Posted on 12/01/2003 12:15:09 PM PST by Jean S
LOS ANGELES (AP) - A key ally joined Roy E. Disney in resigning from the Walt Disney Co. board Monday, becoming the second vocal opponent of chairman and chief executive Michael Eisner to quit in two days.
Stanley Gold issued a long rebuke to Eisner and the Disney board Monday, seconding complaints made Sunday by Roy Disney and further criticizing the board ad a rubber stamp to senior management.
Gold also repeated Disney's calls for Eisner to resign.
"It is clear to me that this board is unwilling to tackle the difficult issues I believe this company continues to face," Gold wrote. Among the problems, he said, were "the cannibalization of certain company icons for short-term gain, the enormous loss of creative talent over the last years, the absence of succession planning and the lack of strategic focus."
Gold's resignation comes as Disney's board begins two days of meetings in New York.
Gold played a key role along with Roy Disney in 1984 to save the company from a takeover attempt and install Eisner as chairman. He heads Shamrock Holdings, which manages Roy Disney's investments.
But Gold's role has been diminished over the past two years as he has become more of a critic of Eisner's performance.
Disney, 73, is the last family member active in the company, founded in 1923 by his uncle Walt and his father, Roy O. Disney, who was the business manager. He also is quitting as chairman of the company's animation division.
Disney has called for Eisner's resignation in the past, but the idea was rejected by the board. On Sunday, he sent a three-page letter to Eisner that criticized the chairman's leadership over the past seven years, according to The Wall Street Journal, which first reported the story.
"It is my sincere belief that it is you that should be leaving and not me," Disney told Eisner in the letter.
He accused Eisner of "muzzling" his voice on the board.
"Michael, I believe your conduct has resulted from my clear and unambiguous statements to you and the Board of Directors that after 19 years at the helm, you are no longer the best person to run the Walt Disney Company," Disney wrote.
His departure may have been a pre-emptive move, because the company said he is over the mandated retirement age of 72.
The board's presiding director, former Sen. George Mitchell, said in a statement Sunday he regretted Disney's actions and confirmed that the governance and nominating committee recently informed Disney that the age-limit rule, instituted last year, should apply to him.
A call to Roy Disney on Sunday was not immediately returned. A message also was left for Eisner.
Eisner is credited with transforming Disney from a producer of mediocre films and caretaker of two theme parks in 1984 into a media giant, whose holdings include five theme parks around the world, the ABC-TV network, the ESPN sports cable channel and one of the highest-grossing movie studios.
But Eisner has taken heat for what critics see as micromanaging leadership style. Detractors also accuse him of presiding over a "brain drain" that saw top executives leave the company over the past 10 years, including former studio chief Jeffrey Katzenberg, Steven Bollenbach, who now heads the Hilton Corp., and most recently Paul Pressler, who left last year to head Gap Inc.
Roy Disney's letter also blames Eisner for a loss of morale at the company and for causing a perception that the company "is rapacious, soul-less, and always looking for the 'quick buck' rather than the long-term value."
Disney's stock has fallen from more than $40 per share in 2000 to under $14 in 2002. The stock has risen nearly 34 percent since the beginning of the year as the company's fortunes have gradually improved. Disney shares closed at $23.09 at the end of trading Friday. In early afternoon trading Monday, it was up 6 cents to $23.15.
In September 2002, Eisner's plan for improving the company was unanimously approved by the board, but only after months of often bitter infighting among board members about the company's declining fortunes.
The plan included the most drastic changes in board membership since Eisner became chairman, such as bringing more independent members to a board that had long been criticized as having too cozy a relationship with Eisner. It also created the mandatory retirement age.
Since then, another vocal Eisner critic, Andrea Van de Kamp, was dropped from the board. Two other board members will not be re-nominated this year because of the age limit: 76-year-old Raymond Watson and Thomas Murphy, 77. Murphy was chairman and chief executive of Capital Cities/ABC until Disney bought the company in 1995.
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On the Net:
http://www.disney.com
AP-ES-12-01-03 1444EST
Perhaps acting independently, from outside the Boardroom, not hamstrung by a recently enacted Board policy barring Board members from communicating with shareholders and the media, I can have greater success in shaping the policies, practices and operations of Disney than I had as a member of the Board.That is a clear statement of his intention to campaign openly against Eisner and his compliant slate of directors with a competing slate. He's saying that he's going to go to institutional holders (banks, mutual funds) and the public with a message of, "Vote for this new slate if you think it's time for Eisner to go."
Not sure if he should blame himself, though he hired Eisner, but he's right about the lack of accountability.
Not likely. The leftists who control it will destroy it before allowing Disney to go back in time and reflect the values of mainstream America.
"This is yet another attempt by this Board to squelch dissent by hiding behind the veil of 'good governance.' "
Figures. It's just more leftist fascism. Basically, he's saying Disney's senior management is an elitist clique that is bleeding the company dry and sending it to ruin. He's right.
Wondering if he drastically reduced his life expectancy with that statement?
Hope this has a lot of blowback against Eisner.
Actually this was front-page news in the LA Times this morning, and on the inside page continuing the story, they ran Roy's letter in its entirety in a boldface sidebar.
More news...
And tell it we will.
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