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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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January 11, 2019

Dear Fellow Shareholder,

I am pleased to invite you to our 2019 Annual Meeting of shareholders, which will be held on Thursday, March 7, 2019, at 10 a.m. at the Stifel Theatre in St. Louis, Missouri.

At the meeting, we will be electing nine members of our Board of Directors. We will also be considering ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accountants, an advisory vote to approve executive compensation, and two shareholder proposals.

You may vote your shares using the Internet or the telephone by following the instructions on page 70 of the proxy statement. Of course, you may also vote by returning a proxy card or voting instruction form if you received a paper copy of this proxy statement.

If you wish to attend the meeting in person, you will need to obtain an admission ticket in advance. You can obtain a ticket by following the instructions on page 71 of the proxy statement. If you cannot attend the meeting, you can still listen to the meeting, which will be webcast and available on our Investor Relations website.

Thank you very much for your continued interest in The Walt Disney Company.

Sincerely,

Robert A. Iger
Chairman and Chief Executive Officer

   

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​  The Walt Disney Company   Notice of 2018 Annual Meeting

The 2019 Annual Meeting of shareholders of The Walt Disney Company will be held:

Thursday, March 7, 2019
10:00 a.m. Local Time
The Stifel Theatre
1400 Market Street
St. Louis, Missouri 63103

The items of business are:

1.

Election of the nine nominees named in the proxy statement as Directors, each for a term of one year.

2.

Ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accountants for fiscal 2019.

3.

Consideration of an advisory vote to approve executive compensation.

4.

Consideration of up to two shareholder proposals, if presented.

Shareholders of record of Disney common stock (NYSE: DIS) at the close of business on January 7, 2019, are entitled to vote at the meeting and any postponements or adjournments of the meeting. A list of these shareholders is available at the offices of the Company in Burbank, California.

As previously announced, Disney has entered into an Amended and Restated Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 20, 2018, among Disney, Twenty-First Century Fox, Inc., TWDC Holdco 613 Corp. ("New Disney"), WDC Merger Enterprises I, Inc., and WDC Merger Enterprises II, Inc. Subject to the terms and conditions set forth in the Merger Agreement, Disney will, upon closing of the transactions contemplated by the Merger Agreement, become a wholly-owned subsidiary of New Disney. If the transactions close prior to March 7, 2019, the meeting held on March 7, 2019 will be the 2019 Annual Meeting of shareholders of New Disney and this notice of meeting will be deemed to have been provided in respect of the 2019 Annual Meeting of shareholders of New Disney. In such case, shareholders of Disney as of the Record Date will be entitled to attend the 2019 Annual Meeting of shareholders of New Disney, and votes cast by shareholders of Disney in proxy or in person will constitute instructions to Disney (as the sole shareholder of New Disney as of the Record Date) to vote its shares of New Disney at the meeting. Disney will in that case vote its shares of New Disney in proportion to the votes cast by Disney shareholders.

The closing of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement and there can be no assurance as to when or if the transactions will close.

January 11, 2019
Burbank, California

Alan N. Braverman
Senior Executive Vice President,
General Counsel and Secretary

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on March 7, 2019

The proxy statement and annual report to shareholders and the means to vote by Internet are available at www.ProxyVote.com/Disney.

Your Vote is Important

Please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning the Proxy Card mailed to those who receive paper copies of this proxy statement.

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The Walt Disney Company Notice of 2019 Annual Meeting and Proxy Statement

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​  Proxy Summary

Proposals to be Voted On

The following proposals will be voted on at the Annual Meeting of shareholders.

You may cast your vote in any of the following ways:

Attendance at the Meeting

   

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​  Proxy Summary

This summary provides highlights of certain information in this proxy statement. As it is only a summary, please review the complete proxy statement and 2018 annual report before you vote.

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​ The Walt Disney Company Notice of 2019 Annual Meeting and Proxy Statement      1

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​ The Walt Disney Company Notice of 2019 Annual Meeting and Proxy Statement      3

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Over the course of his tenure as Chief Executive Officer, Mr. Iger has delivered spectacular financial performance and created significant shareholder value, driven by key strategic moves and exceptional execution.

Since fiscal 2005, Disney has achieved exceptional financial performance highlighted by:

•

13% compounded annual growth in income from continuing operations attributable to Disney (12% adjusted for the non-recurring impact of tax reform and gains from real estate sales in fiscal 2018):

  
    

Income from Continuing Operations Attributable to Disney

    

*

For a reconciliation of income from continuing operations attributable to Disney to income from continuing operations attributable to Disney excluding the non-recurring impact of tax reform and gains from real estate sales, see Annex A.

  
    

•

16% compounded annual growth in EPS (15% adjusted for the non-recurring impact of tax reform and gains from real estate sales in fiscal 2018):

EPS (Reported)

    

*

For a reconciliation of EPS to EPS excluding the non-recurring impact of tax reform and gains from real estate sales for 2018, see Annex A.

•

485% increase in total shareholder return:

Total Shareholder Return

•

This marked significant outperformance relative to the S&P 500 and Media Industry Peers, whose total returns increased 212% and 259% respectively, over this period:

Total Shareholder Return



*

Market cap-weighted TSR for The Walt Disney Company, CBS, 21st Century Fox, Viacom and Comcast. Time Warner is excluded due to its acquisition by AT&T during 2018.

  
    

Against the backdrop of this track record of consistent strong performance, the Compensation Committee made the following decisions with respect to Mr. Iger's annual compensation for fiscal 2018.

Salary: The Compensation Committee raised Mr. Iger's annual salary from $2.5 million to $3.0 million in connection with his contract extension. Base salary remains only 7% of Mr. Iger's total annual compensation (i.e., excluding the equity award associated with extension of his employment agreement), in-line with last year.

Annual Equity Awards: The Compensation Committee left the value of Mr. Iger's annual equity award for fiscal 2018 approximately equal to the values for the last six fiscal years. Half of the equity award is in the form of performance-based stock units and half is in the form of stock options.

Non-Equity Incentive Plan Compensation: Mr. Iger's performance-based cash bonus of $18.0 million (compared to $15.2 million for fiscal 2017) reflects performance against the four financial performance measures and qualitative goals as discussed below:

•

Financial Performance Measures:  The Compensation Committee sets performance ranges for the four financial performance measures that are used to determine 70% of each named executive officer's bonus award early in the fiscal year. In establishing these ranges for fiscal 2018, the Committee increased the overall level of the ranges for adjusted EPS and adjusted after-tax free cash flow to provide incentives for overall growth. The Committee recognized the significant capital investments in BAMTech and Parks and Resorts, and therefore reduced the overall level of the ranges for adjusted segment operating income and adjusted return on invested capital.

This performance resulted in performance factors that ranged from 133% to 146% across the four measures, and the weighted average of the four financial performance factors was 139%.

  
    

Financial Performance Metrics — Growth

    

In comparing actual performance for fiscal 2018 to the performance ranges, the Compensation Committee adjusted for the impacts of: recurring and non-recurring tax-reform benefits recorded in fiscal 2018, gains on the sale of real estate and property rights, restructuring and impairment charges, a one-time $1,000 employee bonus, expenses related to the 21CF Acquisition, expenses related to content development for direct-to-consumer streaming services and

  
    

foregone revenue from content licensing attributable to the revised distribution strategy.

•

Other Performance Factor:  In setting the other performance factor for Mr. Iger, the Compensation Committee considered Mr. Iger's outstanding leadership in developing the strategic direction of the Company, highlighted by the pending 21CF Acquisition, the development of a direct-to-consumer strategy and the related reorganization of the Company, as well as outstanding studio performance, the successful launch of ESPN+, and record operating results at our parks and resorts. Taking all this into account, the Compensation Committee applied a factor of 175% for Mr. Iger's qualitative performance in fiscal 2018.

The achievement of strong financial performance while executing transformative strategic change for future growth led the Committee to increase Mr. Iger's incentive bonus award by $2.8 million compared to the award in fiscal 2017. Despite this increase, Mr. Iger's 2018 bonus is well below the level he received in the three years prior to fiscal 2017, in both dollar amount and relative to adjusted EPS and adjusted segment operating income, as illustrated below.

CEO Incentive Bonus Award vs. Adjusted EPS, Last Five Years

*

Adjusted EPS is EPS as adjusted by the Compensation Committee for purposes of determining compensation. For fiscal 2018, the adjustments are those described above under "Financial Performance Measures." For fiscal 2014 through 2017, the adjustments are those described in the proxy statements for the 2015 through 2018 annual meetings.

  
    

CEO Incentive Bonus Award vs. Adjusted Segment Operating Income, Last Five Years



*

Adjusted Segment Operating Income is Segment Operating Income as adjusted by the Compensation Committee for purposes of determining compensation. For fiscal 2018, the adjustments are those described above under "Financial Performance Measures." For fiscal 2014 through 2017, the adjustments are those described in the proxy statements for the 2015 through 2018 annual meetings.

The Committee believes Mr. Iger's annual compensation in fiscal 2018 continues to reflect the rigor of its pay for performance orientation, as demonstrated by a comparison of the Company's performance and Mr. Iger's annual compensation over the last five years. As shown below, the Company's adjusted EPS grew at a compound annual growth rate of 11% from fiscal 2014 to fiscal 2018 and adjusted segment operating income grew 5% over the period. Despite this growth, Mr. Iger's incentive bonus award decreased 6% and his total annual compensation decreased 4% on a compounded basis over this period.

Additional details on our compensation program and fiscal 2018 compensation can be found in the Executive Compensation section of this proxy statement beginning on page 21.

Taking into account the investor feedback received in connection with the vote on the advisory resolution on executive compensation at the 2018 annual shareholder meeting, the Board acting on the recommendation of the Compensation Committee approved, and Mr. Iger agreed to, several changes to the performance-based units awarded to Mr. Iger in December 2017. The changes to the award are as follows:

•

Reduced threshold pay at the 25th percentile to zero — Previously, 50% of the target number of units subject to the award would have vested if the Company's TSR through the end of the performance period was at the 25th percentile of TSRs for the companies in the S&P 500. As revised, none of the shares will vest if the Company's relative TSR is at the 25th percentile.

•

Increased target performance from the 50th to the 65th percentile of peers — Previously, the target number of units subject to the award would have vested if the Company's TSR was at the 50th percentile relative to the TSR of other companies in the S&P 500; as revised, the Company's TSR must be at the 65th percentile of the S&P 500 for the target number of units to vest.

•

Reduced the cap at the 75th percentile — Previously, Mr. Iger could earn 150% of the target number of units at the 75th percentile; as revised, the award is capped at a 125% payout at the 75th percentile.

•

Held target value constant — In light of the more challenging performance criteria, the value of the award would have decreased absent an increase in the target number of units. To maintain the value of the award as of the date it was granted, the target number of units subject to the award was increased to 937,599 units.

•

Limitation on award for negative TSR — If the Company's absolute TSR over the performance period is negative, no more than 100% of the target number of units would vest, even if relative TSR performance exceeded the 65th percentile.

•

Decreased earning opportunity below the 60th percentile — Despite the increase in the number of target units, at every point on the curve below the 60.5th percentile, fewer shares will vest than under the original agreement.

The following chart illustrates the shift in the number of units that would vest at every level of relative TSR performance (assuming that absolute TSR performance is positive).

        

   
    

In addition to these changes to the performance-based units awarded in December 2017, the Board approved, and Mr. Iger agreed to, cap the future performance-based award payouts to 100% of target if the Company's absolute TSR is negative.

   
    

In this year's proxy statement, you will find two shareholder proposals, one seeking additional disclosure regarding lobbying expenses and one seeking a report on cyber security and data privacy.

•

Lobbying Disclosure:  The proposal requests the Company to provide additional disclosure regarding its political activities, including information regarding its lobbying activities. The Company already provides substantial disclosure regarding our political activities, and the additional requested disclosure would exceed that provided by many other companies, putting the Company at a disadvantage without providing meaningful new information to shareholders. The Board therefore recommends that you vote against this proposal.

•

Report on Cyber Security and Data Privacy Compensation Metrics:  The proposal requests the Company to publish a report assessing the feasibility of integrating additional cyber security and data privacy metrics into the performance measures of senior executives under the Company's compensation incentive plans. Our compensation program for senior executives already considers cyber security and data privacy for executives with responsibility in this area in evaluating non-financial performance factors in setting individual incentive bonus awards. Accordingly, the Board recommends that you vote against this proposal because it is unnecessary and would not promote enhanced protection of data security and data privacy.

You can read our detailed positions on these proposals on pages 66 to 69 of the proxy statement.

The Board of Directors has adopted Corporate Governance Guidelines, which set forth a flexible framework within which the Board, assisted by its committees, directs the affairs of the Company. The Guidelines address, among other things, the composition and functions of the Board of Directors, director independence, stock ownership by and compensation of Directors, management succession and review, Board leadership, Board committees and selection of new Directors.

The Company has Standards of Business Conduct, which are applicable to all employees of the Company, including the principal executive officer, the principal financial officer and the principal accounting officer. The Board has a separate Code of Business Conduct and Ethics for Directors, which contains provisions specifically applicable to Directors.

Each Committee on the Board of Directors is governed by a charter adopted by the Board of Directors.

The Corporate Governance Guidelines, the Standards of Business Conduct, the Code of Business Conduct and Ethics for Directors and each of the Committee charters are available on the Company's Investor Relations website under the "Corporate Governance" heading at www.disney.com/investors and in print to any shareholder who requests them from the Company's Secretary. If the Company amends or waives the Code of Business Conduct and Ethics for Directors or the Standards of Business Conduct with respect to the principal executive officer, principal financial officer or principal accounting officer, it will post the amendment or waiver at the same location on its website.

The current members of the Board of Directors are:

The Board met nine times during fiscal 2018. Each current Director attended at least 75% of all of the meetings of the Board and committees on which he or

she served that occurred while he or she served on the Board or the committees. All continuing directors holding office at the time attended the Company's 2018 annual shareholders meeting. Under the Company's Corporate Governance Guidelines, each Director is expected to dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties, including by attending meetings of the shareholders of the Company, and meetings of the Board and committees of which he or she is a member.

The Company's Corporate Governance Guidelines specify that the Chairman of the Board shall in the normal course be an independent Director, unless the Board determines that, in light of the circumstances then present when any such decision is made, a different structure would better serve the best interests of the shareholders. The Guidelines also provide that the Board will disclose in each proxy statement the reasons for a different arrangement and appoint an independent Director as Lead Director with duties and responsibilities detailed in the Corporate Governance Guidelines.

Mr. Iger has served as Chairman since March of 2012, when he assumed that position upon the retirement of John Pepper who had previously served as Chairman. In making Mr. Iger Chairman, the Board determined that doing so would promote a number of important objectives: it would add a substantial strategic perspective to the Chair position and put in place an effective plan for the future transition of leadership while at the same time providing important continuity to Board leadership. In making these judgments, the Board took

into account its evaluation of Mr. Iger's performance as Chief Executive Officer and President, his very positive relationships with the other members of the Board of Directors and the strategic vision and perspective he would bring to the position of Chairman. The Board was uniformly of the view that Mr. Iger would provide excellent leadership of the Board in the performance of its duties and that naming him as Chairman would serve the best interests of shareholders.

Mr. Iger's employment agreement provides that he will serve as Chief Executive Officer and Chairman through the end of its term. Each year, the independent members of the Board determine whether to elect Mr. Iger Chairman in accordance with the employment agreement. In doing so, the Board considers whether Mr. Iger's continuing to serve as both Chairman and Chief Executive Officer would be in the best interests of shareholders. Based on the demonstrated success of this structure to date, both in terms of the functioning of the Board and the growth of the Company, and the continued benefits of retaining Mr. Iger's strategic perspective in the position of Chairman, the Board has concluded that Mr. Iger's continuing service as Chairman remains in the best interests of shareholders and that, absent an unexpected change in circumstances, he should continue to serve in the role through the term of his agreement.

At the time Mr. Iger became Chairman, the Board elected an independent Lead Director. The duties of the independent Lead Director were expanded in connection with the appointment of Mr. Iger as Chairman, and were further expanded in 2013 based on feedback from investors regarding Lead Director duties. Susan Arnold was elected independent Lead

Director in March 2018. The duties of the Lead Director are as follows:

•

Preside at all meetings of the Board of Directors at which the Chairman is not present, including executive sessions of non-management or independent Directors;

•

Call meetings of the independent or non-management Directors;

•

Serve as liaison between the Chairman and the independent and non-management Directors;

•

Advise as to the scope, quality, quantity and timeliness of information sent to the Board of Directors;

•

In collaboration with the Chief Executive Officer and Chairman, and with input from other members of the Board, develop and have final authority to approve meeting agendas for the Board of Directors, including assurance that there is sufficient time for discussion of all agenda items;

•

Organize and lead the Board's annual evaluation of the Chief Executive Officer;

•

Be responsible for leading the Board's annual self-assessment;

•

Be available for consultation and direct communication upon the reasonable request of major shareholders;

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Advise Committee Chairs with respect to agendas and information needs relating to Committee meetings;

•

Provide advice with respect to the selection of Committee Chairs; and

•

Perform such other duties as the Board may from time to time delegate to assist the Board in the fulfillment of its responsibilities.

The Board of Directors has four standing committees: Audit, Governance and Nominating, Compensation and

Executive. Information regarding these committees is provided below.

As noted in the Company's Corporate Governance Guidelines, the Board, acting directly or through committees, is responsible for "assessing major risk factors relating to the Company and its performance" and "reviewing measures to address and mitigate such risks." In discharging this responsibility, the Board, either directly or through committees, assesses both (a) risks that relate to the key economic and market assumptions that inform the Company's business plans (including significant transactions) and growth strategies and (b) significant operational risks related to the conduct of the Company's day-to-day operations.

Risks relating to the market and economic assumptions that inform the Company's business plans and growth strategies are specifically addressed with respect to each business unit in connection with the Board's review of the Company's five-year plan. The Board also has the opportunity to address such risks at each Board meeting in connection with its regular review of significant business and financial developments. The Board reviews risks arising out of specific significant transactions when these transactions are presented to the Board for review or approval.

Significant operational risks that relate to on-going business operations are the subject of regularly scheduled reports to either the full Board or one of its committees. The Board acting through the Audit Committee reviews as appropriate whether these reports cover the significant risks that the Company may then be facing.

Each of the Board's committees addresses risks that fall within the committee's areas of responsibility. For example, the Audit Committee periodically reviews the audit plan of the internal audit department, the international labor standards compliance program, the tax function, treasury operations, insurance, and the Company's standards of business conduct compliance program. In addition, the Audit Committee receives regular reports from: corporate controllership and the outside auditor on financial reporting matters; the internal audit department about significant findings; and the general counsel regarding legal and regulatory risks. The Audit Committee reviews

information technology risks and mitigation strategies with the Company's chief information officer at least annually. The Audit Committee reserves time at each meeting for private sessions with the chief financial officer, general counsel, head of the internal audit department and outside auditors. The Compensation Committee addresses risks arising out of the Company's executive compensation programs as described at pages 26 to 27, below. The operational risks periodically reviewed by committees are also reviewed by the entire Board when a Committee or the Board determines this is appropriate.

The independent Lead Director promotes effective communication and consideration of matters presenting significant risks to the Company through her role in developing the Board's meeting agendas, advising committee chairs, chairing meetings of the independent Directors and facilitating communications between independent Directors and the Chief Executive Officer.

The Board considers the selection, retention and succession planning for the chief executive officer of the Company to be its most important priority. The Board reserves time at every regularly scheduled Board meeting to meet in executive session without the chief executive officer present during which it discusses management succession as appropriate. The Board also discusses management succession with the chief executive officer present at least once each year, and more often as circumstances warrant. These discussions include evaluation of potential internal candidates for succession and focus on particular individuals as

appropriate. In the course of these discussions, the Board identifies potential candidates and advises the chief executive officer of the exposure these candidates should receive to maximize the ability of the Board to evaluate the candidates' qualifications. The Board also evaluates the experience the candidates should gain to develop their ability to succeed if they become chief executive officer. The Board is confident that effective leadership of the Company would be assured and a highly qualified successor to Mr. Iger can be selected whenever one would need to be named.

Working closely with the full Board, the Governance and Nominating Committee develops criteria for open Board positions. In developing these criteria, the Committee takes into account a variety of factors, which may include: the current composition of the Board and expected retirements from the Board; the range of talents, experiences and skills that would best complement those already represented on the Board; the balance of management and independent Directors; and the need for financial or other specialized expertise. Applying these criteria, the Committee considers candidates for Board membership suggested by Committee members, other Board members, management, and shareholders. The Committee retains a third-party executive search firm to identify and review candidates upon request of the Committee from time to time.

Once the Committee has identified a prospective nominee — including prospective nominees recommended by shareholders — it makes an initial determination as to whether to conduct a full evaluation. In making this determination, the Committee takes into account the information provided to the Committee with the recommendation of the candidate, as well as the Committee's own knowledge and information obtained through inquiries to third parties to the extent the Committee deems appropriate. The preliminary determination is based primarily on the need for additional Board members and the likelihood that the prospective nominee can satisfy the criteria that the Committee has established. If the Committee determines, in consultation with the Chairman of the Board and other Directors as appropriate, that additional consideration is warranted, it may request the third-party search firm to gather additional information about the

prospective nominee's background and experience and to report its findings to the Committee. The Committee then evaluates the prospective nominee against the specific criteria that it has established for the position, as well as the standards and qualifications set out in the Company's Corporate Governance Guidelines, including:

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the ability of the prospective nominee to represent the interests of the shareholders of the Company;

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the prospective nominee's standards of integrity, commitment and independence of thought and judgment;

•

the prospective nominee's ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominee's service on other public company boards, as specifically set out in the Company's Corporate Governance Guidelines;

•

the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board;

•

the extent to which the prospective nominee helps the Board reflect the diversity of the Company's shareholders, employees, customers and guests and the communities in which it operates; and

•

the willingness of the prospective nominee to meet the minimum equity interest holding guideline set out in the Company's Corporate Governance Guidelines.

If the Committee decides, on the basis of its preliminary review, to proceed with further consideration, members of the Committee, as well as other members of the Board as appropriate, interview the nominee. After completing this evaluation and interview, the Committee makes a recommendation to the full Board, which makes the final determination whether to nominate or appoint the new Director after considering the Committee's report.

In selecting nominees for Director, the Board seeks to achieve a mix of members who together bring experience and personal backgrounds relevant to the Company's strategic priorities and the scope and complexity of the Company's business. In light of the Company's current priorities, the Board seeks experience relevant to managing branded franchises, the creation of high-quality branded entertainment products and services, addressing the impact of rapidly changing technology and the management of a multi-national business. The Board also seeks experience in large, diversified enterprises and demonstrated ability to manage complex issues that involve a balance of risk and reward and seeks Directors who have expertise in specific areas such as consumer and cultural trends, business innovation, growth strategies, financial oversight and international business and governmental issues. The background information on current nominees beginning on page 60 sets out how each of the current nominees contributes to the mix of experience and qualifications the Board seeks.

In making its recommendations with respect to the nomination for re-election of existing Directors at the annual shareholders meeting, the Committee assesses the composition of the Board at the time and considers the extent to which the Board continues to reflect the criteria set forth above.

A shareholder who wishes to recommend a prospective nominee for the Board should notify the Company's Secretary or any member of the Governance and Nominating Committee in writing with whatever supporting material the shareholder considers appropriate. The Governance and Nominating Committee will also consider whether to nominate any person nominated by a shareholder pursuant to the provisions of the Company's Bylaws relating to shareholder nominations as described in "Shareholder Communications" below.

The provisions of the Company's Corporate Governance Guidelines regarding Director independence meet and in some respects exceed the listing standards of the New York Stock Exchange. These provisions are included in the Company's Corporate Governance Guidelines, which are available on the Company's Investor Relations website under the "Corporate Governance" heading at www.disney.com/investors.

Pursuant to the Guidelines, the Board undertook its annual review of Director independence in November 2018. During this review, the Board considered transactions and relationships between the Company and its subsidiaries and affiliates on the one hand and, on the other hand, Directors, immediate family members

of Directors, or entities of which a Director or an immediate family member is an executive officer, general partner or significant equity holder. The Board also considered whether there were any transactions or relationships between any of these persons or entities and any members of the Company's senior management or their affiliates. As provided in the Guidelines, the purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the Director is independent.

As a result of this review, the Board affirmatively determined that all of the Directors serving in fiscal

2018 or nominated for election at the 2019 Annual Meeting are independent of the Company and its management under the standards set forth in the Corporate Governance Guidelines, with the exception of Mr. Iger. Mr. Iger is considered an inside Director because of his employment as a senior executive of the Company.

In determining the independence of each Director, the Board considered and deemed immaterial to the Directors' independence transactions involving the sale

of products and services in the ordinary course of business between the Company, on the one hand, and, on the other, companies or organizations at which some of our Directors or their immediate family members were officers or employees during fiscal 2018. In each case, the amount paid to or received from these companies or organizations in each of the last three years was below the 2% of total revenue threshold in the Guidelines. The Board determined that none of the relationships it considered impaired the independence of the Directors.

The Board of Directors has adopted a written policy for review of transactions involving more than $120,000 in any fiscal year in which the Company is a participant and in which any Director, executive officer, holder of more than 5% of our outstanding shares or any immediate family member of any of these persons has a direct or indirect material interest. Directors, 5% shareholders and executive officers are required to inform the Company of any such transaction promptly after they become aware of it, and the Company collects information from Directors and executive officers about their affiliations and affiliations of their family members so the Company can search its records for any such transactions. Transactions are presented to the Governance and Nominating Committee of the Board (or to the Chairman of the Committee if the Committee delegates this responsibility) for approval before they are entered into or, if this is not possible, for ratification after the transaction has been entered into. The Committee approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company, including whether the transaction impairs independence of a Director. The policy does not require review of the following transactions:

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Employment of executive officers approved by the Compensation Committee;

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Compensation of Directors approved by the Board;

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Transactions in which all shareholders receive benefits proportional to their shareholdings;

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Ordinary banking transactions identified in the policy;

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Any transaction specifically contemplated by the Company's Restated Certificate of Incorporation or Bylaws, or any action approved by the Board where the interest of the Director, executive officer, 5% shareholder or family member is disclosed to the Board prior to such action;

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Commercial transactions in the ordinary course of business with entities affiliated with Directors, executive officers, 5% shareholders or their family members if the aggregate amount involved during a fiscal year is less than the greater of (a) $1,000,000 and (b) 2% of the Company's or other entity's gross revenues and the related person's interest in the transaction is based solely on his or her position with the entity;

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Charitable contributions to entities where a Director is an executive officer of the entity if the amount is less than the lesser of $200,000 and 2% of the entity's annual contributions; and

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Transactions with entities where the Director, executive officer, 5% shareholder or immediate family member's sole interest is as a non-executive officer employee of, volunteer with, or director or trustee of the entity.

Each of the investment management firms Vanguard Group, Inc. and Blackrock, Inc., through their affiliates, held more than 5% of the Company's shares during fiscal 2018. Funds managed by affiliates of Vanguard and Blackrock are included as investment options in defined contribution plans offered to Disney employees. In addition, Blackrock manages investment portfolios for the Company's pension funds and provides reporting services related to management of investments in the pension funds. Vanguard and Blackrock received fees of approximately $1 million and $10.9 million, respectively, in fiscal 2018 based on the amounts invested in funds managed by them, and Blackrock received fees of approximately $300,000 for the reporting services. These relationships were in place before Vanguard and Blackrock reported beneficial ownership of more than 5% of the Company's outstanding shares. The ongoing relationships were reviewed and approved by the Governance and Nominating Committee under the Related Person Transaction Approval Policy in November 2018.

Generally. Shareholders may communicate with the Company through its Transfer Agent, Broadridge Corporate Issuer Solutions, by writing to Disney Shareholder Services, c/o Broadridge Corporate Issuer Solutions, P.O. Box 1342, Brentwood, NY 11717, by calling Disney Shareholder Services care of Broadridge at 1-855-553-4763, or by sending an e-mail to disneyshareholder@broadridge.com. Additional information about contacting the Company is available on the Disney Shareholder Services website (www.disneyshareholder.com) under the "Contact Us" tab.

Shareholders and other persons interested in communicating directly with the independent Lead Director or with the non-management Directors as a group may do so by writing to the independent Lead Director, The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521-1030. Under a process approved by the Governance and Nominating Committee of the Board for handling letters received by the Company and addressed to non-management members of the Board, the office of the Secretary of the Company reviews all such correspondence and forwards to Board members a summary and/or copies of any such correspondence that, in the opinion of the Secretary, deals with the functions of the Board or committees thereof or that he otherwise determines requires their attention. The Governance and Nominating Committee reviews summaries of all correspondence from identified shareholders at each regular meeting of the Committee. Directors may at any time review a log of all correspondence received by the Company that is addressed to members of the Board and request copies of any such correspondence.

Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Company's internal audit department and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Shareholder Proposals for Inclusion in 2020 Proxy Statement. To be eligible for inclusion in the proxy statement for our 2020 Annual Meeting, shareholder

proposals must be received by the Company's Secretary no later than the close of business on September 13, 2019. Proposals should be sent to the Secretary, The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521-1030 and follow the procedures required by SEC Rule 14a-8.

Shareholder Director Nominations for Inclusion in 2020 Proxy Statement. Under our Bylaws, written notice of shareholder nominations to the Board of Directors that are to be included in the proxy statement pursuant to the proxy access provisions in Article II, Section 11 of our Bylaws must be delivered to the Company's Secretary not later than 120 nor earlier than 150 days prior to the first anniversary of the preceding year's annual meeting. Accordingly any eligible shareholder who wishes to have a nomination considered at the 2020 Annual Meeting and included in the Company's proxy statement must deliver a written notice (containing the information specified in our Bylaws regarding the shareholder and the proposed nominee) to the Company's Secretary between October 9, 2019 and November 8, 2019.

Shareholder Director Nomination and Other Shareholder Proposals for Presentation at the 2020 Annual Meeting Not Included in 2020 Proxy Statement. Under our Bylaws, written notice of shareholder nominations to the Board of Directors or any other business proposed by a shareholder that is not to be included in the proxy statement must be delivered to the Company's Secretary not later than 90 nor earlier than 120 days prior to the first anniversary of the preceding year's annual meeting. Accordingly, any shareholder who wishes to have a nomination or other business considered at the 2020 Annual Meeting but not included in the Company's proxy statement must deliver a written notice (containing the information specified in our Bylaws regarding the shareholder and the proposed action) to the Company's Secretary between November 8, 2019 and December 8, 2019. SEC rules permit management to vote proxies in its discretion with respect to such matters if we advise shareholders how management intends to vote.

The elements of annual Director compensation for fiscal 2018 were as follows.

1

Per committee.

2

This is in addition to the annual committee retainer the Director receives for serving on the committee.

3

This is in addition to the annual Board retainer, committee fees and the annual deferred stock unit grant.

Effective October 1, 2018, the annual Board retainer increased to $115,000 and the annual deferred stock unit grant increased to $190,000.

To encourage Directors to experience the Company's products, services and entertainment offerings personally, each non-employee Director may receive Company products and services up to a maximum of $15,000 in fair market value per calendar year plus reimbursement of associated tax liabilities. Director's spouses, children and grandchildren may also participate in this benefit within each Director's $15,000 limit.

The Company reimburses Directors for the travel expenses of, or provides transportation on Company aircraft for, immediate family members of Directors if the family members are specifically invited to attend events for appropriate business purposes. Family members (including domestic partners) may accompany Directors traveling on Company aircraft for business purposes on a space-available basis.

Directors participate in the Company's employee gift matching program on the same terms as senior executives. Under this program, the Company matches contributions of up to $50,000 per calendar year per Director to charitable and educational institutions meeting the Company's criteria.

Directors who are also employees of the Company receive no additional compensation for service as a Director.

Under the Company's Corporate Governance Guidelines, non-employee Director compensation is determined annually by the Board of Directors acting on the recommendation of the Governance and Nominating Committee. In formulating its recommendation, the Governance and Nominating Committee receives input from the third-party compensation consultant retained by the Compensation Committee regarding market practices for Director compensation.

The following table sets forth compensation earned during fiscal 2018 by each person who served as a non-employee Director during the year.

Fees Earned or Paid in Cash.    "Fees Earned or Paid in Cash" includes the annual Board retainer and annual committee and committee-chair retainers, whether paid currently or deferred by the Director to be paid in cash or shares after service ends. Directors are permitted to elect each year to receive all or part of their retainers in Disney stock and, whether paid in cash or stock, to defer all or part of their retainers until after service as a Director ends. Directors who elect to receive deferred compensation in cash receive a credit each quarter, and the balance in their deferred cash account earns interest at an annual rate equal to the Moody's Average Corporate (Industrial) Bond Yield, adjusted quarterly, for amounts deferred prior to calendar 2018. For amounts deferred after calendar year 2017, the interest rate is equal to 120% of the Applicable Long-Term Federal Interest Rate as determined from time to time by the United States Internal Revenue Service. For fiscal 2018, the average interest rate was 4.08%.

The following table sets forth the form of fees received by each Director who elected to receive compensation in a form other than currently paid cash. The number of

stock units awarded is equal to the dollar amount of fees accruing each quarter divided by the average over the last ten trading days of the quarter of the average of the high and low trading price for shares of Company common stock on each day in the ten-day period. Stock units distributed currently were accumulated throughout the year and distributed as shares following December 31, 2018.

Stock Awards.    "Stock Awards" sets forth the market value of the deferred stock unit grants to Directors and the amount reported is equal to the market value of the Company's common stock on the date of the award times the number of shares underlying the units. Units are awarded at the end of each quarter and the number of units is determined by dividing the amount payable with respect to the quarter by the average over the last ten trading days of the quarter of the average of the high and low trading price for shares of the Company common stock on each day in the ten-day period. Each Director other than Ms. Catz, Mr. deSouza, Mr. Dorsey, Mr. Froman, Mr. Matschullat, Ms. Sandberg and Mr. Smith was awarded 1,730 units in fiscal 2018. Ms. Catz and Mr. deSouza were each awarded 1,150 units, Mr. Dorsey, Mr. Matschullat and Ms. Sandberg were each awarded 763 units, Mr. Smith was awarded 727 units, and Mr. Froman was awarded 107 units in fiscal 2018.

Unless a Director elects to defer receipt of shares until after his or her service as a Director ends, shares with respect to annual deferred stock unit grants are normally distributed to the Director on the second anniversary of the award date, whether or not the Director is still a Director on the date of distribution.

At the end of any quarter in which dividends are distributed to shareholders, Directors receive additional stock units with a value (based on the average of the high and low trading prices of the Company common stock averaged over the last ten trading days of the quarter) equal to the amount of dividends they would have received on all stock units held by them at the end of the prior quarter. Shares with respect to these additional units are distributed when the underlying units are distributed. Units awarded in respect of dividends are included in the fair value of the stock units when the units are initially awarded and therefore are not

included in the tables above, but they are included in the total units held at the end of the fiscal year in the table below.

Prior to fiscal 2011, each Director serving on March 1 of any year received an option on that date to acquire shares of Company stock. The exercise price of the options was equal to the average of the high and low prices reported on the New York Stock Exchange on the date of grant.

The following table sets forth all stock units and options held by each Director serving during fiscal 2018 as of the end of fiscal 2018. All stock units are fully vested when granted, but shares are distributed with respect to the units only later, as described above. Stock units in this table are included in the share ownership table on page 72 except to the extent they may have been distributed as shares and sold prior to January 7, 2019.

The Company's Corporate Governance Guidelines encourage Directors to own, or acquire within three years of first becoming a Director, shares of common stock of the Company (including stock units received as Director compensation) having a market value of at least five times the amount of the annual Board retainer for the Director. Unless the Board exempts a Director, each Director is also required to retain stock representing no less than 50% of the after-tax value of exercised options and shares received upon distribution of deferred stock units until he or she meets the stock holding guideline described above.

Based on the holdings of units and shares on January 7, 2019, each currently serving Director complied with the minimum holding requirement on that date except Ms. Barra, Ms. Catz, Mr. deSouza and Mr. Froman, who are each within the three-year period following the date on which she or he first became a Director.

All Other Compensation.    "All Other Compensation" includes:

•

Reimbursement of tax liabilities associated with the product familiarization benefits. The value of the product familiarization benefits themselves and travel benefits are not included in the table as permitted by SEC rules because the aggregate incremental cost to the Company of providing these benefits did not exceed $10,000 for any Director. The reimbursement of associated tax liabilities was less than $10,000 for each Director other than Mr. Chen, Ms. Lagomasino, Mr. Langhammer, Mr. Matschullat, Ms. Sandberg and Mr. Smith for whom the reimbursement was $10,758, $11,502, $13,813, $18,860, $18,843 and $10,449, respectively.

•

Interest earned on deferred cash compensation, which was less than $10,000 for each Director.

•

The matching charitable contribution of the Company, which was $35,000 for Ms. Arnold, $50,000 for Ms. Barra and Ms. Sandberg, $49,915 for Mr. Langhammer, $112,222 for Mr. Matschullat, and $49,000 for Mr. Parker. Matched amounts exceed $50,000 in a fiscal year if contributions for separate calendar years are made in the same fiscal year or if there were delays in processing earlier year matches.

Peer Groups

Establishing Compensation Levels

The Compensation Committee believes that the pool of talent with the set of creative and organizational skills needed to run a global creative organization like the Company is quite limited and that, accordingly, the market for executive talent to lead the Company is best reflected by the five other major media companies who have represented competition for this talent — CBS, Comcast, 21st Century Fox, Time Warner and Viacom (with Disney, the "Media Industry Peers"). Although Time Warner was acquired during the fiscal year, it was considered a peer because it remained independent for most of the fiscal year. Disney has more employees, a more extensive global footprint and a greater market capitalization than any of the Media Industry Peers as well as greater revenue, more diverse business segments and greater operating income than all but one of the Media Industry Peers.

The Committee believes that executives with the background needed to manage companies such as ours have career options with compensation opportunities that normally exceed those available in most other industries and that compensation levels within the peer

group are driven by the dynamics of compensation in the entertainment industry and not the ownership structure of a particular company.

Establishing Compensation Structure, Policies and Practice

The Committee believes that the features of the Company's overall compensation structure, policies and practices should normally be consistent for all executives. Because the four distinct segments of our operations span multiple industries, the Committee believes that a consistent approach across the breadth of the Company's operations with respect to such features is best achieved by reference to a general industry group that is broader than the Media Industry Peers.

The peer group used for establishing compensation structure, policies and practices consists of companies that have:

•

A consumer orientation and/or strong brand recognition;

•

A global presence and operations;

•

Annual revenue no less than 40% and no more than two and a half times our annual revenue; and

•

A market capitalization no less than one-quarter and no more than four times our market capitalization;

•

Plus companies that do not meet the revenue test, but that are included in the peer groups used by one or more of the Media Industry Peers.

Advised by its independent consultant, the Committee reviewed the criteria for selecting members of this peer group during fiscal 2018 and determined that the criteria remained appropriate.

Evaluating Performance

The overall financial performance of the Company is driven by the sum of the individual performances of the Company's four segments — Media Networks, Parks and Resorts, Studio Entertainment and Consumer Products & Interactive Media. While the Company announced a strategic reorganization of its businesses into four operating segments in March 2018 (the newly-formed Direct-to-Consumer and International; the combined Parks, Experiences and Consumer Products; Media Networks; and Studio Entertainment) we continued to report financial results based on the old segments throughout the fiscal year while we updated reporting systems to accommodate the new structure. Accordingly, we evaluated compensation in fiscal 2018 based on the earlier segments.

Each of the Company's segments competes in different sectors of the overall market. The Committee believes that, given the span of the Company's businesses, the best measure of relative performance is how the Company's diverse businesses have fared in the face of the economic trends that impact companies in the overall market and that the best benchmark for measuring such success is the Company's relative performance compared to that of the companies comprising the S&P 500. Accordingly, the Committee — like the other media companies and many other businesses — has selected the S&P 500 to set the context for evaluating the Company's performance and to measure relative performance for performance-based restricted stock unit awards.

Summary of Peer Groups

The following table summarizes the three distinct peer groups we use for the three distinct purposes described above:

Compensation at Risk

The Committee believes that most of the compensation for named executive officers should be at risk and tied to a combination of long-term and short-term Company performance. 90% of the target compensation for the CEO, and approximately 80% of the target compensation for other named executive officers, varies with either short or long-term Company performance.

In establishing a mix of fixed to variable compensation, the mix of various equity awards, target bonus levels, grant date equity award values and performance ranges, the Committee seeks to maintain its goal of making compensation overwhelmingly tied to performance while

at the same time affording compensation opportunities that, in success, would be competitive with alternatives available to the executive. In particular, the Committee expects that performance at the high end of ranges will result in overall compensation that is sufficiently attractive relative to compensation available at successful competitors and that performance at the low end of ranges will result in overall compensation that is less than that available from competitors who are more successful.

In determining the mix between options and restricted stock units, the Committee also considers the number of shares required for each of these types of award to deliver the appropriate value to executives.

The following chart shows the percentage of the target total direct annual compensation (constituting base salary and performance-based bonus plus the grant-date fair value of regular annual equity awards) for Mr. Iger that was variable with performance (performance-based bonus and equity awards) versus fixed (salary) in fiscal 2018. The chart does not reflect the impact of the equity awards made in connection with the extension of his employment agreement in December 2017 (whose value is variable with performance) or the impact of the fixed bonus Mr. Iger will receive if he remains employed through July 2, 2019.

2018 Target Total Direct Annual Compensation Mix for CEO

90% of CEO annual target compensation is considered performance-based

For the other NEOs, 81% of average target annual compensation is considered performance-based.

Employment Agreements

We enter into employment agreements with our senior executives when the Compensation Committee determines that it is appropriate to attract or retain an executive or where an employment agreement is consistent with our practices with respect to other similarly situated executives.

We have employment agreements with each of the named executive officers that extend to the dates shown below:

*

Pursuant to an amendment dated December 13, 2017 and assuming completion of the 21CF Acquisition. Otherwise, termination is July 2, 2019 or, if later, 90 days after termination of the merger agreement without closing the transaction.

Material terms of the employment agreements with the named executive officers are reflected under "Total Direct Compensation," above, and "Benefits and Perquisites," "2018 Compensation Decisions" and "Compensation Tables — Potential Payments and Rights on Termination or Change in Control," below.

Benefits and Perquisites

The Company provides employees with benefits and perquisites based on competitive market conditions. All salaried employees, including the named executive officers, receive the following benefits:

•

health care coverage;

•

life and disability insurance protection;

•

reimbursement of certain educational expenses;

•

access to favorably priced group insurance coverage; and

•

Company matching of gifts of up to $25,000 per employee each calendar year to qualified charitable organizations.

Officers at the vice president level and above, including named executive officers, receive the following benefits:

•

complimentary access to the Company's theme parks and some resort facilities;

•

discounts on Company merchandise and resort facilities;

•

for officers at the vice president level and higher before October 1, 2012, a fixed monthly payment to offset the costs of owning and maintaining an automobile;

•

relocation assistance;

•

eligibility for annual reimbursement of up to $1,000 for wellness-related purposes such as fitness, nutrition and physical exams; and

•

personal use of tickets acquired by the Company for business entertainment when they become available because no business use has been arranged.