Posted on 03/14/2003 11:18:48 AM PST by GeneD
Friday, March 14, 2003 - Entertainment giant Walt Disney Co. arrives in Denver next week for its annual shareholders meeting - a move its critics say is intended to avoid angry stockholders.
Mickey Mouse, Goofy and other Disney characters will greet shareholders Wednesday as they enter the Colorado Convention Center, the site of Disney's meeting.
Inside, huge television screens will tout images from Disney's famous subsidiaries: ABC television network, ESPN cable network, theme parks, Miramax films and Pixar animators, all of which helped Disney generate $25.3 billion in sales last year.
Yet one piece of technology will be missing: a live webcast so that other stockholders can view the meeting. That means the stockholders either must trek to Denver, send a proxy or not participate.
"Disney is all bells and whistles," said Scott Klinger, a member of Responsible Wealth, a group dedicated to what it calls shareholder reform.
"No offense to Denver, but it is not the most convenient location to get to," Klinger said. "Disney had a lousy year. And whenever a company has a lousy year, they make it hard for shareholders to get to their meeting."
Disney officials declined interview requests regarding its upcoming meeting. A spokeswoman said various news releases previously released by Disney addressed some of the issues.
In the past, Disney said it hosts its annual meetings in various cities because it is a global company and is attempting to reach shareholders in different parts of the country.
Disney's last fiscal year was among its bleakest in a decade. War and terrorism jitters kept visitors away from its theme parks in droves. Its ABC television network has weak ratings.
The company's stock price has lagged, closing Thursday at $16.20, down from its 52-week high of $25.17, and its credit rating has been downgraded. Operating income fell 33 percent, to $2.8 billion.
Disney is also battling a multimillion-dollar lawsuit with the company that owns the trademark for Winnie the Pooh character. That company is suing Disney for billions in unpaid royalties.
Disney shareholders and analysts are particularly interested in another Disney icon: chief executive officer Michael Eisner.
Disney's board has been criticized for years as a weak body controlled by Eisner. Business Week named the board the worst in America in 1999 and 2000, and Eisner regularly turns up on lists of the country's highest-paid CEOs. In 1998, he made about $576 million, largely by exercising stock options.
One Eisner critic calls his rule at Disney as "increasingly Nixonian in his paranoia and isolation," said Kim Masters, author of "The Keys to the Kingdom: How Michael Eisner Lost His Grip." (William Morrow, 2000).
"Everybody in this town thought Michael would not last past January," Masters said, who lives in Los Angeles.
"But he defies gravity. With all the moguls who have gone down in the past year or so, he seems impossible to replace," she said.
Eisner's control of the board may increase after the Denver meeting.
When Walt Disney Co. shareholders elect board members this year, it will not renominate Eisner's sharpest critic, Andrea L. Van de Kamp.
Van de Kamp, a successful Southern California businesswoman and chair of Sotheby's West Coast, is among four directors getting the boot from the Disney board. Disney is shrinking its board from 17 to 13 members.
Van de Kamp has made repeated statements in the past that she believes she was removed because she often criticized Eisner during board meetings.
Disney responds that it is making the changes because of the post-Enron environment that demands smaller boards provide more effective oversight.
One local Disney shareholder, Boulder resident Brad Armstrong, will introduce a measure to limit executive pay and link it more closely with company performance.
Disney stock has trailed the broader stock market for almost a decade. Since 1996, Disney's stock has declined 22.6 percent, compared with a 46.4 percent return for its self-designated peer group, listed in the company's proxy statement. The S&P 500 index rose 44.1 percent over the same period.
Similar measures have been introduced over the past three years at Disney shareholder meetings, and none have come close to passing.
Well, that's one way to convince the shareholders. "Hi folks, I'm Mickey and everything is fine! And here's my life's companion, Goofy!"
The axe is out for Eisner, and it's way past due.
TRANSLATION: "Shareholders don't have the money to catch a flight there"
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