If you plan to attend the meeting, you must be a shareholder on the record date and request an admission ticket in advance following the instructions set forth on page 64 of this proxy statement. Tickets will be issued to registered and beneficial owners and to one guest accompanying each registered or beneficial owner.

Requests for admission tickets will be processed in the order in which they are received and must be requested no later than March 11, 2014. Please note that seating

is limited and requests for tickets will be accepted on a first-come, first-served basis. On the day of the meeting, each shareholder will be required to present valid picture identification such as a driver’s license or passport with their admission ticket. Seating will begin at 9:00 a.m. and the meeting will begin at 10:00 a.m. Cameras (including cell phones with photographic capabilities), recording devices and other electronic devices will not be permitted at the meeting. You will be required to enter through a security check point before being granted access to the meeting.

Fiscal 2013 Performance

The Company delivered strong financial performance in fiscal 2013 and achieved record revenue, net income and earnings per share for the third year in a row. Compared to fiscal 2012:

• Diluted earnings per share, net income attributable to shareholders and segment operating income each increased by 8% and revenue increased by 7%.

*For a reconciliation of segment operating income to net income, see Annex B.

• Operating income improved in the Consumer Products, Parks and Resorts, Media Networks and Interactive segments. Studio Entertainment operating income declined modestly driven by a less profitable home entertainment release slate.

This performance helped drive strong total shareholder returns (TSR) in fiscal 2013 relative to the TSR of the S&P 500. Additionally, the Company has dramatically outperformed the S&P 500 for the three and five-year periods.

With respect to the Media Industry peers (used for contractual benchmarking purposes as described on page 19), our five-year TSR performance through the end of fiscal 2012 outpaced the weighted average TSR for this group. However, it lagged the TSR of this group for the five years ending in fiscal 2013.

• This is primarily due to the superior performance of our stock during the financial crisis. During fiscal 2008 our stock declined only 5% compared to an average decline of 29% for the other companies in the Media Industry group. As a result, Disney’s stock began the five-year performance period at a much higher relative level than the average for the other companies in the Media Industry group,

and therefore did not rebound as much as the others when the market recovered. This factor suppressed our five-year TSR growth rate compared to the other companies in the Media Industry group.

*Market cap-weighted TSR for The Walt Disney Company, CBS, Twenty-First Century Fox, Time Warner, Viacom, and Comcast

Financial Performance During Mr. Iger’s Tenure

In our ongoing meetings with shareholders, there was broad agreement with the Compensation Committee’s assessment that Mr. Iger’s performance as Chief Executive Officer has been excellent. During his tenure, the Company’s financial results have been outstanding. On a compounded basis, income from continuing operations has grown 12% and diluted EPS has grown 14%.

This financial success has translated into strong shareholder returns. Disney’s TSR of 202% over Mr. Iger’s tenure dramatically exceeds the 63% return of the S&P 500 performance peer group and the Media Industry group’s average TSR of 152% from September 30, 2005, to September 27, 2013.

Mr. Iger’s and the management team’s leadership has been critical to maintaining the strong, long-term performance described above. The Compensation Committee considers this long-term performance in making compensation decisions.

We summarize the Committee’s compensation philosophy and address Mr. Iger’s compensation below. We provide a more detailed explanation of our compensation program, Mr. Iger’s compensation and the compensation of other named executive officers in the Compensation Discussion and Analysis beginning on page 19.

Compensation Structure and Philosophy

The Compensation Committee firmly believes in pay-for-performance and has therefore structured executive compensation so that over 90% of Mr. Iger’s compensation (and over 80% of the compensation of other named executive officers) depends on the Company’s financial results and the performance of Disney stock. Base salary is the only fixed compensation element. Substantially all other compensation breaks into two performance-based categories:

• An annual performance-based cash bonus opportunity that is:
  (a) 70% dependent on performance against ranges established by the Committee on four financial measures (segment operating income, diluted EPS, after-tax free cash flow and return on invested capital) that it believes drive the attainment of long-term shareholder value; and
  (b) 30% dependent on how the Compensation Committee assesses executives’ individual contributions in driving Disney toward the attainment of an array of qualitative goals tied to the Company’s strategic priorities.
• An annual equity award, which for the Chief Executive Officer is comprised of 50% options and 50% performance-based units. The realized option value depends on the performance of Disney stock and the realized performance-unit value depends on three-year tests based on relative TSR and EPS performance.

Response to Last Year’s Advisory Vote on Compensation

At our 2013 Annual Meeting, the majority of shares cast were voted in favor of the advisory vote on executive compensation. We continue to strive to improve the level of shareholder support on this issue. To ensure that the Board and Compensation Committee consider direct shareholder feedback, we maintain a robust shareholder engagement program, meeting with many of our largest investors. The Compensation Committee has been regularly updated on conversations with investors and understands that shareholders remain very focused on the alignment of pay and performance as well as the absolute level of executive compensation, particularly for the Chief Executive Officer.

The Committee remains committed to pay-for-performance and believes that fiscal 2013 compensation demonstrates this alignment and that compensation is appropriately responsive to changes in performance and not excessive relative to compensation paid in the media industry.

Fiscal 2013 Chief Executive Officer Compensation

In a year in which diluted earnings per share, net income attributable to shareholders and segment operating income each increased by 8% and revenue increased 7%, Mr. Iger’s compensation as reported in the summary compensation table on page 35 nevertheless decreased by 15% or $5.9 million compared to fiscal 2012. There were two components to this decrease. First, because the Company’s strong results did not overperform against the Committee established performance ranges in fiscal 2013 by the same extraordinary amount as in fiscal 2012, Mr. Iger’s cash bonus was approximately $3.0 million less year over year. Second, an increase in the discount rate caused a change in the value of his pension benefit of $3.1 million. The following table details the components of Mr. Iger’s compensation in fiscal 2013 and fiscal 2012:

Each year, the Compensation Committee sets the financial performance ranges and determines the qualitative performance that factors into the annual bonus, and has discretion to increase Mr. Iger’s salary or equity awards above contractually determined amounts. Details regarding each of the Committee’s decisions regarding Mr. Iger’s fiscal 2013 compensation are set out below.

Salary: The Compensation Committee left Mr. Iger’s salary for fiscal 2013 unchanged.

Equity Awards: The Compensation Committee left the reported value of Mr. Iger’s equity awards for fiscal 2013 unchanged from the reported value in fiscal 2012.

Non-Equity Incentive Plan Compensation: Mr. Iger’s performance-based cash bonus of $13.6 million reflects performance against the four financial performance measures and pre-defined qualitative goals as discussed below:

• Financial Performance Measures: The Compensation Committee set aggressive performance ranges for the four financial performance measures. While the Company delivered strong growth in fiscal 2013 against each of the four financial measures, that growth was insufficient to generate a performance factor of 100% on two of the four measures (segment operating income at 92% and adjusted EPS at 99%). The shortfall in these two measures was offset by the exceptional growth in after-tax free cash flow (performance factor of 158%). Also, the growth in return on invested capital yielded a performance factor of 108%. Taking all four into account, the weighted financial performance factor was 112% compared to 132% in fiscal 2012.

• Other Performance Factors: The Committee applied a factor of 115% to Mr. Iger’s qualitative performance in fiscal 2013 versus 150% in fiscal 2012, when the factor was affected by the acquisition of Lucasfilm and the culmination of a number of strategic milestones including the opening of Cars Land at California Adventure, expansion at Hong Kong Disneyland, the launch of the second new cruise ship, and the strong box office results for Marvel’s The Avengers. The Committee’s determination this year to apply again a factor beyond 100% reflected its assessment of Mr. Iger’s continuing outstanding leadership and vision in driving the Company toward the attainment of long-term goals.  

performance ranges in a way that requires meaningful growth in financial performance in order for Mr. Iger to achieve or exceed the target bonus opportunity provided for in his employment agreement.

In recent years, Mr. Iger’s reported compensation has generally been at or below the median of reported compensation for Media Industry Peers. The one exception was in fiscal 2012 (the last year for which compensation data is currently available for all of the Media Industry Peers), when the Company experienced exceptional performance. It is important to note that Mr. Iger’s compensation has been at or below the median of peers despite the fact that Disney has more employees, more diverse business segments and a more extensive global footprint than any of the Media Industry Peers and greater revenue, operating income and market capitalization than all but one of the Media Industry Peers.

Additional details on our compensation program and fiscal 2013 compensation can be found in the Executive Compensation section of this proxy statement beginning on page 19.

Extension of Mr. Iger’s Tenure as Chief Executive Officer

During the past fiscal year, the Board and Mr. Iger discussed extending Mr. Iger’s tenure as Chief Executive Officer for an additional 15 months to coincide with the term of his service as Chairman of the Board, which ends on June 30, 2016. The Board determined that it was in the best interest of shareholders to have the full benefit of Mr. Iger’s leadership as Chief Executive Officer and Chairman for the duration of his tenure, and on July 1, 2013, the Board extended Mr. Iger’s tenure as Chief Executive Officer through the expiration of his employment agreement with the same compensation currently afforded to Mr. Iger as Chief Executive Officer in the agreement.

While the extension of Mr. Iger’s position as Chief Executive Officer means that his tenure no longer overlaps with the anticipated tenure of a new chief executive officer, the Board believes that the benefit of Mr. Iger continuing as Chief Executive Officer outweighs the benefits that might arise from such an overlap. The Board regularly discusses succession matters and is working closely with Mr. Iger to ensure a smooth management transition.

Shareholder Proposals

In this year’s proxy statement, you will find two shareholder proposals, one seeking proxy access and one related to acceleration of equity awards on a change in control. The Board recommends against each of these proposals.

• Proxy access: This proposal asks the Board to adopt proxy access allowing holders of 3% of the Company’s shares for at least 3 years to nominate a director and have that nominee included in the Company’s proxy statement. The Board recommends against this proposal because it believes that in the absence of a mandatory proxy access right at all companies, proxy access should be implemented only where there is a demonstrable need for shareholders to make changes in the boardroom. That need does not exist at Disney:

• We have mechanisms that protect shareholder rights, including a 90% independent Board, majority voting in director elections and a strong independent lead director.
• We have a robust process for identifying directors that have the appropriate mix of knowledge and skills for our Board.
• Shareholders already have the opportunity to nominate director candidates.
• Assuming shareholders approve the proposed amendment to our Certificate of Incorporation, shareholders will have the ability to call a special meeting.
• We actively engage in dialogue with shareholders.

• Shareholders have supported the Board’s position on each of the three matters cited by proponents by a majority vote.
• The Board has adopted a variety of practices at the urging of shareholders, including annual election of directors, majority voting for directors and disclosure of political contributions.

• Acceleration of Equity Awards on a Change in Control: The proposal asks the Board to limit acceleration of equity awards following a change in control to pro-rata acceleration. The Board recommends against this proposal because it believes the current structure appropriately aligns the interest of executives and shareholders.

• We currently have a double trigger (equity is accelerated following a change in control only if a participant’s employment is also terminated).
• Reduction of the value of equity awards by pro-rata acceleration following a change in control could create incentives in the negotiation and implementation of a change in control transaction that would conflict with investor interests in the transaction.
• Pro-rata acceleration would also erode the incentive that equity awards create to remain with the Company, raising the risk of departure of valuable employees.

Moreover, acceleration of vesting on a change in control is standard practice among public companies. Adoption of the proposal runs a risk of losing employees to competitors and that risk could be mitigated only by incurring the significant cost of compensating each of the 4,800 participants in our plans for the loss of value arising from adoption of pro-rata acceleration.

We direct you to pages 59 and 61 where you can read our detailed positions on these proposals.

Governing Documents

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 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 chief 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 six times during fiscal 2013. Each current Director attended at least 75% of all of the meetings of the Board and Committees on which he or she served. All but two directors attended the Company’s 2013 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 annual and special 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 will be an independent Director, unless the Board determines that a different structure would better serve the best interests of the shareholders, in which case, the Board will disclose in the Company’s 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. For the reasons discussed in last year’s proxy, the Board determined that the interests of shareholders would be best served by naming Mr. Iger as Chairman upon the retirement of

John Pepper as Chairman, effective March 13, 2012 and through June 30, 2016, the end of the new employment agreement entered into with Mr. Iger in October, 2012. Under that agreement, Mr. Iger was to serve as Chairman and Chief Executive Officer through March 31, 2015, and then as Chairman through the remainder of the term. The Board concluded that extending Mr. Iger’s employment contract in October 2012 and naming him as Chairman of the Board through the remainder of the term of his new employment agreement would put in place an effective plan for the future transition of leadership that would best serve the interests of the Company and its shareholders.

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 Chair position. The Board was uniformly of the view that Mr. Iger would provide excellent leadership of the Board in the performance of its duties.

During the past fiscal year, the Board and Mr. Iger discussed extending Mr. Iger’s tenure as Chief Executive Officer through June 30, 2016, on existing contractual terms. The Board determined that it was in the best interest of shareholders to have the full benefit of Mr. Iger’s leadership as Chief Executive Officer and Chairman for the duration of his tenure and on July 1, 2013 extended Mr. Iger’s tenure as Chief Executive Officer through the expiration of his employment agreement in June 2016. While the extension of Mr. Iger’s position as Chief Executive Officer means that Mr. Iger’s tenure as Chairman under his agreement no longer overlaps with the anticipated tenure of a new Chief Executive Officer, the Board believes that the benefit of Mr. Iger’s continuing as Chief Executive Officer outweighs any benefits that would arise from such an overlap and that a smooth management transition will still be achieved.

At the time Mr. Iger became Chairman, the Board unanimously elected Orin Smith as 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. 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;
• 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 the risks that inhere in the key economic and market assumptions that underpin the Company’s business plans and growth strategies and significant operational risks related to the conduct of the Company’s day-to-day operations.

Risks that relate to the market and economic assumptions that underpin each business unit’s growth plans are specifically addressed in connection with the Board’s annual 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 on an annual basis whether these reports appropriately 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 reviews periodically the audit plan of management audit, the international

labor standards compliance program, the Company’s information technology risks and mitigation strategies, the tax function, treasury operations (including insurance) and the ethical standards and compliance program. In addition, the Audit Committee receives regular reports from: corporate controllership and the outside auditor on financial reporting matters; management audit about significant findings; and the general counsel regarding legal and regulatory risks. The Audit Committee reserves time at each meeting for private sessions with the chief financial officer, general counsel, head of management audit and outside auditors. The Compensation Committee addresses risks arising out of the Company’s executive compensation programs as described at pages 24 to 25, below.

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

Working closely with the full Board, the Governance and Nominating Committee develops criteria for open Board positions, taking into account such factors as it deems appropriate, which may include: the current composition of 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 its members and other Board members, as well as 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:

• the ability of the prospective nominee to represent the interests of the shareholders of the Company;
• 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 the creation of high-quality branded entertainment products and services, addressing the impact of rapidly changing technology and expanding

business outside of the United States. 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 and financial oversight. The background information on current nominees beginning on page 52 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 areas 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 December 2013. During this review, the Board considered transactions and relationships between each Director or any member of his or her immediate family and the Company and its subsidiaries and affiliates. The Board also considered whether there were any transactions or relationships between Directors or any member of their immediate

family (or any entity of which a Director or an immediate family member is an executive officer, general partner or significant equity holder) and 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 2013 or nominated for election at the 2014 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 at which some of our Directors or their immediate family members were officers or employees

during fiscal 2013. In each case, the amount paid to or received from these companies 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:

• Employment of executive officers approved by the Compensation Committee;
• Compensation of Directors approved by the Board;
• Transactions in which all shareholders receive benefits proportional to their shareholdings;

• Ordinary banking transactions identified in the policy;
• Any transaction contemplated by the Company’s Restated Certificate of Incorporation, Bylaws or Board action where the interest of the Director, executive officer, 5% shareholder or family member is disclosed to the Board prior to such action;
• 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;
• 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
• 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.

During fiscal year 2013, there were no transactions requiring disclosure with, or with an immediate family member of, Directors, executive officers or persons who were the beneficial owners of more than 5% of the Company’s outstanding shares during the fiscal year.

Generally. Shareholders may communicate with the Company through its Transfer Agent, Broadridge Corporate Issuer Solutions, by writing to Disney Investor Relations, c/o Broadridge Corporate Issuer Solutions, P.O. Box 1342, Brentwood, NY 11717, by calling Disney Shareholder Services care of

Broadridge at (855) 553-4763, or by sending an e-mail to disneyinvestor@broadridge.com. Additional information about contacting the Company is available on the Company’s Investor Relations website (www.disney.com/investors) under “Shareholder Information” and “Contact Us.”

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. 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 2015 Proxy Statement. To be eligible for inclusion in the proxy statement for our 2015 Annual Meeting, shareholder proposals must be received by the Company’s Secretary

no later than the close of business on September 26, 2014. 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 and Other Shareholder Proposals for Presentation at the 2015 Annual Meeting. Under our bylaws, written notice of shareholder nominations to the Board of Directors and 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 less than 90 nor more 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 2015 Annual Meeting 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 18, 2014 and December 18, 2014. SEC rules permit management to vote proxies in its discretion with respect to such matters if we advise shareholders how management intends to vote.

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. Directors who are also employees of the Company receive no additional compensation for service as a Director. The elements of annual Director compensation for fiscal 2013 are as shown at the right.

Effective October 1, 2013, the Board of Directors increased the annual deferred stock unit grant to $170,000 and increased the annual committee chair retainer for the Compensation Committee to $20,000.

The Company does not provide retirement benefits to any non-employee Directors who served during fiscal 2013.

The table on the right identifies the compensation earned during fiscal 2013 by each person who served as a non-employee Director during the year. Information regarding the amounts in each column follows.

Fees Earned or Paid in Cash. The annual Board retainer and annual committee and committee-chair retainers are payable in cash at the end of each quarter. The Company’s Amended and Restated 1997 Non-Employee Directors Stock and Deferred Compensation Plan allows non-employee Directors to elect each year to receive all or part of their retainers in Disney stock or to defer all or part of this compensation until after their service as a Director ends. Directors who elect to receive stock instead of cash but who do not defer their compensation are credited each quarter with a dollar amount equal to fees earned that quarter based on the fair market value of shares at the end of the quarter and receive shares after the end of each calendar year. Directors who elect to defer their compensation may also elect to receive cash or stock. 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 fiscal 2013, the average interest rate was 4.28%. Interest earned on deferred amounts is included in the “All Other Compensation” column. Directors who elect to receive deferred compensation in stock receive stock units each quarter and shares of stock are distributed with respect to these units after their service as a Director ends.

The column labeled “Fees Earned or Paid in Cash” sets forth amounts payable in cash on a current basis, whether paid currently or deferred by the Director to be paid in cash or shares after their service ends.

Form of Receipt of Director Fees. The following table identifies for each Director the dollar amount included in the “Fees Earned or Paid in Cash” column received in cash, the dollar amount deferred to be paid in cash, and the number and dollar value of stock units received as deferred compensation. The number of 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. In the case of Ms. Lozano, a portion of the units represented fees paid currently in stock and was distributed as shares following December 31, 2013.

Stock Awards. This column sets forth the grant date fair market value of awards for service in fiscal 2013 with respect to the annual deferred stock unit grant.

The grant date fair market value 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.

The number of units awarded is equal to the amount payable with respect to a 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 the Company common stock on each day in the ten-day period. The following table identifies the number of stock units awarded to each Director during fiscal 2013.

One fourth of the annual deferred stock unit grant and annual retainer is awarded at the end of each quarter. 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 following table.

Director Stock Unit Holdings. The following table sets forth all stock units held by each Director as of the end of fiscal 2013. 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 65 except to the extent they may have been distributed as shares and sold prior to January 20, 2014.

The Company’s Corporate Governance Guidelines also 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 17, 2014, each Director complied with the minimum holding requirement on that date.

All Other Compensation. To encourage Directors to experience the Company’s products, services and entertainment offerings personally, the Board has adopted a policy, that, subject to availability, entitles each non-employee Director (and his or her spouse, children and grandchildren) to use Company products, attend Company entertainment offerings and visit Company properties (including staying at resorts, visiting theme parks and participating in cruises) at the Company’s expense, up to a maximum of $15,000 in fair market value per calendar year plus reimbursement of associated tax liabilities. In addition, 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 and allows family members (including domestic partners) to accompany Directors traveling on Company aircraft for business purposes on a space-available basis. The value of these benefits is not included in the table as permitted by SEC rules because the aggregate incremental cost to the Company of providing the benefits did not exceed $10,000 for any Director. The reimbursement of associated tax liabilities is included in the table above, and was less than $10,000 for each Director other than Mr. Chen and Mr. Matschullat, for whom the reimbursement was $15,120 and $12,076, respectively. The column also includes interest earned on deferred cash compensation, which was less than $10,000 for each Director except for Ms. Lozano, for whom interest earned totaled $20,192.

In October 2012, the Board determined that Directors should be permitted to participate in the Company’s employee gift matching program on the same terms as employees. Under this program, the Company matches up to $15,000 of charitable contributions made by employees to charitable and educational institutions meeting the Company’s criteria. The matching contribution of the Company is included in the table above, and was $15,000 for each of Ms. Arnold, Mr. Langhammer, Mr. Matschullat and Mr. Smith.

Options Outstanding. 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 the aggregate number of stock options outstanding for each Director at the end of fiscal 2013.

Peer Groups

     Establishing Compensation Levels

The Committee believes that the pool of talent with the set of creative and organizational skills needed to run a global media organization like the Company is quite limited. Moreover, executives with the talents and experience needed to run a global creative organization have career options with compensation opportunities that normally exceed those available in most other industries. The Committee believes that the market for executive talent to lead a global creative organization is best reflected by the five other major media companies who compete for this talent – CBS, Comcast, Twenty-First Century Fox, Time Warner and Viacom. For that reason, the Committee looks to those five companies as the relevant peer group for named executive officer compensation purposes.

The Committee understands that some groups have reservations about using these companies because some of them are effectively controlled by a single shareholder.

The Committee acknowledges these concerns, but believes that it is constrained by the competitive reality that these companies set the market for the talent we need. The Committee believes that compensation levels within that group are driven by the dynamics of compensation in the entertainment industry and not the ownership structure of a particular company. Moreover, the Committee believes that a majority shareholder has just as much (if not more) incentive than any other shareholder to demand a compensation structure that maximizes shareholder value. In any event, the Committee believes that it must compete effectively for talent with these companies.

The Committee has also considered suggestions to expand the peer group to better reflect the universe of companies in which investors themselves choose to invest, so that executive compensation at the Company matches more closely the compensation at other companies with similar returns in this broader group. While the Committee understands the perspective of investors who invest across this broader group, it believes that using a broader group

would not appropriately reflect either the different talents needed to manage our businesses nor the competitive reality the Company faces. The fact that a particular level of performance has been achieved by appropriately compensated executives in another industry is not a meaningful indicator of what market driven compensation must be offered to attract and retain executives with the talent to achieve comparable levels of performance at Disney.

Establishing Compensation Structure, Policies and Practice

The Committee believes that the Company’s overall compensation structure, policies and practices should be consistent for all executives and to achieve that end looks at a broader industry group when evaluating them. The reason for using the broader group is that the five distinct segments of our operations span multiple industries and a general industry group provides the appropriate and fairest points of comparison to achieve the desired consistency of approach.

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 half and no more than twice 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.

The companies that meet these criteria and were included in the peer group in fiscal 2013 were:

Advised by its independent consultant, the Committee reviewed the criteria for selecting members of this peer group in fiscal 2013 and determined that it was advisable

to widen the revenue test to 0.4 times to 2.5 times Company revenue. As a result of this change and changes in peer company revenues, IBM will be added to the general industry peer group for fiscal 2014 and General Electric will no longer be a member of the group.

Evaluating Performance

The overall financial performance of the Company is the sum total of the aggregate performance of the Company’s five distinct segments – Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive – each of which competes in separate markets. The Committee continues to believe 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 generally 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. As shown below, over 90% of the compensation awarded to the CEO and over 80% of the compensation awarded to 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, and 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 charts show the percentage of the total direct compensation (constituting base salary and performance-based bonus plus the grant-date fair value of regular annual equity awards) awarded to Mr. Iger and the other NEOs that is variable with performance (performance-based bonus and equity awards) versus fixed (salary).

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:

Material terms of the employment agreements with the named executive officers are reflected under “Total Direct Compensation” above and “Fiscal 2013 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 $15,000 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 or, for the term of any lease existing at the end of fiscal 2012, the option of receiving an automobile supplied by the Company (including insurance, maintenance and fuel);
• relocation assistance;
• eligibility for annual reimbursement of up to $450 for health club membership or exercise equipment and reimbursement of up to $1,500 for an annual physical examination; and
• personal use of tickets acquired by the Company for business entertainment when they become available because no business use has been arranged.

Named executive officers (and some other senior executives) are also entitled to the following additional benefits and perquisites: basic financial planning services, enhanced excess liability coverage, increased relocation assistance, and an increased automobile benefit.

The Company pays the cost of security services and equipment for the Chief Executive Officer in an amount that the Board of Directors believes is reasonable in light of his security needs and, in the interest of security, requires the Chief Executive Officer to use corporate aircraft for all personal travel. Other senior executive officers are also permitted at times to use corporate aircraft for personal travel at the discretion of the Chief Executive Officer.

Retirement Plans

Named executive officers participate in defined benefit and defined contribution retirement programs available to all of our salaried employees.

Tax-qualified defined benefit plans limit the benefit to participants whose compensation or benefits would exceed maximums imposed by applicable tax laws. To provide retirement benefits commensurate with compensation levels, the Company offers non-qualified plans to key salaried employees, including the named executive officers, using substantially the same formula for calculating benefits as is used under the tax-qualified plans on compensation in excess of the compensation limitations and maximum benefit accruals.

Additional information regarding the terms of retirement programs for the named executive officers is included in “Compensation Tables — Pension Benefits” beginning on page 43.

Risk Management Considerations

The Compensation Committee believes our annual performance-based bonus and equity programs create incentives to enhance long-term shareholder value. The following elements of the program are designed to promote the creation of long-term value and discourage behavior that leads to excessive risk:

• Financial Performance Metrics. The financial metrics used to determine the amount of an executive’s bonus are measures the Committee believes drive long-term shareholder value. The ranges set for these measures are intended to reward success without encouraging excessive risk taking.
• Limit on Bonus. The overall bonus opportunity is not expected to exceed two times the target amount, no matter how much financial performance exceeds the ranges established at the beginning of the fiscal year.
• Equity Vesting Periods. Recently awarded performance-based stock units vest in three years (units awarded before 2010 vested over one to four years). Time-based stock units and options vest annually over four years and options remain exercisable for 10 years. These periods are designed to reward sustained performance over several periods, rather than performance in a single period.
• Equity Retention Guidelines. Named executive officers are required to acquire within five years of becoming an executive officer, and hold as long as they are executive officers of the Company, shares (including restricted stock units) having a value of at least three times their base salary amounts, or five times in the case of the Chief Executive Officer. If these levels have not been reached, these officers are required to retain ownership of shares representing at least 75% of the net after-tax gain (100% in the case of the Chief Executive Officer) realized on exercise of options for a minimum of 12 months. Based on holdings of units and shares on January 17, 2014, each named executive officer exceeded the minimum holding requirement on that date.
• No Hedging or Pledging. Named executive officers (and other employees subject to the Company’s insider trading compliance program) are not permitted to enter into any transaction designed to hedge, or having the effect of hedging, the economic risk of owning the Company’s securities and they are prohibited from pledging Company securities.
• Clawback Policy. If the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws as a result of misconduct by an executive officer, applicable law permits the Company to recover incentive compensation from that executive officer (including profits realized from the sale of Company

securities). In such a situation, the Board of Directors would exercise its business judgment to determine what action it believes is appropriate. Action may include recovery or cancellation of any bonus or incentive payments made to an executive on the basis of having met or exceeded performance targets during a period of fraudulent activity or a material misstatement of financial results if the Board determines that such recovery or cancellation is appropriate due to intentional misconduct by the executive officer that resulted in performance targets being achieved that would not have been achieved absent such misconduct.

At the Compensation Committee’s request, management conducted its annual assessment of the risk profile of our compensation programs in December 2013. The assessment included an inventory of the compensation programs at each of the Company’s segments and an evaluation of whether any program contained elements that created risks that could have a material adverse impact on the Company. Management provided the results of this assessment to Frederic W. Cook & Co., Inc., which evaluated the findings and reviewed them with the Committee. As a result of this review, the Committee determined that the risks arising from the Company’s policies and practices are not reasonably likely to have a material adverse effect on the Company.

Other Considerations

Timing of Equity Awards

Equity awards are made by the Compensation Committee only on dates the Committee meets. Committee meetings are normally scheduled well in advance and are not scheduled with an eye to announcements of material information regarding the Company. The Committee may make an award with an effective date in the future contingent on commencement of employment, execution of a new employment agreement or some other subsequent event.

Extended Vesting of Equity Awards

For all participants in the Company’s equity award program (except certain employees outside the United States) who are age 60 or older and have at least ten years of service at the date of retirement:

• Options awarded after March 2011 (and awarded at least one year before retirement) continue to vest and remain exercisable until the earlier of five years after retirement and the original expiration date (options awarded between December 2009 and March 2011 continue to vest and remain exercisable for three, instead of five, years); and

• Restricted stock unit awards awarded at least one year before retirement continue to vest following retirement according to the original vesting schedule (including satisfaction of performance conditions other than, in some cases, the test to ensure that the compensation is deductible pursuant to Section 162(m)).

In addition, employment agreements for executive officers generally provide that options and restricted stock units continue to vest (and in the case of options, remain exercisable) according to original vesting and expiration schedules (including any extended vesting based on age and service at the end of the stated term) on the same basis as if the executive remained employed through the term of the employment agreement when the executive is terminated by the Company without cause, or if the executive terminates for good reason, before the completion of the term of his or her employment agreement.

Deductibility of Compensation

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1 million paid for any fiscal year to the corporation’s chief executive officer and up to three other executive officers (other than the chief financial officer) whose compensation must be included in this proxy statement because they are our most highly compensated executive officers. Section 162(m) exempts qualifying performance-based compensation from the deduction limit if applicable requirements are met.

The Compensation Committee has structured awards to executive officers under the Company’s annual performance-based bonus program and equity awards program to qualify for this exemption. However, the Committee believes that shareholder interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses. Therefore, the Committee has approved salaries for executive officers that were not fully deductible because of Section 162(m) and may approve other compensation that is not deductible for income tax purposes.

To qualify for deduction, awards to executive officers under the annual performance-based bonus program and the long-term incentive program include a performance test based on adjusted net income in addition to the other performance tests described above. Adjusted net income means net income adjusted, as appropriate, to exclude the following items or variances: change in accounting principles; acquisitions; dispositions of a business; asset

impairments; restructuring charges; extraordinary, unusual or infrequent items; and extraordinary litigation costs and insurance recoveries. For fiscal 2013, the adjusted net income target was $4.0 billion, and the Company achieved adjusted net income of $6.1 billion. Net income was adjusted by reducing it to reflect the after tax effects of gains on the sales of businesses ($151 million) and tax benefits related to prior year earnings ($207 million) and by

increasing it to reflect the after tax effects of a litigation charge ($202 million), restructuring and impairment charges ($133 million) and a charge related to equity redemption at a joint venture ($35 million). Therefore, bonuses earned in fiscal 2013 and restricted stock units vesting based on fiscal 2013 results are deductible under Section 162(m).

Management Input

In addition to the CEO recommendations described above, management regularly:

• provides data, analysis and recommendations to the Compensation Committee regarding the Company’s executive compensation programs and policies;
• administers those programs and policies as directed by the Committee;
• provides an ongoing review of the effectiveness of the compensation programs, including competitiveness and alignment with the Company’s objectives; and
• recommends changes to compensation programs if needed to help achieve program objectives.

The Committee meets regularly in executive session without management present to discuss compensation decisions and matters relating to the design and operation of the executive compensation program.

Compensation Consultant

The Compensation Committee has retained the firm of Frederic W. Cook & Co., Inc. as its compensation consultant. The consultant assists the Committee’s development and evaluation of compensation policies and practices and the Committee’s determinations of compensation awards by:

• attending Committee meetings;
• meeting with the Committee without management present;

• providing third-party data, advice and expertise on proposed executive compensation awards and plan designs;
• reviewing briefing materials prepared by management and outside advisers and advising the Committee on the matters included in these materials, including the consistency of proposals with the Committee’s compensation philosophy and comparisons to programs at other companies; and
• preparing its own analysis of compensation matters, including positioning of programs in the competitive market and the design of plans consistent with the Committee’s compensation philosophy.

The Committee considers input from the consultant as one factor in making decisions on compensation matters, along with information and analyses it receives from management and its own judgment and experience.

The Compensation Committee has adopted a policy requiring its consultant to be independent of Company management. The Committee performs an annual assessment of the consultant’s independence to determine whether the consultant is independent. The Committee assessed Frederic W. Cook & Co. Inc.’s independence in December 2013 and confirmed that the firm’s work has not raised any conflict of interest and the firm is independent under the policy.

This section discusses the specific decisions made by the Compensation Committee in fiscal 2013 or with respect to fiscal 2013 compensation.

Investor Engagement

At our 2013 Annual Meeting the majority of shares cast voted in favor of the advisory vote on executive compensation. We continue to strive to improve the level of shareholder support on this issue. To ensure that the Board and Compensation Committee consider direct shareholder feedback, we maintain a robust shareholder engagement program, meeting with many of our largest investors. The Compensation Committee has been regularly updated on conversations with investors and understands that shareholders remain very focused on the alignment of pay and performance as well as the absolute level of executive compensation, particularly for the Chief Executive Officer.

The Committee remains committed to pay-for-performance and believes that fiscal 2013 compensation demonstrates this alignment. Fiscal 2013 compensation for the Chief Executive Officer (and for the named executive officers in the aggregate) was below fiscal 2012 levels due in part to the fact that while it was strong, financial growth did not overperform against the performance ranges set by the Compensation Committee by as much as it did in 2012. The Committee believes that the resulting compensation is appropriately responsive to changes in performance and is not excessive relative to compensation paid in the media industry.

Employment Agreements

Employment Agreement with Mr. Iger

During fiscal 2013, the Board (acting on the recommendation of the Compensation Committee) decided to amend Mr. Iger’s employment agreement to extend the period he serves as Chief Executive Officer to June 30, 2016, the end of the agreement’s term. Prior to amendment, Mr. Iger’s service as Chief Executive Officer was scheduled to end on March 31, 2015, and from that date until June 30, 2016, he would serve only as Executive Chairman. Under the amended agreement, Mr. Iger’s annual compensation for the extended Chief Executive Officer period will be determined on the same basis as his annual compensation as Chief Executive Officer was determined prior to the amendment. Specifically, his target annual incentive under the Company’s annual performance-based bonus program and the target equity award value for fiscal year 2016 will be the same as those that apply for fiscal year 2015.

As described under “Board Leadership,” above, the Board extended Mr. Iger’s tenure as Chief Executive Officer because it determined that it was in the best interest of shareholders to have the benefit of Mr. Iger’s leadership as Chief Executive Officer and Chairman for the duration of his tenure.

Employment Agreement with Mr. Braverman

During fiscal 2013, the Compensation Committee approved terms of a new employment agreement with Mr. Braverman, which was subsequently negotiated and agreed to. The new agreement was effective as of October 1, 2013, upon expiration of Mr. Braverman’s previous agreement.

The new agreement includes a minimum annual base salary of $1,400,000 beginning January 1, 2014, and the target for calculating annual performance-based bonus opportunities is 200% of annual base salary at the end of the fiscal year, as was the case under his prior agreement. The agreement also sets a target award value for annual long-term incentive compensation awards at twice Mr. Braverman’s annual base salary at the end of the fiscal year, but the Committee retains discretion to adjust this target value.

Other material terms of the employment agreements with Mr. Iger and Mr. Braverman are described under “Other Considerations — Employment Agreements” above and “Compensation Tables — Potential Payments and Rights on Termination or Change in Control,” beginning on page 45.

Performance Goals

The Compensation Committee sets performance goals for each fiscal year early in that year, and evaluates performance against those goals after the fiscal year has ended to arrive at its compensation decisions.

Setting Goals

     Financial Performance

In November 2012, the Compensation Committee selected the following financial measures and relative weights for calculating the portion of the named executive officers’ bonuses that is based on financial performance:

• segment operating income (25.0%)
• return on invested capital (25.0%)
• after-tax free cash flow (21.4%)
• earnings per share (28.6%)

These are the same measures used in recent years and the Committee selected them because it believes successful performance on these measures promotes the creation of long-term shareholder value. The Committee places slightly more weight on earnings per share and slightly less weight on after-tax cash flow because, between the two, it believes earnings per share is somewhat more closely related to shareholder value.

The Committee also established performance ranges for each of the measures in November 2012. These ranges are used to determine the multiplier that is applied to 70% of each named executive officer’s target bonus. The overall financial performance multiple is equal to the weighted average of the performance multiples for each of the four measures. The performance multiple for each measure is zero if performance is below the bottom of the range and varies from 35% at the low end of the performance range to a maximum of 200% at the top end of the range. The Committee believes the top of each range represented extraordinary performance in light of the goals established for the year and expected economic conditions, and the bottom of each range represented disappointing performance. The 70% of an executive’s target bonus that is tied to these measures generally cannot be achieved unless there is meaningful growth across the four financial measures on a weighted basis.

The following table shows actual performance in fiscal 2012 and the target ranges chosen by the Committee for fiscal 2013 (dollars in millions except per share amounts):

     Other Performance Factors

The Committee also established other performance factors for fiscal 2013 in November 2012. The Committee established the following factors based on the recommendation of Mr. Iger and the strategic objectives of the Company:

• Foster quality, creativity and innovation in how we create, market and distribute all of our products
• Drive long-term growth internationally, particularly through recent acquisitions and initiatives
• Manage efficiency across all areas of spending
• Invest in our people including an emphasis on diversity, leadership and improved communications

Evaluating Performance

After the fiscal year ended, the Compensation Committee reviewed overall performance of the Company. The Company delivered strong financial performance in fiscal 2013, while achieving record revenue, net income and earnings per share for the third year in a row. The Company also delivered strong shareholder returns in fiscal 2013 as measured for the one, three and five-year periods. Data detailing this performance is set forth in the proxy statement summary beginning on page 1.

The strong performance was reflected in our performance against each of the four financial measures used to determine 70% of each named executive officer’s bonus award.

• Segment operating income grew 7.6%
• Adjusted earnings per share grew 10.4%
• After-tax free cash flow grew 57.7%
• Return on invested capital grew by 10 basis points to 10.5%

Under the aggressive performance ranges that the Committee had set for the year, that strong performance was insufficient to generate a performance factor of 100% on two of the measures, but taking all four measures into account yielded a weighted financial performance factor of 112%.

In comparing actual performance for fiscal 2013 to the performance ranges, the Compensation Committee excluded the impacts of gains on the sales of businesses, tax benefits related to prior year earnings, a litigation charge, restructuring and impairment charges and a charge related to equity redemption at a joint venture.

The Committee also evaluated performance of each executive officer against the other performance factors established at the beginning of the year. While these

were based on the individual factors for each executive discussed below, the evaluations were against the backdrop of the Company’s overall strong performance and continued focus on the Company’s long-term strategy to develop quality entertainment, respond to technological change and promote growth of our international business.

The compensation set forth above and described below differs from the total compensation reported in the Summary Compensation Table as follows:

• The dollar value of equity awards differs from the aggregate dollar value for equity awards reported in the Summary Compensation Table and the Fiscal 2013 Grants of Plan Based Awards Table because the dollar value reported in this table for performance-based restricted stock units is equal to the grant-date share price multiplied by the number of target shares granted. This amount is less than the amount reported in the other tables, which report the value used for accounting purposes, because the accounting cost is adjusted for the probability that strong performance will increase the number of units vesting over the target number of units. The Committee generally uses the dollar value included in the table to determine awards because employment agreement provisions regarding equity awards are based on this value.

• The compensation set forth above does not include the change in pension value and nonqualified deferred compensation earnings as the change in pension value does not reflect decisions made by the Committee during the fiscal year.
• The compensation set forth above does not include perquisites and benefits and other compensation as these matters are determined by contract and do not reflect decisions made by the Committee during the fiscal year.

The Committee’s determination on each of these matters was based on the recommendation of Mr. Iger (except in the case of his own compensation), the parameters established by each executive’s employment agreement and the factors described below. In addition, in determining equity awards, the Committee considered its overall long-term incentive guidelines for all executives, which attempt to balance, in the context of the competitive market for executive talent, the benefits of incentive compensation tied to performance of the Company’s common stock with the dilutive effect of equity compensation awards.

Salary. This column sets forth the base salary earned during each fiscal year, none of which was deferred.

Stock Awards. This column sets forth the grant date fair value of the restricted stock unit awards granted to the named executive officers during each fiscal year as part of the Company’s long-term incentive compensation program. The grant date fair value of these awards was calculated by multiplying the number of units awarded by the average of the high and low trading price of the

Company’s common stock on the grant date, subject to valuation adjustments for restricted stock unit awards subject to performance-based vesting conditions other than the test to assure deductibility under Section 162(m) of the Internal Revenue Code. The valuation adjustments, which reflect the fact that the number of shares received on vesting varies based on the level of performance achieved, were determined using a Monte Carlo simulation that determines the probability that the performance targets will be achieved. The grant date fair

value of the restricted stock unit awards granted during fiscal 2013 is also included in the Fiscal 2013 Grants of Plan Based Awards table on page 37.

Option Awards. This column sets forth the grant date fair value of options to purchase shares of the Company’s common stock granted to the named executive officers during each fiscal year. The grant-date fair value of these options was calculated using the binomial option pricing model. The assumptions used in estimating the fair value of these options are set forth in footnote 12 to the Company’s Audited Financial Statements for fiscal 2013. The grant date fair value of the options granted during fiscal 2013 is also included in the Fiscal 2013 Grants of Plan Based Awards table on page 37.

Non-Equity Incentive Plan Compensation. This column sets forth the amount of compensation earned by the named executive officers under the Company’s annual performance-based bonus program during each fiscal year. A description of the Company’s annual performance-based bonus program is included in the discussion of “2013 Total Direct Compensation” in the “Executive Compensation Program Structure” section, and the determination of performance-based bonuses for fiscal 2013 is described in the “2013 Compensation Decisions” section, of the Compensation Discussion and Analysis, beginning on page 19.

Change in Pension Value and Nonqualified Deferred Compensation Earnings. This column reflects the aggregate change in the actuarial present value of each named executive officer’s accumulated benefits under all defined benefit plans, including supplemental plans, during each fiscal year. The amounts reported in this column vary with a number of factors, including the discount rate applied to determine the value of future payment streams. As a result of a reduction in prevailing interest rates in the credit markets since late 2008, the discount rate used pursuant to pension accounting rules to calculate the present value of future payments decreased from 4.75% for fiscal 2011 to 3.85% for fiscal 2012 driving the substantial increases in the present value of future payments reported for fiscal 2011 and fiscal 2012. The discount rate increased in fiscal 2013, which drove the decline for that year noted in the footnote to the table. Neither the increase nor the decrease in pension value resulting from changes in the discount rate results in any increase or decrease in benefits payable to participants under the plan.

None of the named executive officers was credited with earnings on deferred compensation other than Mr. Iger, whose earnings on deferred compensation, which are disclosed below under “Deferred Compensation,” were not payable at above market rates and therefore are not reported in this column.

All Other Compensation. This column sets forth all of the compensation for each fiscal year that we could not properly report in any other column of the table, including:

• the incremental cost to the Company of perquisites and other personal benefits;
• the amount of Company contributions to employee savings plans;
• the dollar value of insurance premiums paid by the Company with respect to excess liability insurance for the named executive officers; and
• the dollar amount of matching charitable contributions made to charities pursuant to the Company’s charitable gift matching program, which is available to all regular US employees with at least one year of service.

The dollar amount of matching charitable contributions was $15,000, $16,000, $2,000 and $11,500 for Mr. Iger, Mr. Rasulo, Mr. Braverman and Mr. Mayer, respectively.

In accordance with the SEC’s interpretations of its rules, this column also sets forth the incremental cost to the Company of certain items that are provided to the named executive officers for business purposes but which may not be considered integrally related to his or her duties.

The following table sets forth the incremental cost to the Company of each perquisite and other personal benefit that exceeded the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for a named executive officer in fiscal 2013.

The incremental cost to the Company of the items specified above was determined as follows:

• Personal air travel: the actual catering costs, landing and ramp fees, fuel costs and lodging costs incurred by flight crew plus a per hour charge based on the average hourly maintenance costs for the aircraft during the year for flights that were purely personal in nature, and a pro rata portion of catering costs where personal guests accompanied a named executive officer on flights that were business in nature. Where a personal flight coincided with the

• Security: the actual costs incurred by the Company for providing security equipment and services.

The “Other” column in the table above includes, to the extent a named executive officer elected to receive any of these benefits, the incremental cost to the Company of the vehicle benefit, personal air travel where the cost to the

Company was less than $25,000, reimbursement of up to $450 for health club membership or exercise equipment and reimbursement of expenses for financial consulting.

The named executive officers also were eligible to receive the other benefits described in the Compensation Discussion and Analysis under the discussion of “Benefits and Perquisites” in the “Compensation Program Elements” section, which involved no incremental cost to the Company or are offered through group life, health or medical reimbursement plans that are available generally to all of the Company’s salaried employees.

Grant date. The Compensation Committee made the annual grant of stock options and restricted stock unit awards for fiscal 2013 on January 16, 2013, and made an additional award to Mr. Mayer on March 5, 2013. The Compensation Committee approved awards under the annual performance-based bonus program on December 3, 2013.

Estimated Possible Payouts Under Non-equity Incentive Plan Awards. As described in the Compensation Discussion and Analysis, the Compensation Committee sets the target bonus opportunity for the named executive officers at the beginning of the fiscal year under the Company’s annual performance-based bonus program and the Amended and Restated 2002 Executive Performance Plan, and the actual bonuses for the named executive officers may, except in special circumstances such as unusual challenges or extraordinary successes, range from 35% to 200% of the target level based on the Compensation Committee’s evaluation of financial and other performance factors for the fiscal year. The bonus amount may be zero, if actual performance is below the specified threshold level (including the Section 162(m) test), or less than the calculated amounts if the Compensation Committee otherwise decides to reduce the bonus. As addressed in the discussion of 2013 Compensation Decisions in the Compensation Discussion and Analysis, the employment agreements of Mr. Iger, Mr. Rasulo, Mr. Braverman, Mr. Mayer and Ms. Parker require that the target bonus opportunity used to calculate the bonus opportunity (but not the actual bonus awarded) be at least the amount specified in each agreement. This column shows the range of potential bonus payments for each named executive officer from the threshold to the maximum based on the target range set at the beginning of the fiscal year. The actual bonus amounts received for fiscal 2013 are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

Estimated Future Payouts Under Equity Incentive Plan Awards. This column sets forth the number of restricted stock units awarded to the named executive officers during fiscal 2013 that are subject to the test to assure eligibility for deduction under Section 162(m) and/or to performance tests as described below. These include units awarded to each of the named executive officers as part of the annual grant in January 2013. Each of Mr. Iger’s awards is subject to both the test to assure eligibility under Section 162(m) and the performance tests described below. The units in row A (and in the case of Mr. Mayer, Row C) for each of the other named executive

officers are subject to the test to assure eligibility under Section 162(m) and the units in row B are subject to this test as well as the performance tests described below.

The vesting dates for all of the outstanding restricted stock unit awards held by the named executive officers as of the end of fiscal 2013 are set forth in the Fiscal 2013 Outstanding Equity Awards at Fiscal Year-end table below.

All units subject to only the Section 162(m) test (Row A and in the case of Mr. Mayer, Row C) vest if that test is met (plus any shares received as dividend equivalents prior to vesting), and none of the units vest if the test is not met. This amount is shown in the “target” column for Row A and in the case of Mr. Mayer, Row C.

In the case of units subject to the performance tests in addition to the Section 162(m) test (all of Mr. Iger’s units and the units in Row B for other named executive officers), none of the units vest if the Section 162(m) test is not met and units vest as follows if the Section 162(m) test is met.

Half of the units are subject to a total shareholder return test and half of the units are subject to an earnings per share test. For each half:

• None of the units related to a measure vest if the Company’s total shareholder return or earnings per share, respectively, is below the 25^th percentile of the S&P 500 for that measure.
• If the Company’s total shareholder return or earnings per share, respectively, is at or above the 25^th percentile of the S&P 500 for the related measure, the number of units related to that measure that vest will vary from 50% of the target number related to that measure (at the 25^th percentile) to 150% of the target number related to that measure (at or above the 75^th percentile) (in each case, plus dividend equivalent units)

For example, for the one-half of the grant subject to an earnings per share test, and the other half separately subject to a total shareholder return test, the total number of shares vesting would equal:

• the number in the “threshold” column if the Company is at the 25^th percentile for each test;
• the number in the “target” column if the Company is at the 50^th percentile for each test; and
• the number in the “maximum” column if the Company is at or exceeds the 75^th percentile for each test (in each case, plus dividend equivalent units).

When dividends are distributed to shareholders, dividend equivalents are credited in an amount equal to the dollar amount of dividends on the number of units held on the dividend record date divided by the fair market value of the Company’s shares of common stock on the dividend distribution date. Dividend equivalents vest only when, if and to the extent that the underlying units vest.

All Other Option Awards: Number of Securities Underlying Options. This column sets forth the options to purchase shares of the Company’s common stock granted to the named executive officers as part of the annual grant in January 2013. The vesting dates for these options are set forth in the Fiscal 2013 Outstanding Equity Awards at Fiscal Year-End table below. These options are scheduled to expire ten years after the date of grant.

Exercise or Base Price of Option Awards; Grant Date Closing Price of Shares Underlying Options. These columns set forth the exercise price for each option grant and the closing price of the Company’s common stock on the date of grant. The exercise price is equal to the average of the high and low trading price on the grant date, which may be higher or lower than the closing price on the grant date.

Grant Date Fair Value of Stock and Option Awards. This column sets forth the grant date fair value of the stock and option awards granted during fiscal 2013 calculated in accordance with applicable accounting requirements. The grant date fair value of all restricted stock unit awards and options is determined as described on pages 35 and 36, above.