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The Disneyland Report > Disney News > Disney dissidents say board's on right track Disney NewsDisney dissidents say board's on right trackBy Adam Steinhauer Walt Disney Co. dissident shareholders Roy Disney and Stanley Gold, who have called for Chief Executive Michael Eisner's replacement, said their campaign was successful and praised the board's decision to hire a search firm to find a successor by June 2005. "The board has now woken up to the fact they need to get a new CEO and Michael needs to be out," Gold said in an interview. "We're cautiously optimistic they'll do what they say," said Gold, who manages investments for Roy Disney, nephew of the company's founder. Their praise follows 10 months of calling for Eisner's resignation from the second-biggest U.S. media company. At Disney's annual meeting in March, 45 percent of the shares voted were withheld from the CEO. "This is their way to declare victory and walk away," Vic Hawley, a fund manager at Reed Conner & Birdwell in Santa Monica, Calif., said of Roy Disney and Gold. "The moment Eisner announced he was retiring in two years, effectively, it was over. It took all the wind out of the sails," said Hawley;, whose firm owns 2.5 million Disney shares. Roy Disney and Gold in 1984 helped engineer Eisner's installation as CEO and the late Frank Wells' appointment as Disney president. Gold and Roy Disney quit the board last fall, and the two became the most vocal investors calling for Eisner's resignation. "It is you who should be leaving and not me," Roy Disney wrote in a letter to Eisner last year. After the March annual meeting in Philadelphia, Disney's board heeded calls by investors including the California Public Employees' Retirement System, the world's biggest pension fund, and forced Eisner to give up his role as chairman. Former U.S. Sen. George Mitchell, Disney's presiding director, took the chairman job. Mitchell met with pension funds in May to discuss the company's governance and performance. Disney shares, which have fallen 3.1 percent this year, lost 57 cents to close at $22.60 yesterday. The stock has dropped 20 percent in the last five years. Roy Disney and Gold deserve some of the credit for changes at Disney, said Greg Taxin, chief executive of San Francisco-based proxy adviser Glass, Lewis. "We went from a company with an autocratic ruler who thought he held the post for life, to today where we have a more independent board looking for a new CEO," Taxin said. "That's a tectonic shift." Disney spokesman John Spelich didn't immediately return a call seeking comment. In his two decades as chief executive, the longest term of any CEO among executives of companies listed on the Standard and Poor's 500, Eisner boosted sales almost 18-fold. Under him, Disney bought Capital Cities/ABC for $19 billion, opened seven new theme parks, added 70 new cable-TV networks and increased the number of employees fourfold. He lost executives including Jeffrey Katzenberg, failed in his bid to renew a distribution agreement with Pixar Animation Studios and angered investors by not outlining a succession plan. After Wells died in a helicopter crash in 1994, Eisner hired talent agent Michael Ovitz to fill the vacancy. Ovitz lasted 15 months in the job. Disney's board last week said it will hire an executive-search firm to assist in selecting a replacement for Eisner and that it will consider internal and external candidates. Disney President Robert Iger is the only internal candidate. "Roy and Stanley are making it clear they endorse the broad outlines of the plan the board has put forward," said Patrick McGurn, vice president at Institutional Shareholder Services (ISS). "I am sure they'll continue to monitor the board. For now the saber rattling is over." To read the rest of this article, click here.Return to Disney News. |
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