Interesting from the Times of London

[Galahad]

September 16, 2002

Disney investors in call for Eisner to split role
From James Doran, Wall Street Correspondent



SHAREHOLDERS unhappy about the continuing financial troubles at the Walt Disney Corporation will tomorrow demand that Michael Eisner split his combined role as chief executive and chairman and start looking for a successor.
The shareholders, led by Herbert Denton, head of Providence Capital, an active investment company with a modest Disney holding, will meet in New York to discuss problems within the corporation.

Mr Denton would present any proposals agreed by the investors, who represent about 20 per cent of Disney’s capital, to the board. Mr Denton said: “They are at the beginning of a restructuring and renewal programme, and investors want to know how long it will take, who is going to implement it, and who is going to run the company after it is done.”

He will demand that Disney adopts corporate governance in line with the UK’s Combined Code. He said: “We have a ton to learn from the British regarding corporate governance. You have suggestions which are regarded as the rule, whereas here we have rules that are merely regarded as suggestions.”

Central to Mr Denton’s and his followers’ demands is a succession plan for Mr Eisner, 62, who has held the chairman and chief executive jobs at Disney for 18 years. Mr Denton suggested Mel Karmazin, president and chief operating officer of Viacom, the entertainment group, could be proposed as a replacement. He also wants the board cut back and re-formed. He said: “Disney needs heavy duty industrial types rather than educators and artists.”

Disney shares have fallen by almost 30 per cent in the past year. Visitors, scared by terror attacks, have stayed away from its theme parks. Disney’s ABC television network has also lost nearly a fifth of its viewers.

 

[jenfur]

I agree with most of it, BUT this one line disturbs me

“Disney needs heavy duty industrial types rather than educators and artists.”

I think Disney can't be successful without those educators and artist, it is what sets Disney apart and the lack of these is why Disney has suffered quality wise. If Disney had the quality, the money would come.

 

[DisLUV]

a good mix of indistry, educators and artist would be best... anyone disagree

 

[Luv2Roam]

I would rather have those than ME's life long buds.

 

[DisLUV]

a good mix of indistry, educators and artist would be best... anyone disagree

 

[Another Voice]

The educators and artists mentioned in the article weren’t the staff for Disney – the comment is about the people on the board of Directors. Currently the principal from the school where Michael Eisner’s children went (the “educator”) and Sidney Poitier (the “artist”) are on the board, as well as Eisner’s architect and several other people who have substantial business dealings with the company itself.

The long standing criticism of the board is that Eisner has stacked it with people who will be loyal to him personally instead of people who have the background and expertise to govern a $20 Billion company. Many, many , many people in Hollywood and Wall Street feel that an inexperienced board whose financial well being depends on remaining in the management’s good graces has resulted in a series of massive business blunders (ABC, Fox Family, Go.com) and highly questionable executive compensation packages (for example, Eisner was given three quarters of a billion dollars over the last decade while the stock price slide).

A Board of Directors is supposed to look out for the interest of the shareholders, not the hired help.

 

[Bob O]

Very good article. Lets hope it can be implemented and we can start the porcess of removing eisner!!!

 

[jenfur]

Thanks for th explaination