DISNEY SLUGFEST BOARD MAY SPLIT CEO, CHAIRMAN POSITIONS.Byline: Greg Hernandez Staff Writer A battered Michael D. Eisner goes into today's annual shareholder meeting of The Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Co. in Philadelphia knowing that perhaps as much as 30 percent of the company's institutional shareholders want him ousted as chairman of Disney's board of directors. Eisner is among the several board members up for re-election in a vote that is shaping up to be a referendum on Eisner's performance both as board chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the company. With Eisner's position weakening, the Disney board could announce as early as today that it plans to split the jobs of chairman and chief executive, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times. That would represent a reversal of the board's position, but was brought up Tuesday in an Op-Ed article in The Wall Street Journal by George J. Mitchell, Disney's presiding director. Although the board members are running unopposed, if more than 20 percent of shareholders withhold their votes, it could put pressure on the board to make a change at the top. ``It doesn't mean that the Disney board absolutely has to do something if they are convinced keeping Eisner is the best thing to do,'' observed Robert Prentice, business law professor at the University of Texas. ``But it does mean they have to look at it carefully. They have a huge fiduciary duty here and they also have a huge PR problem. They have to be sensitive to those things.'' Eisner's biggest public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most problem has been Roy E. Disney Roy Edward Disney, KCSG, (born January 10, 1930) was a longtime senior executive for The Walt Disney Company, which his father Roy Oliver Disney and his uncle Walt founded. , a major shareholder and dissident former board member who is the nephew of the company's namesake. Disney, who physically resembles his uncle, has led what had once appeared to be a quixotic quix·ot·ic also quix·ot·i·cal adj. 1. Caught up in the romance of noble deeds and the pursuit of unreachable goals; idealistic without regard to practicality. 2. fight to dethrone de·throne tr.v. de·throned, de·thron·ing, de·thrones 1. To remove from the throne; depose. 2. To remove from a prominent or powerful position. Eisner, whom he holds responsible for some of the company's shortcomings A shortcoming is a character flaw. Shortcomings may also be:
At a news conference in Philadelphia on Tuesday, Roy Disney admitted that the effort to oust Eisner has been an emotionally difficult undertaking but said he is keeping his mind on business. ``We need every vote we can get,'' he said. Roy Disney and fellow ex-board member Stanley Gold have led a three-month campaign against Eisner, and in the past 10 days have seen it pick up remarkable steam. So much so that Bob Iger, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of The Walt Disney Co., held a hastily arranged news conference of his own in Philadelphia as the last-minute scramble for votes intensified. Iger said today's meeting is ``a day that I believe gives us an opportunity to prove to everyone that the statements about us and the campaign that has been waged is indeed distorted and one that is rife with misinformation mis·in·form tr.v. mis·in·formed, mis·in·form·ing, mis·in·forms To provide with incorrect information. mis .'' In his nearly 20 years at the helm of the company - which Eisner helped to grow into a major media and entertainment conglomerate comprised of theme parks, a movie studio, a television network and cable channels - the Disney chief's job has never appeared so vulnerable. Eisner has been under especially heavy fire since Feb. 11, when Comcast Corp. made a hostile takeover Hostile Takeover A takeover attempt that is strongly resisted by the target firm. Notes: Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm. bid for Disney. This came just weeks after Pixar Animation Studios called off talks to extend its lucrative partnership with Disney. Eisner and the company appeared to have weathered the Comcast bid, which was officially rejected last week by the board. But the episode seemed to cast light on some of the company's perceived weaknesses even after it enjoyed an earnings turnaround and record movie business in recent quarters. As Roy Disney and Gold stepped up their efforts, a loss of support for Eisner from major state pension funds including California, New York, Florida and several others followed. The pension fund revolt came after influential Wall Street players such as Institutional Shareholder Services and Glass Lewis & Co. also called for Eisner's ouster ouster n. 1) the wrongful dispossession (putting out) of a rightful owner or tenant of real property, forcing the party pushed out of the premises to bring a lawsuit to regain possession. from the board. Most of the state pension funds said their withholding of support for Eisner's re-election was based on their belief that the board chairmanship should be independent and held by someone other than the CEO. But Roy Disney and Gold insist that Eisner, whose contract expires in 2006, should step down completely from both jobs. ``Anything over 20 percent is sending a message that Eisner has to go,'' Gold insisted Tuesday. In addition to the Comcast takeover attempt and the Pixar defection, Eisner has been made more vulnerable by prolonged sagging ratings at Disney-owned ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. and by details made public in recent weeks in connection with a Delaware lawsuit against the board of directors over the 1995 hiring of Michael Ovitz as president of The Walt Disney Co. During a disastrous 15-month tenure, Ovitz racked up more than $6 million in personal expenses, then received a severance package worth more than $100 million when he was forced out. The surfacing of this information was coincidental but could not come at a worse time for Eisner, whose idea it was to hire Ovitz. ``You have to look at the entire scenario with everything that is going on with the Comcast offer on the table, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. over Ovitz payments going on; 30 percent would mean even more today than it would regularly and 30 percent regularly would be a lot,'' Prentice said. Disney spokeswoman Zenia Mucha defended the company's performance in light of the growing pension-fund revolt against Eisner and said the company has laid out its key long-term strategies for achieving attractive double-digit earnings growth through 2007. ``Disney's record of building value is indisputable, as evidenced by the nearly 60 percent increase in stock price in the past year,'' Mucha said in a statement. ``Disney management and the Board believe Disney is a well-managed company with world-class governance that is on track for earnings growth from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in excess of 30 percent this year.'' In a shareholder letter made public this week, the Disney board said voting to re-elect re·e·lect also re-e·lect tr.v. re·e·lect·ed, re·e·lect·ing, re·e·lects To elect again. re Eisner and the current board would be ``making an important statement'' and be in the best interests of enhancing shareholder value. Opinions differ on how long the board will take to decide Eisner's future. While some expect a long and drawn-out deliberation in the hopes that the dust will settle, Prentice recommends a quick resolution no matter what the outcome. ``I'd want to get this behind me as soon as possible, make a firm decision and implement it as soon as possible,'' he said. Roy Disney and Gold, who both bitterly resigned from the board last fall, will have 15 minutes to speak at today's official company meeting and have indicated that regardless of what happens, they will continue to fight for new leadership. ``We are not going away,'' Gold vowed Tuesday. ``We will be here next week, next month, next year.'' Greg Hernandez, (818) 713-3758 greg.hernandez(at)dailynews.com CAPTION(S): drawing, box Drawing: (color) no caption (Michael D. Eisner) Jorge Irribarren/Staff Artist Box: WHAT'S AT STAKE? |
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