Risk & Compliance

Another Rumpus at Disney Annual Meeting

Roy Disney and Stanley Gold, who publicly campaigned last year for the removal of Michael Eisner from Disney's board and executive suite, fired off...
Stephen TaubFebruary 10, 2005

After implementing a series of corporate governance changes and reporting strong financial results in some of its units, the Walt Disney Co. seemed headed toward an uneventful annual meeting tomorrow.

Uneventful, that is, until Roy Disney and Stanley Gold — who publicly campaigned last year for the removal of Michael Eisner from Disney’s board and executive suite — fired off a combative press release earlier this week announcing that they will withhold their votes for all directors.

In their statement, Disney and Gold stressed that they “have not conducted a campaign to ask other shareholders to do the same.” Nonetheless, the announcement will certainly reverberate among many other company shareholders.

The two individuals acknowledged the governance changes that the company has instituted since March 2004, but “the litmus test” of the board’s reforms, they maintained, “is how it conducts and implements the search for Mr. Eisner’s successor.” They added their concern about reports that the board has yet to interview a single outside candidate.

Calpers also announced that it plans to withhold its vote for Eisner. On the pension fund’s website, it explained that “Calpers believes the company is in need of new leadership…. Consistent with our vote last year, Calpers has lost confidence in Mr. Eisner’s ability to contribute to long-term shareowner value.”

Last week, proxy research firm Glass Lewis recommended that investors withhold their votes for chairman and former senator George Mitchell. The company acknowledged the strides Disney has taken toward improving its governance, but Glass Lewis pointed out the same reservations about Mitchell that it raised last year — that he has a conflict of interest for receiving consulting fees on several boards where he served as a director, including Staples Inc.

On the other hand, Institutional Shareholder Services endorsed all of Disney’s board nominees, asserting that the company has taken many positive steps since last year’s acrimonious annual meeting.