R. Disney and S. Gold Call Action By Disney Board A Blatant Rejection of Shareholder
Roy Disney and Stanley Gold Press Release
Roy Disney and Stanley Gold Call Action By Disney Board A Blatant Rejection of Shareholder Will and Significant Step Backwards for Governance Reform in America
BURBANK, Calif., March 4 -- Roy Disney and Stanley Gold today called the decision by The Walt Disney Company Board of Directors naming George Mitchell as Chairman, while allowing Michael Eisner to remain CEO, "a blatant rejection of shareholder will, a betrayal of trust and a significant step backwards for substantive governance reform in America's capital markets."
"The unprecedented 43% No Confidence Vote on Michael Eisner is a sharp rebuke to his continued leadership," Messrs. Disney and Gold said. "More importantly, for the Board to endorse a lame duck CEO that shareholders have repudiated is untenable for the Company, its shareholders, its employees and its business partners. Good corporate governance mandates that Boards listen and be responsive to their shareholders. The Disney Board has minimized the message sent by their shareholders."
"This Board just doesn't get it. Once again, we see half measures, cosmetic changes and poor choices," Messrs. Disney and Gold continued. "Apparently, they think they can just ignore the 24% No Confidence Vote Mr. Mitchell received from the company's shareholders, which clearly demonstrates they do not believe in his leadership."
Mr. Gold added, "Mr. Mitchell has a checkered history as a corporate Director and lacks the business acumen, independence and credibility to serve as Chairman of The Walt Disney Company. His selection as chairman is a terrible choice by this Board. It is a grave disservice to their shareholders."
Messrs. Disney and Gold continued, "It is clear from this action that corporate governance is just talk at the Walt Disney Company. We renew our call for substantive change beginning with the immediate commencement of a search for a new CEO and the selection of a truly independent Chairman of the Board," they said. "The shareholders have spoken and the Board must respond appropriately."
Messrs. Disney and Gold said that the public outcry from investors has been deafening.
-- Sean Harrigan, President of CalPERS stated, "This discontent is too wide and way too deep in the marketplace, and it has led us to believe that Eisner should go and the Board should get quickly to work on planning for an orderly transition."
-- New York State Comptroller Alan Hevesi stated, "What Disney must do is 'separate the positions of chairman and chief executive and ... replace Mr. Eisner as soon as possible.'"
-- Cynthia Richson, the corporate governance officer for the Ohio Public Employees Retirement System stated, "I'm extremely disappointed with Mitchell. There are questions about his psychological independence, considering his long-standing ties with Eisner."
-- Robert A.G. Monks, Respected governance luminary, commenting on the vote stated "This is so high. It would have been a discharge vote at 33 percent. At 43 percent, they shouldn't even take time to blot the ink on the resignation ... He's got to go. He really does. You can't have this big shadow over the board and over the succession process. Unhappily, Michael was personally repudiated. He'll just have to take that and accept it ... Michael and the Board have to soberly reflect that they've been rejected by their owners".
-- Patrick McGurn of Institutional Shareholder Services was quoted as saying, " ... beyond a referendum on corporate governance. This is a referendum on Eisner's continued presence at the company." A spokeswoman for ISS added, "If the Disney Board believes this is the silver bullet to fix all the problems, they are sort of mistaken. The level of the vote makes it clear that investors have a lot more on their minds than just the splitting of the position."
-- The Council of Institutional Investors stated today, "And the most troubling thing of all? The company's response to this extraordinary shareholder proxy revolt trivialized it."
-- Charles Elson, director of the University of Delaware's Center for Corporate Governance said, "Disney once again seems to be misunderstanding the situation. This is a shuffling of the chairs, not a change."
Mr. Gold continued, "This knee-jerk decision by the Board of Directors is not surprising given its history of lip service and halfhearted measures regarding real corporate governance reform. Disney shareholders and all investors have been let down by the Board of The Walt Disney Company; yet again, they have failed to meet and honor the fundamental principles of good governance."
Mr. Gold and Mr. Disney plan to continue their campaign by speaking to and meeting with the Company's shareholders in the coming days.
"These issues are just too important for Disney and the overall credibility of our capital markets. We can't stop or slow down now," Roy Disney said.
03-04-2004 02:10 PM
This is sorta funny, I wonder if he's including himself and Roy Disney among those who paid lip service to good governance.
Originally posted by Darkbeer Mr. Gold continued, "This knee-jerk decision by the Board of Directors is not surprising given its history of lip service and halfhearted measures regarding real corporate governance reform. Disney shareholders and all investors have been let down by the Board of The Walt Disney Company; yet again, they have failed to meet and honor the fundamental principles of good governance."
Mr Gold signed Eisner's latest contract. Pretty ironclad. I suggest they find the right amount of money for Eisner to agree to leave, and find a replacement.
I hope that Stan/Roy will use their shareholders' influence as leverage to do something quickly.
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I've recently seen Michael Eisner's "ironclad" contract with Disney. There are several options available for his removal.
Stan and Roy are right on with this press release. I heard the news about the WDC's moves after the shareholder meeting on the car radio and almost drove off the road. Mitchell, Eisner's puppet, is "promoted" to be put on an equal plane with Eisner. It is so unbelievably arrogant as to be laughable.
Eisner fails to grasp that this issue is beyond a "personal" test of wills between himself and Disney/Gold.
His bosses, the shareholders, just spoke and he told them to stick it in their ear. And how on EARTH has that board been allowed to continue with their shenanigans?
They are stirring a hornet's nest with this latest move.