Eisner: Big Investors Start to Distance Themselves

26 February 2004

Michael Eisner, embattled chairman/ceo of the Walt Disney Company, needs all the allies he can get in the run-up to the company's annual shareholders meeting next Wednesday in Philadelphia.

He will seek re-election at the meeting, normally little more than a rubberstamping exercise. This time, however, stockholders are beginning to mobilize against him -- and not just the dissident former directors Roy E Disney and Stanley Gold [WAMN: 25-Feb-04].

Yesterday Eisner suffered a severe double-whammy when Calpers (the California Public Employees' Retirement System) said it will withhold its votes for his re-election; and independent research firm Glass Lewis recommended that shareholders withhold votes to re-elect Eisner and co-directors George Mitchell and Gary Wilson.

Calpers, with 9.9 million shares, is Disney's 29th-largest shareholder. Says its president Sean Harrigan: "We have lost complete confidence in Mr Eisner's strategic vision and leadership in creating shareholder value in the company."

Similar sniping came from the Glass Lewis research report: "The Disney board has been notoriously insular, famously gullible and blindly loyal to Mr. Eisner. In our view, Disney's board has come a long way but not far enough."

These remarks echo those of another independent advisor, Institutional Shareholder Services, which two weeks ago recommended stockholders to withhold their votes from Eisner on grounds that he "still hasn't gotten it quite right." This recommendation, said ISS, should be seen as "a signal to try a little harder."

Data sourced from: USA Today; additional content by WARC staff