MAGIC DAY FOR DISNEY BOARD NO SQUEAKER AS SHAREHOLDERS SHOW SUPPORT.

Byline: Evan Pondel Staff Writer

In sharp contrast to just a year ago, shareholders of The Walt Disney Co. overwhelmingly re-elected all 12 board directors, including Chief Executive Michael Eisner, whose vote was withheld by dissident investors Roy E. Disney and Stanley Gold.

A preliminary tally of proxy ballots counted about 1.7 billion shares, or 92.2 percent of shares voted, in favor of returning all directors to the board. The new one-year terms also apply to Chairman George Mitchell and President Robert Iger, whose name continues to surface as a possible successor to Eisner in 2006.

``It's been 20 years since I put on my first Mickey tie ... and I believe the prospects have never been brighter,'' said Eisner at Disney's annual shareholders meeting Friday in Minneapolis.

The 62-year-old executive discussed Disney's future accompanied by Iger, who seamlessly began speaking after every few phrases completed by Eisner. Shareholders at the meeting continued to advocate that Disney search outside the Burbank-based company for a new CEO.

Chairman Mitchell reiterated that the company is considering internal and external candidates. ``We approach this decision with good faith and open minds,'' he said.

A year ago Friday, the future of Eisner and Disney as a whole was in question. The morning of the shareholders' meeting, cable giant Comcast Corp. made a surprise takeover bid. Former board members Roy E. Disney and Stanley Gold and some of the nation's biggest public retirement funds, including California's, had called for Eisner's ouster. Roughly 45 percent of the shares voted at the Feb. 11, 2004, meeting were withheld from Eisner.

This year, Disney's meeting arrives a week after the company reported a 5 percent increase in first-quarter profit. Dennis McAlpine, analyst with McAlpine associates in New York, said the economy is finally breathing new life into the company. As for Iger's CEO prospects, McAlpine said sharing the spotlight with Eisner at the meeting is in his favor.

``This is good news for Iger. It looks like he's the one person at Disney who the company is looking at (for CEO),'' he said.

But discontent for the company's management was still evident at the meeting. Shareholders called on the company to apply more ethical standards to labor conditions in Asia. Mitchell said he will review the company's effort in promoting responsible labor practices.

State funds that opposed key board members last year maintained their positions, with the California Public Employees' Retirement System once again opposing Eisner's re-election to the board. Conversely, New York state retirement funds voted for all directors to return.

Shareholders also approved the company's 2005 stock incentive plan, and the appointment of PricewaterhouseCoopers as the company's accountants for the fiscal year ending Sept. 30, 2005.

Despite opposition from Disney's board, shareholders voted in favor of a proposal to stop greenmail - the payment of money to appease a proxy contest or takeover threat. Mitchell said the company will discuss why it opposes this proposal in the future.

Disney shares shed a penny to close at $29.34 Friday on the New York Stock Exchange.

Evan Pondel, [phone]

evan.pondel(at)dailynews.com