Disney Dissidents End Bid to Oust Eisner

AP ^ | Dec 3, 2004

[Tumbleweed_Connection]

Two former board members of The Walt Disney Co., including the son of the company's co-founder, have ended their yearlong campaign to oust CEO Michael Eisner and force other changes at the media giant.

Stanley Gold and Roy E. Disney, son of Roy O. Disney and nephew to Walt, said Friday they would not run a challenge slate of directors at next year's board meeting. Friday was the deadline for filing an alternate slate.

The two said in a letter to board members that they have accomplished the goals set a year ago when they resigned from the board and called for the company to fire Eisner, who they blame for the company's lackluster performance since the late 1990s.

Gold and Roy Disney led a shareholder revolt that resulted in an unprecedented 45 percent vote against Eisner's re-election to the board last March.

In reaction to that vote, the board stripped Eisner of his board chairman responsibilities and split the roles of chairman and chief executive officer.

Earlier this year, the board also hired a search firm to replace Eisner, who said he would retire when his contract expires in 2006. The board has pledged to name a successor by June and Eisner has said he would not seek to be chairman of the board once he leaves.

The two dissidents said they assume the board "will continue to act in good faith to fulfill the promises it made to Disney stockholders over the course of the last nine months."

The two men expressed disappointment that the board had rejected recommendations for an independent board member from a group of state pension funds. They also said they were displeased that the board had rejected several shareholder proposals the two men had backed.

But they said that they were pleased with recent improvements in the company's performance. Disney's stock has risen in the past year as the company's earnings per share grew more than 50 percent.

"We are taking this Board at its word," the two men wrote. "We are hopeful that Disney shareholders will not be disappointed."

Shares of Disney fell 25 cents to close at $27.37 on the New York Stock Exchange; the shares fell another 7 cents in after-hours trade.

(SUBS 6th graf, `Earlier this...' to correct that Eisner has said he will not seek to be chairman of board, sted remain on board, once he steps down as CEO.)

[101st-Eagle]

And his evil reign continues...

[macbee]

Disney's problems are more than just Eisner. The Michael Ovitz hiring and dismissal (with a "platinum parachute" like few have ever seen) and the board's overall ineptitude (George Mitchell may have been an effective politician, but he's been a disaster for Disney) are just two signs of an organization which is sinking fast. If they don't find a way to patch things up with Pixar or Miramax (preferably both), Disney stock will retest 20 very soon.