Disney Refuses to Split Eisner's Role

25 February 2004

Walt Disney Company will resist pressure to separate the roles of chairman and ceo, both currently held by under-fire Michael Eisner.

The media mammoth is concerned that the issue could lead to an embarrassingly high vote against the Disney boss at the firm's annual meeting next month. It has therefore moved to reassure investors that it has been advised to keep Eisner as joint chairman/ceo.

Disney's presiding director George Mitchell revealed in a conference call that the board had consulted the company's corporate governance consultant, New York attorney Ira Millstein, who had advised that the roles should be split only "when transition occurs" (English translation: when Eisner leaves).

The move follows news that influential advisory firm Institutional Shareholder Services is unhappy at the joint chairman and chief executive position and is recommending that shareholders do not vote for Eisner at the meeting.

Disney fears that the ISS advice, on top of an ongoing campaign against the company's leadership by dissident ex-directors Roy E Disney (nephew of Walt) and Stanley Gold, could severely erode Eisner's support at the annual get-together.

Mitchell also dismissed concerns that Eisner had not fully consulted directors before rejecting the recent hostile takeover bid from cable giant Comcast [WAMN: 17-Feb-04]. He claimed the chairman/ceo had suspected beforehand that a bid was on the way and had discussed it with the board in advance.

That drew an icy response from Comcast. "We find it extremely troubling that Disney's board would have made up its mind to say no to our proposal before they even heard it," the cable group declared. "How could that possibly be in the best interest of Disney's shareholders?"

• Separately, Eisner's defence of his performance at Disney's helm has been bolstered by news the media giant has been named America's most admired entertainment company by Fortune magazine.

The closely watched poll gauged the views of 10,000 directors, executives and securities analysts. Behind Disney came Viacom, then News Corporation, Liberty Media, Clear Channel and Time Warner.

Data sourced from: multiple sources; additional content by WARC staff