November 27, 2020

Media Decoder Blog: Disney Shareholders Endorse Pay of Chief Executive

LOS ANGELES – As expected, two shareholder resolutions challenging how the Walt Disney Company is managed were defeated on Wednesday at the entertainment conglomerate’s annual meeting in Phoenix.

At the same time, slightly more Disney shareholders supported the company in a federally required say-on-pay test, in which executive compensation is put to a vote. About 57.6 percent of shareholders supported Disney’s pay package for Robert A. Iger, chairman and chief executive, up from 56.9 percent last year.

Mr. Iger’s pay for 2012 totaled $40.2 million, a 20 percent increase from a year earlier. His compensation is largely tied to Disney’s financial performance; profit soared 18 percent last year, to $5.7 billion.

Because of its high profile, Disney is a routine target for shareholder advocates. But the company’s strong performance recently made this year’s push a difficult one. A proposal to allow some stock owners to nominate board candidates failed with only 39.8 percent of voters supporting it.

The more controversial proposal involved forcing the company to prevent future chief executives from also holding the title of board chairman. Mr. Iger has held both top jobs since last March. This proposal only received support from 35.2 percent of shareholders, despite media reports in recent weeks that Mr. Iger was under fire.

Speaking during the comment section of the meeting, Roy P. Disney, the grandson of the company’s co-founder, took aim at shareholder advocates. “It’s unfortunate that this company should be used as a podium” for those seeking to make a point about corporate governance, he said.

All 10 members of Disney’s board were also re-elected.

As part of the meeting, Mr. Iger showed a model of the castle planned as the centerpiece of a sprawling new theme park resort under construction in Shanghai. The Enchanted Storybook Castle, as Disney called it, is by far the largest featured at any Disney park and looked a smidge like the Hogwarts castle from the Harry Potter movies.

In one of the gathering’s livelier moments, a shareholder identifying himself as Dwight Morgan complained about Disney for the first time opening a Starbucks inside the Disneyland Resort in California; in particular Mr. Morgan was concerned about the role potentially played by Orin C. Smith, a Disney board member and the retired chief executive of Starbucks.

“I’ve heard nothing but bad comments,” Mr. Morgan said.

Mr. Iger responded that the deal was independently vetted and came after years of guest complaints about the quality of Disney’s coffee. “I don’t mean to be cheeky,” Mr. Iger said, “but that has become one of the most popular Starbucks in the country, and we’re going to add more.”

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Advertising: In Ads for Sun Valley Resort, the Softest of Sells

The films are in the form of online video clips that are part of the trend known as branded entertainment: content with a sponsored point of view, in this instance encouraging visits to the Sun Valley Resort in Idaho, which was the setting of the movie “Sun Valley Serenade” in 1941.

The videos are the centerpiece of a campaign that the upscale resort, now owned by R. Earl Holding, and its ally, the Sun Valley Marketing Alliance, began last week. The campaign, with a budget estimated at $500,000, is being created by an agency in San Francisco named Eleven.

Computer users will be able to watch the video clips in several places, among them on the resort’s Web site,; the Web site of the marketing alliance, at; and the Sun Valley fan page on Facebook, at

Shorter versions of the videos will run as commercials in movie theaters in markets like Los Angeles, Seattle and Boise, Idaho.

The campaign also includes video ad banners, video and flash ad banners on Web sites like and as well as ads in newspapers and magazines — all directing consumers to the videos.

Each video, which runs around a minute and a half to two-and-a-half minutes, features employees of the resort and residents of Sun Valley. They include a member of the ski patrol, the coach of the local snowboard team and members of the Sun Valley Suns, a club hockey team.


The videos are low-key paeans to Sun Valley, offering the softest of soft sells. They shine a spotlight on the attractions of the resort, but are also focused on a quality that is increasingly being celebrated in campaigns for products and services with a past: authenticity. That is underlined by the theme of the campaign, which declares Sun Valley to be “the original mountain town.”

The idea behind appeals centered on authenticity is that in unsettled times, consumers value what seems genuine rather than the calculated result of marketing hyperbole. Brands as disparate as Chevrolet, Coca-Cola, Levi’s jeans and Tiffany are playing up authenticity in their pitches.

It is a tricky task because authenticity is like modesty: It loses its charm if talked about too much.

“The good news and the bad news is that it’s a very special place,” said Tim Silva, the general manager of Sun Valley Resort who is also a member of the board of the marketing alliance.

“To keep that specialness yet still make it relevant to another generation, is the challenge,” he added.

Mr. Silva praised the resort’s “unique beauty,” but also acknowledged that it was “not for everyone” and “somewhat remote.”

“Once you get there, it’s wonderful,” he said, adding, “You need to want to be there.”

The videos are meant to “reveal something about the community,” Mr. Silva said, by providing “an insight into the nature of the area, this authenticity.”

“We still very much try and curate” the history of Sun Valley, he added, which includes “Sun Valley Serenade,” with a cast that featured the skater Sonja Henie and the Glenn Miller big band.

At the same time, Mr. Silva said, “we try to not have” the history “be the only thing relevant about the resort.”

“The art of it,” he added, is “to make it part of the overall heritage.”


For instance, in the video about the member of the ski patrol, Ashley Brown, Ms. Brown calls Sun Valley “one of the only ski resorts still attached to a small town.”

In the video about the snowboard coach, Andy Gilbert, Mr. Gilbert talks about how people might say of Sun Valley, “Oh, I went on vacation with my parents there once.”

Mr. Gilbert says he responds that “it’s still a pretty amazing place to be, and it’s not like anywhere else in the U.S., as far as I’m concerned.”

Eleven was familiar to Mr. Silva because he worked with the agency at his previous job before Sun Valley, when he was the general manager of a Lake Tahoe resort.

“I find Sun Valley to be one of the more difficult marketing challenges I’ve faced,” said Courtney Buechert, chief executive at Eleven.

“The place needs to be introduced to a new generation of people, but it is such a distinctive experience,” he added. “If you invite the wrong people, they won’t have a good time, and they’ll change it, and they’ll ruin it.”

The answer, Mr. Buechert said, is to “introduce people to Sun Valley on the appropriate terms,” with “the least amount of marketing artifice around it.” So there were no scripts for the videos, he added, nor were those appearing in them briefed.

The online films are meant to elicit a response like “Oh, wow, sweet,” Mr. Buechert said, and those who say that are told, “Take a step forward.”

Those who react to the videos by saying, “It sounds a little poky; where’s the action at?” he added, are told: “You know what? You should go to Vail, you should go to Whistler.”

Plans call for the campaign to continue with additional videos on subjects like Sun Valley in the summertime.

Backbone Media in Carbondale, Colo., is also working on the campaign, handling media duties, social media and public relations.

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DealBook: Details Emerge on Draft of Volcker Rule Proposal

Jung Yeon-Je/Agence France-Presse — Getty ImagesThe Volcker Rule was championed by Paul A. Volcker, the former Federal Reserve chairman.

Federal regulators are planning to vote next week on plans to prohibit banks from making certain lucrative, yet risky trades, the latest step toward reining in risk-taking on Wall Street in the aftermath of the financial crisis.

As the Federal Deposit Insurance Corporation prepares Tuesday to vote on the so-called Volcker Rule, some clues have emerged on the details of the proposal. The American Banker on Wednesday published a document on its Web site that appeared to be the latest version of the proposed rules. The proposal spelled out the scope of the rule’s ban on proprietary trading — and its broad exemptions for more routine business practices that can be mistaken for riskier trades.

But the 205-page draft proposal, dated Sept. 30 and labeled confidential, left many details to be developed in coming months. Indeed, the draft posed dozens of questions for the public and the financial industry to address, leaving the window open for significant changes.

People close to the rulemaking cautioned late Wednesday that regulators could even make adjustments to the rule over the next week, before the F.D.I.C. votes on Tuesday. And three other federal agencies must also vote on the proposal for it to advance into a public comment period that will end in December.

Still, the F.D.I.C.’s vote will start what is sure to be a long fight over the minutiae of the Volcker Rule, a centerpiece of the Dodd-Frank financial regulatory overhaul and one of the law’s most contentious provisions. Major banks have railed against the rule, saying it will eat into profits without making the financial system much safer. Many lawmakers, however, see the rule as a way to prevent future bailouts of Wall Street, which nearly collapsed during the financial crisis.

Named after Paul A. Volcker, the former Federal Reserve chairman who championed the rule as part of Dodd-Frank, it would order banks to limit their investments in hedge funds and private equity shops. More significant, the Volcker Rule would prohibit federally insured banks from trading for their own benefit rather than for clients, a strategy known as proprietary trading. The rule, Mr. Volcker and Democratic lawmakers say, will prevent banks from using their own capital to place bets while the government guarantees their deposits.

“Financial firms have been engaged in high-risk high-jinks that have threatened the U.S. and worldwide economy and economic recovery,” Senator Carl Levin, the Democrat from Michigan who co-sponsored the Volcker Rule in Congress, said on Wednesday. “The Volcker Rule is essential to protect taxpayers from banks’ excessive financial risk-taking, conflicts of interest, and from the resulting billion-dollar bailouts. I look forward to reviewing the proposed rule and hope the regulators reject efforts to weaken the law.”

Banks have spent more than a year preparing for life under the Volcker Rule. Goldman Sachs was among the first major Wall Street firm to close its proprietary trading desk. JPMorgan Chase and Citigroup announced similar plans to spin off their desks, and Bank of America declared over the summer that its proprietary trading operation had closed.

But truly banning proprietary trading will take more than closing a few trading desks. The Volcker Rule exists in a gray area, where the line is often blurred between when a trade is proprietary or part of a bank’s routine market-making activity, which can include buying securities with an eye toward later selling them to clients.

Dodd-Frank provides several exemptions from the ban, including underwriting, hedging and market making. The draft proposal that emerged on Wednesday would exempt even more varieties of hedging than originally expected. This summer, noting the difficulty in detecting proprietary trading, a Government Accountability Office report painted the Volcker Rule as cumbersome and tough to enforce. At the time, Mr. Levin called the G.A.O. report “woefully incomplete.”

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Advertising: Banana Republic Reaches Back to the ’60s for That ‘Mad Men’ Look

The Banana Republic unit of Gap Inc., which has teamed up previously with “Mad Men” for marketing promotions, is doing so again this summer with what will be their most extensive joint effort to date. The centerpiece of the new promotion is a collection of men’s and women’s fashions, to be sold in Banana Republic stores and online, based on how the characters on “Mad Men” look.

There will be 65 items in the so-called capsule collection, which are to carry co-branded labels bearing the logos of “Mad Men” and Banana Republic. The merchandise is to be priced the same as similar regular items sold in Banana Republic stores and on

The clothing and accessories like suits, dresses, ties, sweaters, hats, skirts, coats and blouses are influenced by “Mad Men,” which takes place in the 1960s. But they are intended to reflect the sensibilities — and the fit requirements — of contemporary shoppers.

The “Mad Men” collection is to come out in August, when the AMC cable channel was expected to be presenting episodes of the show’s fifth season. (The first four seasons made their debuts from summer 2007 through summer 2010.) However, a dispute between AMC and Matthew Weiner, the creator of the series, has delayed Season 5 until early 2012.


Executives of Banana Republic and Janie Bryant — the Emmy Award-winning costume designer of “Mad Men,” who is working with them on the merchandise — said they did not believe the absence of the series from TV would damp interest in the collection.

“It’s not that big of a deal,” said Jack Calhoun, president of Banana Republic, because “ ‘Mad Men’ continues to be relevant whether it’s on the air or not.”

Ms. Bryant said she was “getting messages on Facebook and Twitter that say, ‘We’re so excited about Season 5, but we’re watching all the seasons before Season 5 again.’ ”

Until the show returns, “they can get their fix with the clothing,” she added, laughing.

Brooks Brothers has sold a suit inspired by “Mad Men,” which was designed by Ms. Bryant. She collaborated last fall with Nailtini on four nail polishes with “Mad Men” monikers like Bourbon Satin.

Both Bloomingdale’s and Banana Republic have featured “Mad Men” in their store windows. Banana Republic has also offered customers style guides to dressing like “Mad Men” characters, a series of online video clips titled “Mad About Style” and contests to win walk-on parts on the series.


“Mad Men” mania does not seem to be played out, even after four years, said Tom Julian, a brand consultant and style expert who is the president of the Tom Julian Group.

“At the consumer level, it still has a lot of legs,” Mr. Julian said. “People know what you mean when you say ‘the “Mad Men” look’: a two-button, trim suit, a crisp shirt and a pocket square, the mod look of the ’60s.”

For Banana Republic to use the promotion to persuade “men and women to get dressed up for the fall is very easy to imagine,” he added.

The collection was the brainchild of Ms. Bryant and Simon Kneen, creative director at Banana Republic, who collaborated on the retailer’s previous promotions with the series.

“It wasn’t planned at all,” Mr. Kneen said, but grew from the fact “we got on so well.”

“We’d talk for hours about white shirts,” he added.

Ms. Bryant said she and Mr. Kneen worked on the collection for the last year, adding: “A lot of the pieces I brought to Simon and the design team were pieces from the show, some I designed, some vintage. A dress my grandmother made is an inspiration for a beautiful, beautiful dress.”

Ms. Bryant and Mr. Kneen will return for another round of “Mad About Style” webisodes, which will be on the Banana Republic Facebook page, at, and a section of the AMC Web site, at

The collection will be promoted in print, outdoor and online advertising; through direct mail; in stores; and through social media. For instance, fans of Banana Republic on Facebook are to get early access to a presale of the collection on Aug. 10, a day before it is scheduled to be available in stores and on the Banana Republic Web site.

There are also plans to repeat the contest to win a walk-on role on “Mad Men,” co-sponsored by Banana Republic and AMC. Information will be provided at


In addition to inspiring shoppers and retailers, “Mad Men” is being credited with giving two networks ideas for series for the 2011-12 season that are set in the ’60s. One, “Pan Am,” will be on ABC, and the other, “The Playboy Club,” on NBC.

Would Banana Republic consider offering clothing based on either or both?

Although a ’60s vibe is “in the air,” Mr. Calhoun said, he wondered if those newcomers would be “too much of a clone,” noting that the Playboy Club in New York City figured in the plot of the fourth season of “Mad Men.”

“Another tie-in would have to be a perfect fit,” he added. “ ‘Mad Men’ was a perfect fit.”

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Media Cache: While in France, Watch What You Download

PARIS — More than 800 members of the global digerati are to gather this week in Paris, at the invitation of President Nicolas Sarkozy, to discuss the future of the Internet. Here are a few tips for participants in the so-called E-G8 Forum.

Travel light
It has been warm and dry in Paris this spring, and the forecast calls for more of the same.

Watch what you download
France, remember, recently enacted a law to crack down on digital piracy of music and movies, the centerpiece of Mr. Sarkozy’s efforts to help content creators and copyright owners get remunerated for their work. Under the law, repeat offenders face the threat of a suspension of their Internet access.

Or do they? How is the so-called three strikes system actually performing? Do those attending E-G8 have anything to fear?

Not during the two days of the forum — that much is clear. Last week, after a data leak had been discovered, the government agency enforcing the law said it had temporarily severed its connection with the company supplying it with details about alleged offenders.

The French data protection authority, CNIL, said it was investigating the breach at the company, Trident Media Guard, which works on behalf of content owners, rather than the agency, called Hadopi. The findings will not be known for several weeks.

Not to worry, Hadopi said. It still has plenty of dossiers to process in the meantime and will keep sending out warnings to those suspected of sharing files illegally.

What of the Internet users who have already heard from Hadopi? The agency says it has sent out tens of thousands of admonishments via e-mail and, in some cases, is moving on to a second warning, by registered mail.

There are tentative signs that this may be working. In a survey published this month by Hadopi, 7 percent of French Internet users said they had received a warning or knew someone who had. Seventy-two percent of the recipients said they had stopped or reduced their illegal file-sharing activity as a result.

So far, however, this does not seem to have translated into a turnaround for the ailing recorded music industry. The industry’s French trade association says sales in the first quarter fell 5 percent. While digital sales rose 13 percent, to a modest €26 million, or $37 million, CD sales continued to fall.

Meanwhile Hadopi is broadening its educational role by reviewing applications from digital music services for labels certifying that their offerings are legal. When this is complete, the agency wants to set up a Web site providing links to approved services.

But the data protection agency recently criticized Hadopi for delays in meeting one requirement of the law: that it detail the ways in which Internet users can secure their private networks against illegal file sharing. As long as such software is unavailable, it could be difficult for the agency to secure court orders to execute the third of three strikes, which would cut off Internet access.

It is not even clear that Mr. Sarkozy wants things to advance to that stage.

In a speech last month when he introduced a new agency called the National Digital Council, which will advise the government on technological matters, Mr. Sarkozy let it slip that he thought Hadopi was an “imperfect solution,” rather than “an end in itself.” He even appeared to suggest that he would consider ditching Hadopi if Internet companies found fair ways to remunerate content creators.

The Élysée Palace quickly went into damage-control mode, expressing Mr. Sarkozy’s “full support” for Hadopi.

“Neither the merits of Hadopi’s actions nor the need for a determined fight against piracy have been cast into doubt by the president of the republic,” it said in a statement.

So we repeat: Watch what you download. This is your second warning. And, on second thought, a raincoat is never a bad idea in Paris.

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