What will happen after the meeting

[Peter Pirate]

I think Eisner will receive a rather large percentage of no confidence votes (probably 30%). I think the board will demand a succession plan (which I think Eisner already has) and the issue will (sadly) be over.

I then think Disney will make at least one major purchase to ward off the raiders. I still think Echostar would look tasty to Eisner.

How about you?

 

[raidermatt]

The Board might even go so far as to announce plans to separate the CEO and Chairmen positions. I think that, along with a succession plan will be enough to quiet some folks.

I'm not sure that will end it, however. If the succession plan involves Iger, I'm not sure that will do the trick. The little I've read about analysts take on him is that they like him, but aren't sure about his ability to run the whole enchilada.

Certainly there will be a faction that thinks Eisner is simply no longer the man for the job, the only question is if that group is large enough to push further action.

Then there's Comcast, who I'm still not convinced is ready to slink back into their hole. I think they, as well as anybody else looking to make a move, are waiting to see what happens at the meeting, and how Disney responds.

I don't doubt that Eisner has some acquistion plans up his sleeve in order to fend off a takeover. I'm just hopeful that investors will see these plans for what they truly are: Tactics to save a man's job, and not moves truly made in Disney's best interests.

Of course, there's probably a half-dozen other things going on that I haven't even touched on...

 

[hopemax]

The only thing I expect is that the board will announce that Eisner is stepping down as Chairman of the Board. They will point to this as a sign that they are listening to their shareholder's concerns about governance and splitting the CEO/chairman positions.

The rest, I haven't a clue. If Scoop's sources were accurate, the board on their own has been courting someone to replace Eisner. But they also wanted to make sure Eisner could leave gracefully. A graceful exit doesn't seem like much of an option now. The question will be can they come to terms on the golden parachute? Which makes the timing of the release of the Ovitz documents interesting. It could be an attempt to minimize the size of that parachute.

I imagine that there have been a lot of backdoor discussions with the fund managers to figure out how big of a liability Eisner really is. Some of them, have couched their public statements in concern about the governance, others have gone farther to state a lack of confidence in Eisner's management. If it's the former, Eisner could theoretically get a year's reprieve, and if the numbers are still good, he could make it through the end of his contract in Sep 2006. If it's the latter, and the board does have a replacement I would expect to hear something pretty soon. I think I read that there is a board summit at the beginning of April.

And this is all dependent on the other board members votes too. If others are feeling the hot fire on their feet too, they would have to act more swiftly, I'd think. And the larger the lack of support for the rest of the board, the wider the door for Comcast and others I'd imagine.

 

[TiggerFreak]

At what percentage of NO votes would the board be forced to completely remove Mr EI$NER ?

Is there a precedence(sp) for this happening?

If the "no confidence" vote of the shareholders were to exceed 50%, is the board required to remove someone?

Or is the board the Electorial College of Corporate America and not required to follow the "popular" vote?

 

[hopemax]

There isn't one. Well, a 100% NO vote would mean he wouldn't be re-elected as Chairman, but that's not going to happen. And the shareholder vote only concerns the board seat, not his CEO position. Eisner has a contract that lasts through September 2006. Breaking the contract will mean a huge payout to Eisner.

However, it's not in the company or board's best interest to keep someone around who has received a large NO confidence vote. AOL Time Warner's CEO, Steven Case, resigned after a 22% NO vote.

 

[TiggerFreak]

Can the board remove him from board, keep him in the CEO postion but somehow over-rule him on day-to day operating decisions untill his contract runs out.

Or would his contract address something like this and force a early dismissall/buyout?

 

[raidermatt]

They could separate the positions of CEO and Chairman of the Board, which is what some, like ISS, are calling for.

Its statements like those that bother me, because if gives the Board a possible out, without doing much harm to Eisner. Further, Hope is right that if the company continues to produce improving results, many critics are going to become far less vocal.

Problem is, with the economy improving, it wouldn't exactly take a genius to improve on the results of the last couple of years.

The Board could get more involved in the running of the company, but frankly, I don't think they are qualified to be CEO of Disney either, even if taken collectively.

Disney needs strong, definitive leadership, and an impotent Eisner would not solve any more problems than it causes.

I am hopeful that the call will be too large for the CEO/CoB splitting to quiet... I just don't know as this point, though.

 

[Peter Pirate]

If they split the positions, would it not make sense (from Eisners view) to hold onto the Chairmans job? He already has a favorable Board and at that spot he could still micromanage the CEO position could he not?

 

[YoHo]

But The CoB is a voted on position yes?

He couldn't simply choose which position to have.

 

[Peter Pirate]

Even so, with the current Board make-up, Eisner would be a shoe in for that job, if it's true that all (most) Board members are truly beholding to him...