Michael Eisner, who led the Walt Disney Co. to huge success in the 1980s but more recently clashed with dissident stockholders including the founder's family, will leave the company in 2006 when his c
Michael Eisner, who led the Walt Disney Co. to huge success in the 1980s but more recently clashed with dissident stockholders including the founder's family, will leave the company in 2006 when his contract expires, the company said today (Sept. 10).
In a letter to the Disney board, dated yesterday and released by Disney's London spokeswoman, Joyce Lorigan, Eisner said: "I plan to retire from my role as chief executive officer of the company upon the conclusion of the term of my employment agreement on Sept. 30, 2006."
Eisner's departure will end a turbulent two-decade relationship with the media giant.
"I know it has been a very challenging time for the board members during this period, and I am most grateful for all of the time and effort, consideration and support, and concern for the company that all of you have demonstrated," Eisner said in his letter.
Over the past year, Eisner's leadership abilities have been questioned by former Disney board members Roy E. Disney, the nephew of founder Walt Disney, and Stanley Gold, who have led a campaign against Disney through their Web site, SaveDisney.com. The former board members said Eisner was responsible for turning the company in the wrong direction. Walt Disney's only surviving child, Diane Disney Miller, also called on Eisner to step down.
Eisner also has lost confidence among investors, namely leaders of state pension funds in six states that have urged Disney to become more independent and more aggressive in finding a successor for Eisner.
While the pension funds together represent less than 2% of Disney's outstanding shares, they wield tremendous influence over corporate boards and led an effort that resulted in Disney shareholders withholding 45% of votes cast for the re-election of Eisner to the board at a March 3 annual shareholders meeting.
Disney then separated the duties of chairman and chief executive officer, a key demand of the pension funds, stripping the chairman's title from Eisner.
In an interview with The Wall Street Journal published Friday, Eisner said he felt "this was the time to give the board two years notice, so that there will be a comfortable period of succession."
But the newspaper said that it wasn't known whether Eisner, 62, would have been offered a new contract by the Disney board. He has led the company for 20 years.
Eisner recently told Walt Disney directors that company president Robert Iger would be a good successor, the Los Angeles Times reported. Iger, whose contract expires in September 2005, has recently met with investors and executives and told the Times he would like the top job.
Eisner was named Disney's CEO in 1984 and helped rebuild the company by reviving Disney's storied animation unit, expanded its theme parks and created a strong lineup of TV properties including ABC, ESPN and the Disney Channel. Eisner has helped move the company from a capitalization of $2.8 billion to $58.4 billion in the last 20 years.
But Disney has faltered in recent years as the performance of its animated films, ABC broadcast network and theme parks declined. Disney's stock traded as high as $28 in February during what turned out to be a failed takeover bid by Comcast. It closed yesterday at $22.86 on the New York Stock Exchange.
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