small blurb on ME's bonus:

[stanley]

Ultimatly, why should ME care about anything anyone else says or thinks. The money is in his pocket, not ours. You know the old phrase, "laughing all the way to the bank" or "sticks and stones"can fit here. Casey Stengel always said the secret of being a good manager was just keeping the 13 guys that hate you away from the 12 that just don't like you. ME might have been successful (though one tends to think it was really his supporting cast that saved the company) at one time but he has adopted the purvasive atmosphere of everyday life in this country which obviously doesn't care about winning or producing quality anymore, as long as you get paid!

 

[Golter]

He has more money than he could ever spend, the money is not an issue to him, he likes his job and wants to succeed.

" (though one tends to think it was really his supporting cast that saved the company) " He is the leader of the supporting cast, they get their direction from him.

Since he took over the adjusted price of disney stock about $1.00 its trading at about $17.50 that over a 15% return over a 20 year period thats phenominal.

All stocks were overpriced from 1995 - 2000, they are now adjusting back to their correct values.

It will continue to grow at high single digits.

 

[sgtdisney]

Originally posted by Golter
(though one tends to think it was really his supporting cast that saved the company) " He is the leader of the supporting cast, they get their direction from him.

What kind of leader tells everyone that they need to tighten their belts and put up with less and then turns around and takes a 5 million dollar bonus. If money really wasn't the issue with ME, he would have at least said something along the lines that although he is entitled to a 5 mil bonus in his contract he will put it back into the company as a gesture of good will to the employees he has cut. Don't get me wrong, I have nothing wrong with being compenstated for your job, but Disney (Eisner) has made a slew of bad business decisions in the last few years costing the company as a whole a lot of money. To get rewarded for that kind of performance is laughable. From internet portals to the purchase of ABC, to purchasing aircraft and leasing them back to United and USAir, bad decisions costing our company a lot of money. The worst part is, the most successful part of the company, theme park and resort operations, is suffering because of this mistakes in other areas.

 

[raidermatt]

He has more money than he could ever spend,

When has this ever stopped anyone?

If true, why take the bonus?

the money is not an issue to him,

Again, what makes you believe this?

he likes his job and wants to succeed.

Define succeed.

He is the leader of the supporting cast, they get their direction from him.

Yes, and the creative output from that ever-changing supporting cast has been falling in quality and appeal.

Since he took over the adjusted price of disney stock about $1.00 its trading at about $17.50 that over a 15% return over a 20 year period thats phenominal.

Since 1984, Dis has slightly outpeformed the Dow. However, a closer look shows that since 97, Disney has grossly underperformed vs. the Dow. (Go check out an "all-data" chart at CBS Marketwatch)


As for the earnings, yeah, it was a good improvement from 1Q '02. But what nobody seems to remember is that 1Q '02 was Oct-Dec of 2001. The three months immediately following the 9/11 attacks. The theme parks were described as ghost towns during most of this period. I don't see how Disney could not have improved over that quarter.

 

[Another Voice]

I was just wondering how many people lost their jobs so that Michael Eisner could “reward” himself with yet another bonus. All those Disney Store cast members, all those maintenance people, all those animators – all those customers that won’t be helped, all those guests waiting for yet another broken-down attraction, all those films that won’t be created.

I suspect that right now e-mails are flying around Disney’s e-mail system highlighting Eisner’s bonus in terms that people can understand – the amount of money he “earned” while eating lunch, the weight of his bonus in dollar bills, the acreage of gold plating he could purchase. It started years ago and it used to be funny. Now it’s simply getting depressing.

Morale is important in a company and is even more so in a creative company. Disney has survived many rough times in the past (far, far, far worse than the economics of today) yet was always able to pull through because of the people. They sacrificed, they worked harder, they endured to turn the company around. In large measure it was because their boss did so too. Walt did not take a salary during WWII, he sold his life insurance policy to fun Disneyland, and he was a minority stockholder in the company that bore his name.

No employee willing sacrifices simply so the boss can grow even more obscene. The drive to see Disney through these tough times no longer exists within the company. Lowered standards leads to lower effort that results in even lower quality. To paraphrase, it’s not the economy – it’s the product.

Even a small business owner must understand that greed does not create. Greed does not build. Greed does not insure the future.

Disney desperately needs a future.

 

[Golter]

Originally posted by raidermatt





Since 1984, Dis has slightly outpeformed the Dow. However, a closer look shows that since 97, Disney has grossly underperformed vs. the Dow. (Go check out an "all-data" chart at CBS Marketwatch)


Since 1997? Thats a 5 year window. DIS in not a get quick stock, you must buy and hold as with anyother blue chipper. If your investing timeframe is 5 years, DIS is not the right stock. It is a solid performer and a steal at 17.50. Buy it and hold it for 10 years or so and you will be very pleased.

 

[All Aboard]

Golter, it's becoming harder and harder to believe you are not simply a company shill. Forgive me if you are not, but it's hard to fathom the motivation for writing the way you do. Do you know Michael Eisner personally? Your posts are filled with "watch and sees" and "attaboys". We sometimes speak in terms of rose colored glasses, but I'm struggling to define the tint of yours.

Seriously, this is not a personal attack. I'm just at a loss as to why you are defending Eisner with such zeal.

Buy it and hold it for 10 years or so and you will be very pleased.

If Eisner steps down, maybe.

 

[Golter]

I'm not defending ME as a person, I don't know him. I just trying to point out that running a company like DIS is extremely difficult and many things are completely out of the control of the CEO. We have not gone through economic times like this is 20 years, we have never expierence anything like 9/11 before. It is easy to "monday morning quarterback", but he does not have that luxury.

I just think that if you truly look at DIS from a business standpoint it is in a good position and many analysts agree.

 

[raidermatt]

Since 1997? Thats a 5 year window. DIS in not a get quick stock, you must buy and hold as with anyother blue chipper. If your investing timeframe is 5 years, DIS is not the right stock. It is a solid performer and a steal at 17.50. Buy it and hold it for 10 years or so and you will be very pleased.

If I bought 10 years ago, I would have done no better than the Dow.

That said, I do think the stock is a good value because of the assets behind it, mainly the parks/resorts. However, current management has proven incapable of getting the most out of those assets, and they are not continuing to create new assets that are on a par with the old.

So I hold, but I cut no slack for the lost opportunities.

I just trying to point out that running a company like DIS is extremely difficult and many things are completely out of the control of the CEO.

Very true, it is difficult. Nonetheless, whoever accepts the responsibility must be up to task. Many things are out of the CEO's control, but many things are also WITHIN his control, and its those things on which I base my judgement.

It is easy to "monday morning quarterback", but he does not have that luxury.

No he doesn't, but he is responsible for getting it right in the first place. As they say, can't stand the heat....

 

[manning]

The Jan 20 Fortune magazine mentions that Disney will write off $114 million for the fourth qtr on United Airlines airplane leases. I wonder what the figures will be for the five planes with Delta and the two with FedEx. The article says Disney's value of leasing arrangements is .3 billion dollars.

Another example of drifting away from your core business.

One sigh of good leadership is to set an example. In this case if your employees and shareholders are bleeding financially the leader should bleed financially. You share in the good times and the bad times.

If Eisner cared for this company he should consider working for free for the next couple of years. It won't hurt him. You won't see him driving around in a Ford, unless it is a Jaguar!

 

[doubletrouble_vb]

While one would think that putting the paltry $5 million dollar bonus back into the company would be a nice goodwill gesture there is a problem. The media generally interprets that as taking a stand that things will change...if you are not prepared to take the stand because you don't have any ideas you have to take money.

 

[Another Voice]

"The Jan 20 Fortune magazine mentions that Disney will write off $114 million for the fourth qtr on United Airlines airplane leases."

This tells you everything you need to know about Eisner's confidence in Disney. A hundred million would have made one big E-ticket attraction in a park or one great big movie or a refit to a lot of aging Disney stores.

Yet Eisner figured the returns would be higher by investing in someone else's business rather than his own. Think about it.

It must be that kind of business insight which justifies such a bonus.

 

[Luv2Roam]

I have seen this with other good companies. (Who turned into dionosaurs and were actually bought *cheap* by business standards in the long run.)
The top management milking the cash cow dry. Greed ahead of progress.
I think the bottom line of what we all see is sad is where Disney could have been. They were once THE top contender in family entertainment. Their name still brings in the interest and dough. But nothing like before.
If we all really thought ME earned this bonus, I don't think any resentment would be showing here. I feel it would be better to divide ME's bonus between CM's, and give ME no extra $.
There is so much to fix at this point.

 

[cristen]

Hi everyone, I have never posted on this board before, but I read all the time. I love your discussions! I thought this one was interesting & found this on Forbes. I am not sure if anyone has seen this, but it ties in with what you have been talking about. Cristen


People
Michael Eisner: Mouse In A Gilded Mansion
Betsy Schiffman, 04.26.01, 6:30 PM ET

NEW YORK - Michael Eisner ought to be happy in the Magic Kingdom: Money has poured into his pockets since he was appointed chairman and chief executive of Walt Disney 17 years ago.

During the last five years, Eisner, 59, made $737 million. That's about 19 times the $38 million made by the average CEO on Forbes.com's First Annual CEO Value Survey. And while Eisner's personal income grew during that time, Disney's five-year net income shrank an average of 3.1% yearly. The average company included in the survey grew its net income by 19% over the five-year period.



Eisner hasn't always been an overpaid suit. Coming from Paramount Pictures in 1984, he was hired to give struggling Disney (nyse: DIS - news - people) a jump start. Not only did he do that, he turned the company into a media powerhouse. Under Eisner's management, Disney acquired ABC in 1995. Disney also grew its market capitalization from less than $2 billion back in 1984 to about $61 billion today.

But Eisner's reign hasn't been without hiccups, and his compensation has long been a bone of contention with investors.

Now he has the reputation of a guy that can't play well with others. After his right-hand man, Disney President Frank Wells, died in a helicopter crash in 1994, Eisner tore through several high-profile executives. Former Disney studio head Jeffrey Katzenberg (now of DreamWorks) sued the company for what he claimed was owed him as part of his contractual agreement. Disney finally settled for a reported $250 million. In an equally unfortunate move, Eisner hired longtime friend and Hollywood power broker Michael Ovitz to replace Wells. Ovitz lasted in the position for about one year and ended up costing Disney roughly $90 million in severance.


Disney's Michael Eisner




However investors feel about Eisner's reign and sky-high compensation, insiders say he's fairly safe from the board's wrath.

"The board is a bunch of Eisner cronies," says one analyst who declined to be named. "They're all handpicked by Mr. Eisner so that his decisions don't go challenged."

They may be Mr. Eisner's friends, but they aren't friends to investors

 

[cristen]

I also found this, the site actually has graphs & stuff. If you want to look at it, it is just Forbes.com, then I typed in Michael Eisner.

458 Michael D Eisner
has been CEO of Walt Disney (DIS) for 18 year(s). Mr. Eisner has been with the company for 18 year(s) . The 60 year old executive ranks 25 within the Entertainment & information industry on this year's list.

Education
College: Denison University BA ' 64
Graduate School:


Pay Vs. Performance Grade: F Walt Disney's
6-Year Annual Total Return (%) 2
Mr. Eisner's
6-Year Average Compensation $123,119 thou 6-Year Return Relative to Industry 88
6-Year Return Relative to Market 92
Walt Disney
(DIS: quote, news, events, executives)

500 South Buena Vista Street
Burbank, CA 91521-0301

ph: 818-560-1000
fax: 818-560-1930
http://www.disney.com

Industry Medians
stock owned (% of co) 0.65 0.33
stock owned ($mil) 308.5 42

total return during tenure 19
relative to market 104


< Previous Next >



Associated Companies:
Walt Disney On Forbes 500s 2002

Other Lists:
Eisner, Michael D # 14 on Best Paid CEOs 2001 , # 16 on Best Paid CEOs 2000 , # 1 on Best Paid CEOs 1999 , # 386 on 400 Richest Americans 2002 , # 361 on 400 Richest Americans 2001 , # 354 on 400 Richest Americans 2000 , # 372 on 400 Richest Americans 1999

People Lists:

100 Top Celebrities 400 Richest Americans World's Richest People Best Paid CEOs Midas China 100 Methodology:

 

[Sarangel]

Cristen -

Thanks for the articles & welcome to the DIS Rumors & News, it's always good to have a fresh viewpoint.

Sarangel

 

[tarzanman]

Do you ever wonder what kind of management team it takes to run a company with a $60 Billion market cap?

I would say that Eisner and his team have a done a good job surviving. At least he is sticking it out. I look at a bunch of other big companies that are having much bigger problems than DIS and paying their guys more.

AOL/Time Warner
$45 Billion Market Cap
Stock 1999 - $90/share
Stock 2003 - $10
CEO Salary 2002 - Steve Case and Gerald Levin bailed after signs that the merger was failing. $1.2Mil each plus options. Levin's currently equal to $100Mil. Jonathan Miller is picking up the pieces and his salary is believed to be $2Mil plus options.

Note: Eisner's $1Mil salary plus $5Mil in options(which don't get reported with all other company expenses) are a lot less than these guys that bailed. Eisner is at least turning things around with DL and ABC.

AT&T
$14 Billion Market Cap
Stock 1999 - $300 (Market Cap was almost /$100Billion)
Stock 2003 - $17.50
CEO Salary 2002 - Michael Armstrong took a $6Mil salary and an undisclosed amount of options.

Vivendi Universal
$16 Billion Market Cap
Stock Sept 2000 (IPO) - $14.81
Stock 2003 - $15.10
CEO Salary 2002 - Jean Marie Messier took $5.5Mil US last year plus options.

Sony Corp. of America
$35 Billion Market Cap
Stock 1999 - $110
Stock 2003 - $38
CEO Salary 2002 - Howard Stringer $3.2Mil plus undisclosed options.

After looking at all this, considering how well Disney did in 2002, I would say that Eisner's salary and options were right on par or even low when compared with some of the largest companies in the world. There is obiously a recession.

 

[raidermatt]

Do you ever wonder what kind of management team it takes to run a company with a $60 Billion market cap?

It takes a good one.

Disney's market cap sits at approx $32.5 billion, not $60 billion.

Since you focused on recent Disney performance... Disney's stock has under-performed vs. both the S&P and the Dow over the last year. That is true even after Disney's 7% climb after their 1q earnings call.

The issue with Eisner's $5 million bonus is not just that $5 million. The issue is the $700+ million over the last 5 years, while Disney's stock has underperformed against the major indexes. That means the stock is not even "average".

 

[Bstanley]

I've heard the "$700M over the last 5 years" line tossed about quite a bit recently and I've got some questions about it.

Obviously the majority of this money is not The Big ME's salary. The majority of it is the monetary value of the Disney stock that he sold.

Now here's the questions:

1) Is $700M the PROFIT on the stock or the TOTAL of what the stock sold for?

2) Of the amount that was profit on the stock - when was he granted the options on the stock that was sold?

I mean if the guy was granted options in 1990 and he sold the stock in 1998 making a giant profit in the process it's a lot different situation than if he made $100M a year on the options he was granted from 1998 until now...

Anyone know more of the details?

 

[tarzanman]

ME's total net worth is now figured to be around $540 million. So most of those options were probably tied into Disney stock. That doesn't seem so bad. It is not like he took all those options and just sold out of them.