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News > An Open Letter to the Non-Employee Members of the Board
Of Directors of The Walt Disney Company
Disney News
Press Release
An Open Letter to the Non-Employee Members of the Board Of Directors
of The Walt Disney Company
The following is the text of a letter sent by Save Disney founders
Roy E. Disney and Stanley P. Gold to the Board of Directors of the Walt
Disney Company in response to CEO Michael Eisner's two-year retirement
announcement. The letter requests that the board seriously consider
a new CEO even before Eisner's retirement instead of hanging on to a
"lame duck" CEO and criticizes Eisner for putting his own
interests before those of the Walt Disney Company's shareholders.
Roy E. Disney
Stanley P. Gold
4444 Lakeside Drive
Burbank, CA 91505
September 13, 2004
Mr. John Bryson
Mr. John Chen
Ms. Judith Estrin
Mr. Alwyn Lewis
Ms. Monica Lozano
Mr. Robert Matschullat
Mr. George Mitchell
Father Leo O'Donovan
Mr. Gary Wilson
Ladies and Gentlemen:
For each of you the upcoming September 20 Board meeting will be a moment
of truth -- one in which you will have the opportunity to exercise your
fiduciary duties and demonstrate your commitment to serving the best
interests of The Walt Disney Company and its stockholders.
Michael Eisner's announcement that he intends to remain CEO for the
next two years forces you to make a critical decision. Will you choose
to let the Company drift for two more years -- allowing the pall Mr.
Eisner has cast to continue to drive the most talented and creative
people away from Disney, erode the morale of current employees, and
prevent the Company from attracting the strong, dynamic, and creative
leader it needs? Or will you reject Mr. Eisner's brazen attempt to usurp
your responsibilities as directors by stage-managing the appointment
of his anointed successor and instead tangibly show your commitment
to best corporate practices by immediately initiating an expeditious
and broad search for a world-class CEO?
We understand and appreciate the difficult position in which Mr. Eisner
has once again placed you. As those instrumental in bringing both Michael
Eisner and Frank Wells to Disney in 1984, we know how close some of
you are to him personally. But there is no acceptable solution that
includes Mr. Eisner's continued leadership at Disney for the next two
years -- let alone any longer than that. Regardless of whether he serves
in a diminished capacity during the next two years as a "lame duck"
or continues to manage the Company, the changes necessary to restore
Disney's luster will simply not be made.
As former Disney directors, major stockholders, and individuals with
a longtime passion and commitment to the Company, we believe it is intolerable
for Michael Eisner to continue to hold the Company hostage for two more
years -- and perhaps longer. As recently pointed out by the Los Angeles
Times, "Management experts note that most retiring CEO's take three
to nine months to tie up loose ends and train a successor before hitting
the exits. Longer transitions, they say, can be chaotic and disorienting."
In the case of Disney, where management turmoil has enveloped the Company
for years, dragging out succession planning for another two years would
be catastrophic. Disney cannot compete effectively in the constantly
changing and evolving entertainment and media industry if it is frozen
in place. Stockholders will continue to see the value of their investment
languish, just as the price of Disney's shares has over the past seven
years.
While Mr. Eisner's announcement at first blush looks like a major change,
it is in truth mere window dressing. What he has really proposed is
a scheme to arrogate the authority of the Board and maintain the status
quo at the Company's expense.
Press accounts suggest that Mr. Eisner intends to ask you to install
him as chairman after he relinquishes the CEO title. In other words,
his "succession plan" is for a company led by Michael Eisner
and his obedient lieutenant, Bob Iger, to be handed over to ... Michael
Eisner and Bob Iger. Do you really think that this result will be tolerated
by stockholders or will satisfy anyone that you have carried out your
responsibilities? Any arrangement that permits Mr. Eisner to remain
as Chairman after relinquishing his position as CEO is contrary to best
governance practices. Disney stockholders deserve exemplary governance
from their directors.
In effect, Mr. Eisner has challenged each of you to exercise the power
delegated to you by stockholders. His preemptive announcement of his
favored candidate to serve as CEO once again demonstrates his disregard
for the proper responsibilities of the Board to make such vital decisions.
In his view, the Board's role is merely to rubber stamp his unilateral
decisions, to provide cover for his real agenda.
Your course is clear. We ask you to immediately engage an independent
executive recruiting firm to conduct a worldwide search for a strong
visionary leader capable of guiding this Company as it faces the challenges
ahead. Because we believe that no one with the skill, experience, dynamism
and creativity needed to lead Disney will take the job if Mr. Eisner
remains as CEO or chairman, we ask you to concurrently announce that
Michael Eisner will retire as CEO and as a director at the conclusion
of that search. If you make it clear that Mr. Eisner is leaving the
Company and the Board, we have no doubt that a number of excellent candidates
will beat a path to your door. In that case, choosing a successor could
be accomplished prior to the 2005 Annual Meeting of Disney stockholders.
This is more than five months away, surely enough time for a proactive
Board to get the job done.
The actions this Board needs to take are straightforward. Once again,
Mr. Eisner has placed his personal ambitions ahead of the interests
of the Disney stockholders; in so doing he has hijacked your duties
as directors. The only question is whether you have the courage to confront
Mr. Eisner. More than six months have passed since the stockholders
cast their resounding vote of no confidence in Mr. Eisner and this Board.
During those six months, you, the non-employee directors, have done
little or nothing to restore that confidence. For the good of the Company,
it is time for this Board to demonstrate its independence. Bringing
in a new CEO -- and doing so quickly -- is the first step in restoring
the vibrancy of this Company. It will allow the Company to strengthen
and broaden its management team and rebuild the morale of Cast Members.
It will allow the Company to attract top talent and begin to repair
the damaged relationships with Disney's creative partners.
We intend to make it clear -- to our fellow stockholders, to Disney
Cast Members and to other Disney constituencies -- that we will strongly
support Directors who want to move Disney forward by requiring Mr. Eisner
to leave as CEO and as a Director no later than the 2005 Annual Meeting
and who are committed to the Board conducting an immediate search for
a new CEO. By the same token, we will oppose with unrelenting vigor
Directors who continue to support drift, delay, and decay. Should the
Board not take the actions proposed above -- immediately engaging an
independent executive recruiting firm to conduct a worldwide search
for a talented CEO and concurrently announcing that Michael Eisner will
leave the Company at the conclusion of that search --we intend to take
our case directly to our fellow stockholders and propose an alternate
slate of directors committed to moving the Company forward aggressively.
You have the authority and the responsibility to manage Mr. Eisner's
succession. In so doing, we urge you to put first and foremost the interest
of the Company stockholders, Cast Members, and the millions of people
who love Disney. The spotlight is now on each of you. Disney stockholders
and Cast Members deserve to know where you stand after this important
Board meeting. We await your response.
Yours very truly,
Roy E. Disney and Stanley P. Gold
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