Disney Settles Charges Over Directors' Pay

22 December 2004

Mickey's shareholders versus directors lawsuit may be taking its holiday break right now - but Walt Disney Company lawyers have been kept busy by the US Securities and Exchange Commission's investigations into undisclosed payments to relatives of a the company's directors.

Although the company admits no wrongdoing, it has agreed to settle with the SEC, not by way of a fine but by promising to behave itself in future.

The SEC found three adult children of three former non-executive directors each received annual payments of between $60,000 (€45k, £31k) and $150,000 from 1999 to 2001, a minor detail the company failed to mention until 2002.

Mickey' master also apparently forgot a $1 million payment to the wife of a director. And in an even more worrying lapse it emerged that the company failed to disclose payments made to Air Shamrock, owned by Walt's nephew, Roy Disney, and managed by another former director, Stanley Gold.

Says John Coffee, Columbia University law professor: "This adds to the general sense that this was a company with inferior corporate governance and a weak corporate board."

Mickey might agree.

Data sourced from Financial Times Online; additional content by WARC staff