Risk & Compliance

Disney Dissidents Reaching Critical Mass

At Wednesday's annual meeting, no vote might be considered a ''no'' vote.
Stephen TaubMarch 1, 2004

This is going to be one tense annual meeting that Walt Disney Co. will conduct Wednesday in Philadelphia — even though the entire board is guaranteed to be re-elected.

No rival candidates are standing for election against Disney’s 11-member board, Reuters points out. Yet approximately 30 percent of shareholders are poised to withhold their votes, which would widely be interpreted as a “no” vote against chairman and chief executive officer Michael Eisner, according to the Associated Press.

Friday’s Wall Street Journal reported that mutual fund company T. Rowe Price has decided to protest against Eisner by withholding its vote. And on Friday, North Carolina Treasurer Richard Moore said in an interview on CNBC that he directed the state’s fund managers to withhold their votes from Eisner and from Disney board members who sit on the company’s audit committee, and to vote against retaining PricewaterhouseCoopers as auditor.

“We don’t think the corporate governance at Disney is right,” Moore said during the interview. “To continue to have these side agreements with an auditing firm after all we’ve been through these last couple years boggles the mind, the arrogance of it all. I don’t think we’re going to teach any of these old dogs any new tricks. It’s time for some change.”

And as we reported on Friday, pension fund Calpers announced that it intends to withhold votes for three board members on Disney’s audit committee because the company had authorized the auditor to perform an unquantifiable amount of non-audit services, such as tax examination assistance and other services regarding internal controls.

Late Friday, however, New York City’s pension fund’s opposed the trend by pledging support for Eisner. New York City Comptroller William Thompson said Eisner “remains the best choice to ensure the continued growth and success of this company,” according to Reuters.

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