All work, no pay for laborers

They waited in line for hours, then they were subjected to "four parts entertainment and glitz to one part business," as one observer puts it. It's all par for the course for the vaunted "Disney experience."

The event was Disney's annual shareholders' meeting, held Tuesday, Feb. 23, at the Fifth Avenue Theater in Seattle. Disney CEO Michael Eisner gave a tech-heavy speech praising the company's new Internet portal, part of a strategy to cash in on Wall Street's online mania. As usual, the meeting was played up by the news media as a big event. But not everyone thought so. And a lack of support for improving the treatment of foreign contract workers means the resolution won't get on the ballot next year.

"It was probably more of a nonevent," says Kent Poindexter, a pension-fund manager for the United Methodist Church who has previously spearheaded shareholder resolutions about bettering the conditions of foreign workers and whose fund has invested in Disney stock.

Shareholder resolutions have been a thorn in Disney management's side for the past three years, although their popularity was fueled more by anger over the $130 million Michael Ovitz severance than revelations that the company paid its Haitian seamstresses 28 cents an hour.

Resolutions proposed by so-called "outside" shareholders have little chance of passing. They're meant to raise issues not normally considered by the bottom-line boardroom types.

Securities and Exchange Commission (SEC) rules require shareholder resolutions to get at least 3 percent of the votes cast in order to stay on the ballot for a second year. The bar is raised to 6 percent the next year, and 10 percent the third.

This was the third year for a series of resolutions designed to aid Third World workers, whose production of toys and clothing often takes place in sweatshop conditions. Activists want Disney and other U.S. retailers to allow independent, local groups to monitor the factories and report their findings to both shareholders and consumers. They also want the companies to pay a living wage to all workers, including contract workers.

Disney has resisted these requests, although the company and church have been negotiating what Poindexter calls "the worker issue" for the past year. Disney is concerned that independent monitors may be biased against the company, and that the definition of "living wage" will be hard to determine.

So far, "We're in agreement about education, standards and policies," says Poindexter. The church currently has a researcher working on a living-wage definition.

The resolution was endorsed by just over 8 percent of the shareholder votes cast this year, down slightly from the 8.5 percent it got last year. That means, according to the SEC regulations, it won't be brought back for shareholder consideration next year.

The Rev. David Schilling, director of the global corporate accountability programs for the Interfaith Center on Corporate Responsibility, offers some reasons why the resolution hasn't caught on.

"It takes a while for these things to warm up," Schilling says. "Many `investor` institutions don't even have a strategy for voting proxy. `They` just vote with the company." In other words, institutions such as pension funds, which are required to maximize investor return, simply follow Disney's recommendations when it comes to resolutions. These institutions need to be convinced that sweatshop-labor issues will start affecting stock prices.

Activists have tried to build alliances with Disney labor unions, including the National Association of Broadcast Electrical Technicians, whose 2,000 camera and equipment operators were locked out of their jobs at ABC for 74 days last fall. Some later signed a contract with the company; most are working without a contract.

"They did present a shareholder resolution, says Poindexter. "We supported their concerns, but we haven't seen any reciprocal support."