Payment to Ovitz Was ‘Stupid’, Admits Ex-Disney Director

05 November 2004

The Ovitz/Disney/Eisner epic continues to enthral audiences as the sizzling tale of love, ambition, moolah and family values moves inexorably toward its climax in the Georgetown, Delaware courtroom.

Aldrich, Coppola and Spielberg are said to be battling it out for the screen rights - although some movie buffs insist that only the great Walt himself (were he still with us) could do justice to the saga.

On Wednesday, the plot took an unexpected twist - self censure. Sackcloth and ashes were donned by Irwin Russell, a former director of the Walt Disney Company who oversaw the compensation negotiations when Michael Ovitz was hired as group president in late 1995.

Seemingly basing his characterization on a mix of Forrest Gump with Chauncey Gardner, Russell admitted culpability for recommending a $7.5 million (€5.87m; £4.07m) performance bonus for Ovitz on December 10 1996, just days before he was ejected with the now notorious mega-payoff.

"How could you expect people to understand granting someone a bonus one day and firing him the next day?" asked Russell rhetorically.

Switching to auto-answer, he replied that the company had done well and other executives were getting bonuses. Ovitz had worked hard and diligently, though not always effectively, "but I thought it was the appropriate thing to do."

Ten days later a board meeting overruled the bonus, a decision that provoked Russell into another bout of honesty: "On reflection," he said, "it was a stupid recommendation on my part."

He continued: "People had completely misinterpreted the press reports [of Ovitz walking the platinum plank]. It looked like we had paid him a huge amount of money to leave the company."

Russell told his rapt audience that after the firing he tried to set the record straight by writing to the Wall Street Journal. The letter was submitted conditionally with a "without editing" proviso. The WSJ declined to accept the condition, replying that "they did not think it appropriate".

The scenario then soared into the realms of fantasy - Gordon Gecko morphing into Bilbo Baggins - as Russell described the ousting of Ovitz.

According to Russell, the former Hollywood agent, famed for his ruthless bargaining skills, plead to remain on the Disney board, retain an office and staff on company premises, act as a paid consultant, keep his company BMW, and buy back an aircraft he had sold to the company.

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