'Sir Thomas Moore' Demanded Pay Parity With Eisner

17 November 2004

"Money couldn't buy friends but you got a better class of enemy," wrote the much-loved anarchic British comedian and scriptwriter Spike Milligan.

And for the star players in the Disney shareholders versus Disney board saga, currently wowing 'em in a crowded Delaware courtroom, Milligan's maxim is a Tinseltown truth.

With his name glittering above the main credits, star defendant and ceo of the Walt Disney Company, Michael Eisner, finally walked onto the set as as the supporting players faded into the background.

He was asked by his attorney whether he once considered ousted Disney president Michael Ovitz as his "best friend" as claimed in one of the latter's more emotional takes.

"We're talking semantics here," replied Eisner. "Michael Ovitz had a lot of best friends. Michael Ovitz was a salesman, is a salesman … I was a good friend. I was a reasonable friend. I liked his wife. I was amused by him. ... He was one of my friends."

The relationship between two of Hollywood's most ruthless operators is fundamental to the plaintiffs' case - already dubbed Shark Tale II by media cynics. Angry shareholders contend that the hiring of Ovitz in 1995 and his firing fourteen months later with a $140 million (€108.16m; £75.76m) severance package - was a monumental sweetheart deal.

They also argue that Disney's officers and board failed in their fiduciary duty by not scrutinizing the deal in sufficient depth. For which alleged transgressions the plaintiffs seek compensation.

Eisner refuted suggestions that he kept the Ovitz cards close to his chest, leaving the rest of the board 'out of the loop'. He insisted he kept the board informed of events at the company on a near-constant basis - even pausing board meetings to "do at least a one-hour stream-of-consciousness fill-in" on everything from the Disney theme parks to the movie studio.

Possibly noting the punch-drunk state of the board, Eisner later switched to writing a monthly three to five page letter, not only to board members but also major shareholders like Warren Buffett, Sid Bass, and his own wife, Jane.

We return to 1994: calendar pages - the days, weeks and years - flutter in the breeze as the scene dissolves to medium-close shot of hospital room, a phalanx of medics and anxious wife clustered around bed. Camera slowly zooms to extreme closeup of Eisner's face as he awaits quadruple-bypass surgery. His lips move; the onlookers strain to catch his whispered words.

"With the preface that I was between my angiogram and my bypass, and floating on morphine probably," Eisner tells his wife and a son that if anything were to happen to him, Disney should turn either to Ovitz or Eisner's longtime mentor, the media and studio tycoon Barry Diller.

But happily this was unnecessary. Eisner made a full recovery and returned to his [then] dual role of Disney chairman and ceo. Shortly afterward, he tried to lure Ovitz into the Disney fold for the second time. Ovitz, he described as a "kind of man for all seasons" who shared Eisner's own interest in "architecture and other subjects".

But preliminary talks with this latter-day Sir Thomas Moore faltered when Ovitz demanded to be named co-chairman, an arrangement Eisner believed would not work: "It really is not an efficient way to run a company," he opined.

One year on, facing a massive increase in his workload with the impending takeover by Disney of Capital Cities/ABC, Eisner again sought Ovitz' services. This time he succeeded: Ovitz dropped his claim to share the chair, instead demanding "parity" with Eisner in terms of salary, bonus and perks.

It is not recorded whether he fulfilled this fiscal ambition but the package was sufficiently tempting to induce Ovitz to clock-on at the Mouse Factory.

But Ovitz should have read his Mickey and Donald pop-up history book. In which he would have learned that Sir Thomas Moore fell foul of 'best friend' King Henry VIII who proceeded to lop the head from his uncooperative Chancellor.

There the literal similarity ends. Fourteen months later Ovitz also took the long walk, retaining not only his pate but also the record payoff that has so outraged the Disney shareholders.

Data sourced from Wall Street Journal Online; additional content by WARC staff