Michael Eisner faced a rebuke of his leadership of the Walt Disney Co. today (March 3), as 43% of shareholders withheld their support for him in a vote at the company’s annual shareholder meeting.
The size of the no-confidence vote against Eisner was larger 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 him.
Eisner is running for re-election unopposed, so his job is not in immediate danger. But the depth of shareholder dissatisfaction with him could lead to other steps, such as a separation of the chairman and CEO roles, both of which he currently holds, or possibly his ouster.
In his opening remarks, Eisner defended his 20-year record at the helm of Disney despite calls for his ouster from Stanley Gold and Roy E. Disney, former board members who have been leading a shareholder revolt against him.
“I love this company,” Eisner said. “The board loves this company. And we are all passionate about the output of this company.”
Eisner acknowledged that the performance at Disney’s ABC network was “disappointing,” but he also told the shareholders that Disney has “the management skills and creative talent to continue its growth path.”
Gold and Disney went slightly over the 15 minutes they were allotted at the meeting to present their case against Eisner, saying it was not sufficient for the company simply to split the roles of chairman and CEO, both of which Eisner currently holds.
“Michael Eisner must leave now,” Gold said. “We see today’s meeting as a first step toward saving the company … We are seeking real and meaningful change.”
Several major pension funds representing millions of Disney shares joined the disaffected camp and said they would withhold their approval from Eisner and several board members to press for greater board independence.
Eisner defended his management team: “Disney’s record of creating value is indisputable … We are a very well-managed company.”
Disney executives noted that the company’s stock has risen more than 40% in the past year and the company has said earnings per share will rise 30% this year and by double digits through 2007.
Shares of Disney fell 10 cents to $26.66 today on the New York Stock Exchange.
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