US Pension Funds Demand Meeting With Disney Board

23 March 2004

The board of Walt Disney Company is under renewed pressure after institutional shareholders demanded a meeting with directors.

Representatives of six public pension funds have written to recently installed Disney chairman George Mitchell expressing their anxiety at the performance of the media mammoth.

"We remain deeply concerned that our investments and the future of this company are in jeopardy," they wrote. The pension funds are particularly concerned at the 20% drop in Disney's share value over the last five years.

Mitchell was appointed earlier this month after 43% of shareholders voted against the re-election of Michael Eisner as joint chairman/ceo [WAMN: 04-Mar-04]. However, the pension funds' demands show that many investors feel further steps are needed to improve performance.

The letter's signatories -- which include representatives from the pension schemes of New York, California, Ohio, Connecticut and North Carolina -- argue that a meeting with the board would show Disney was open to "a constructive dialogue regarding our mutual interests as fiduciaries and shareowner representatives."

Some investors have called for Eisner to be removed from the ceo post as well. However, Alan Hevesi, comptroller of New York state, said the pension funds had "explicitly agreed to give the company some time to improve its performance and not to ask for Eisner to be replaced at this time."

He continued: "Now is the time for Disney to be proactive, by detailing for shareholders the board's plan to improve performance and restore shareholder value."

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