Disney's Eisner Faces Shareholder Vote

ByABC News
March 1, 2004, 1:40 PM

March 2, 2004 -- Will Michael Eisner have to turn over the keys to the Kingdom? That is topic "A" on Wall Street this week.

The chairman and CEO of The Walt Disney Company is at the center of a very public campaign by two former Disney board members to have him ousted from the job he's held since 1984.

Roy Disney, the founder's nephew, and his financial adviser Stanley Gold are asking that shareholders "withhold" their vote on Eisner for reelection as chairman of the board when they meet at the company's annual meeting Wednesday in Philadelphia. Eisner is running unopposed.

At a news conference today, Gold said, "We are not going away until Mr. Eisner is gone. Next week, next month, next year, we are here as long as it takes."

Ever since the two men resigned from the board in December, the rhetoric has become louder.

Some Disney executives have painted it as a personal vendetta against Eisner, but Roy Disney disagrees.

"I'm doing my damnedest to keep it from being personal. It is time for Eisner to leave," Roy Disney said during today's news conference.

In the past week, the backlash hit a fever pitch as the pair picked up at least partial support from some very powerful institutional investors. The influential Institutional Shareholders Services, which advises one third of all the pension funds that invest in Disney stock, recommended that its clients withhold their votes for Eisner.

ISS said in its report: "We recommend a withhold vote against Mr. Eisner as a signal that real boardroom change needs to continue and separation of the powers of CEO and Chairman are needed. … At the end of the day, all roads lead back to Eisner. … If there were ever a case for separating the roles of Chairman and CEO, this company is the poster child."

A number of ISS's large pension fund clients have publicly stated that they will follow the recommendation. Some inside the Disney company say they would not be surprised to see the withhold votes come in at around 30 percent.