Disney's Eisner Vows to Stay Despite Vote

ByABC News
March 4, 2004, 6:26 AM

PHILADELPHIA, March 4, 2004 — -- Despite a shareholder revolt that led him to lose the chairmanship of The Walt Disney Co., Michael Eisner vows that he will stay on as CEO through the end of his term in 2006.

"My intention is definitely to serve that term out to its completion," Eisner told Nightline's Ted Koppel in his first interview after the Disney board voted to split his dual job title of chairman and chief executive, which he had held for 20 years.

The board made former Sen. George Mitchell, a member of Disney's board, the company's new chairman, effective immediately.

The directors voted unanimously for Mitchell, a former U.S. senator from Maine, but in a statement reiterated their approval of Eisner's management and the company's strategy.

Earlier Wednesday, 43 percent of shareholders who voted at the company's annual meeting withheld their support for Eisner.The number of shares withheld was higher than many had been expecting, and represented a victory for shareholder activists Stanley Gold and Roy E. Disney, former board members who have been leading a shareholder revolt against Eisner.

The duo called the shareholders' vote "unprecedented in American corporate history" and called again for the board to oust Eisner. "After today's mandate, the board can no longer ignore the will of its shareholders," they said in a statement after the result of the vote was announced.

Merrill Lynch analyst Jessica Reif Cohen said today that the moves might not be enough to quiet the shareholder unrest.

"In light of the shareholders' vote, we believe this may not be enough to satisfy shareholders," she said. "This may also prompt the Board to more forcefully pursue a replacement/succession plan for Mr. Eisner as CEO. It is clear to us that the Board resoundingly supports Mr. Eisner. Should the Board 'do nothing' following this vote, we believe that shareholders will place Mr. Eisner as well as the Board on a very short 'leash.'"