,000 salary increase that would have kicked in after the closing of the Fox deal. Iger is still poised to remain one of the highest-paid CEOs of a publicly traded U.S. company, according to the Bloomberg Pay Index. His $3 million base salary is more than double the average of his S&P 500 peers.

In December, Disney tweaked the performance thresholds for the grant of stock worthmore than $100 millionthat Iger was awarded as part of his 2017 contract extension. The payout is tied to the performance of Disney's stock versus other S&P 500 firms. The board raised the baseline hurdle Disney needs to exceed for the CEO to receive any shares at all, but also increased the number of shares he can get if the top goal is reached.

In its report, ISS noted that Iger's contract extension also included a block of 245,000 shares worth about $28 million that he'll collect in chunks through 2021, regardless of whether the Fox deal is completed.

"The lack of performance criteria on a significant portion of the CEO's special award is problematic, particularly when he already receives" sizable annual grants of equity, ISS said.