BRERALEX
That's a wrap.
- Joined
- Mar 8, 2001
- Messages
- 917
Roy Disney Calls for Disney Meeting Protest Vote
Tue Jan 27, 8:30 PM ET - Reuters Industry
By Peter Henderson
LOS ANGELES (Reuters) - Walt Disney Co. founding family heir Roy Disney took his protest campaign against management of the entertainment giant to shareholders on Tuesday, urging them to vote against the reelection of board Chairman Michael Eisner and three other directors.
The company, meanwhile, said that it was talking to the U.S. Securities and Exchange Commission (news - web sites) to settle allegations that it did not properly disclose payments to some directors and their families in 2001, including payments to Roy Disney for use of his corporate jet.
Meanwhile Eisner, in his annual letter to shareholders, also released on Tuesday, described a company on the mend after an economic downturn, with fourth quarter 2003 profit more than doubling from a year earlier.
Eisner's pay package rose 20 percent to $7.3 million last year, a period when Disney stock soared, the company disclosed. Roy Disney has criticized high management pay packages and poor stock performance over the last eight years.
But shares are up more than 40 percent in the last 12 months alone, one reason analysts say Disney and Gold may have a hard time leading a shareholder insurrection.
Disney's board candidates are sure to keep their seats, since they have no competitors. But Roy Disney and ally Stanley Gold said in an open letter ahead of the company's March 3 annual meeting that investors could pressure the board to change by staging a symbolic vote of no confidence.
"By withholding your vote from these four directors -- who we believe are representative of what is wrong at Disney -- you will force the board to recognize the widespread conviction that serious changes in both senior management and the board are necessary," the letter said.
Disney company spokesman John Spelich said shareholders would not follow the advice of the pair.
"We trust and respect our shareholders to distinguish truth from fiction. This letter is full of factual errors deliberately designed to mislead the shareholders," he said.
Disney and Gold asked shareholders to vote against Eisner, who is also chief executive, along with former Maine Sen. George Mitchell, Judith Estrin and John Bryson.
"They symbolize, respectively, the poor management, poor governance, poor compensation practices, and lack of board independence," the two said.
They criticized Mitchell, the board's presiding director, for supporting new corporate governance rules that the company calls a hallmark of reform, but which they dismissed as "more form that substance."
Estrin should be voted off the board because she had supported "excessive" compensation for management and Bryson for helping to oust Roy Disney, they said.
The company said the proposed agreement with the SEC regarding disclosure of payments to relatives of board members and a former director would include the issuance of a "cease and desist" order.
Roy Disney resigned before being forced into mandatory retirement, for which he had expected an exception.
Gold also resigned in November, accusing Eisner of failing to revive growth at the company and charging that the board had failed to hold management accountable.
The protest vote campaign is the most concrete action Disney has taken since stepping down, although he has frequently and publicly criticized Eisner.
Ironically, Roy Disney, who is the nephew of founder Walt Disney, and Gold engineered Eisner's recruitment 20 years ago, when the Disney family had a much larger stake in the company.
Tue Jan 27, 8:30 PM ET - Reuters Industry
By Peter Henderson
LOS ANGELES (Reuters) - Walt Disney Co. founding family heir Roy Disney took his protest campaign against management of the entertainment giant to shareholders on Tuesday, urging them to vote against the reelection of board Chairman Michael Eisner and three other directors.
The company, meanwhile, said that it was talking to the U.S. Securities and Exchange Commission (news - web sites) to settle allegations that it did not properly disclose payments to some directors and their families in 2001, including payments to Roy Disney for use of his corporate jet.
Meanwhile Eisner, in his annual letter to shareholders, also released on Tuesday, described a company on the mend after an economic downturn, with fourth quarter 2003 profit more than doubling from a year earlier.
Eisner's pay package rose 20 percent to $7.3 million last year, a period when Disney stock soared, the company disclosed. Roy Disney has criticized high management pay packages and poor stock performance over the last eight years.
But shares are up more than 40 percent in the last 12 months alone, one reason analysts say Disney and Gold may have a hard time leading a shareholder insurrection.
Disney's board candidates are sure to keep their seats, since they have no competitors. But Roy Disney and ally Stanley Gold said in an open letter ahead of the company's March 3 annual meeting that investors could pressure the board to change by staging a symbolic vote of no confidence.
"By withholding your vote from these four directors -- who we believe are representative of what is wrong at Disney -- you will force the board to recognize the widespread conviction that serious changes in both senior management and the board are necessary," the letter said.
Disney company spokesman John Spelich said shareholders would not follow the advice of the pair.
"We trust and respect our shareholders to distinguish truth from fiction. This letter is full of factual errors deliberately designed to mislead the shareholders," he said.
Disney and Gold asked shareholders to vote against Eisner, who is also chief executive, along with former Maine Sen. George Mitchell, Judith Estrin and John Bryson.
"They symbolize, respectively, the poor management, poor governance, poor compensation practices, and lack of board independence," the two said.
They criticized Mitchell, the board's presiding director, for supporting new corporate governance rules that the company calls a hallmark of reform, but which they dismissed as "more form that substance."
Estrin should be voted off the board because she had supported "excessive" compensation for management and Bryson for helping to oust Roy Disney, they said.
The company said the proposed agreement with the SEC regarding disclosure of payments to relatives of board members and a former director would include the issuance of a "cease and desist" order.
Roy Disney resigned before being forced into mandatory retirement, for which he had expected an exception.
Gold also resigned in November, accusing Eisner of failing to revive growth at the company and charging that the board had failed to hold management accountable.
The protest vote campaign is the most concrete action Disney has taken since stepping down, although he has frequently and publicly criticized Eisner.
Ironically, Roy Disney, who is the nephew of founder Walt Disney, and Gold engineered Eisner's recruitment 20 years ago, when the Disney family had a much larger stake in the company.
