Disney sets year-end goal for governance reform
By Doug Young
08/20/02 20:05 ET
LOS ANGELES (Reuters) -- Entertainment giant Walt Disney Co. said on Tuesday its board has set a year-end target to implement several corporate governance initiatives outlined earlier this month including reducing its board size.
Disney's next board meeting is set for the last week of September, and it is likely the directors will begin taking up governance issues at that meeting, said sources who knew of the board's plans.
But specific details of the meeting's agenda and an exact date for the meeting were still unknown. A Disney spokesman said the company as a general rule did not disclose board meeting dates and agendas.
He did say the board's governance efforts have been ongoing since January of this year.
Disney has outlined broad goals that called for lowering the number of directors from 16 and reorganizing major committees to strengthen its own corporate governance.
The Burbank, Calif.-based media company, too, is looking at whether employing children of three board members -- Stanley Gold, Reveta Bowers and Raymond Watson -- complied with proposed New York Stock Exchange corporate governance rules defining an independent director, according to a recent filing by Disney with the Securities and Exchange Commission.
"As we said, this is an ongoing process and the board is reviewing both the proposed NYSE rules and its existing guidelines as part of its ongoing governance process which will also include issues regarding the size and composition of the board and its committees," a Disney spokesman told Reuters.
The statement went on to say Disney hopes to complete its governance actions by the end of this year.
Disney's push for stronger governance comes amid a larger nationwide call for companies to make their boards more independent and ease investor concern stemming from recent accounting scandals at Enron Corp., WorldCom Inc., and Adelphia Communications Corp.
The push also comes as Disney chief Michael Eisner found himself under increasing scrutiny by key board members who sources said were Roy Disney, a major stockholder and founder Walt Disney's nephew, and Gold, who manages Disney family investments through Los Angeles-based Shamrock Holdings.
Gold and Disney were integral in bringing Eisner to the company in 1984, but have reportedly become upset with Disney's recent stock slide to as low as $13.50 a share -- a price Disney investors haven't seen in nearly eight years.
Gold and Disney have not returned phone calls for comment.
Company shares, which sold for as much as $43 in May 2000, bottomed out last week, before rebounding along with the overall market. Shares lost 20 cents to close at $16.45 in Tuesday trading on the New York Stock Exchange.
Disney shares are under pressure, chiefly, due to lackluster attendance at the company's theme parks and poor viewership at its ABC television network.
Analysts have said the theme parks like Walt Disney World in Florida and Disneyland in southern California may take as much as a year or more to rebound.
Near-term hopes for improvement are focused on ABC with the upcoming fall TV season getting into full-swing the week of Sept. 23.
Many observers have said that Eisner's job might be in jeopardy if the company's performance didn't improve quickly. But knowledgeable sources said Eisner is well-entrenched.
Just last week, in a measure designed to boost confidence, Eisner disclosed that he purchased just over $10 million worth of Disney stock at an average price of $13.94 a share, boosting his stake to 13.99 million shares.
Roy Disney owns 17.5 million shares and along with the Texas-based investors, the Bass brothers, they are the company's three largest shareholders.
By Doug Young
08/20/02 20:05 ET
LOS ANGELES (Reuters) -- Entertainment giant Walt Disney Co. said on Tuesday its board has set a year-end target to implement several corporate governance initiatives outlined earlier this month including reducing its board size.
Disney's next board meeting is set for the last week of September, and it is likely the directors will begin taking up governance issues at that meeting, said sources who knew of the board's plans.
But specific details of the meeting's agenda and an exact date for the meeting were still unknown. A Disney spokesman said the company as a general rule did not disclose board meeting dates and agendas.
He did say the board's governance efforts have been ongoing since January of this year.
Disney has outlined broad goals that called for lowering the number of directors from 16 and reorganizing major committees to strengthen its own corporate governance.
The Burbank, Calif.-based media company, too, is looking at whether employing children of three board members -- Stanley Gold, Reveta Bowers and Raymond Watson -- complied with proposed New York Stock Exchange corporate governance rules defining an independent director, according to a recent filing by Disney with the Securities and Exchange Commission.
"As we said, this is an ongoing process and the board is reviewing both the proposed NYSE rules and its existing guidelines as part of its ongoing governance process which will also include issues regarding the size and composition of the board and its committees," a Disney spokesman told Reuters.
The statement went on to say Disney hopes to complete its governance actions by the end of this year.
Disney's push for stronger governance comes amid a larger nationwide call for companies to make their boards more independent and ease investor concern stemming from recent accounting scandals at Enron Corp., WorldCom Inc., and Adelphia Communications Corp.
The push also comes as Disney chief Michael Eisner found himself under increasing scrutiny by key board members who sources said were Roy Disney, a major stockholder and founder Walt Disney's nephew, and Gold, who manages Disney family investments through Los Angeles-based Shamrock Holdings.
Gold and Disney were integral in bringing Eisner to the company in 1984, but have reportedly become upset with Disney's recent stock slide to as low as $13.50 a share -- a price Disney investors haven't seen in nearly eight years.
Gold and Disney have not returned phone calls for comment.
Company shares, which sold for as much as $43 in May 2000, bottomed out last week, before rebounding along with the overall market. Shares lost 20 cents to close at $16.45 in Tuesday trading on the New York Stock Exchange.
Disney shares are under pressure, chiefly, due to lackluster attendance at the company's theme parks and poor viewership at its ABC television network.
Analysts have said the theme parks like Walt Disney World in Florida and Disneyland in southern California may take as much as a year or more to rebound.
Near-term hopes for improvement are focused on ABC with the upcoming fall TV season getting into full-swing the week of Sept. 23.
Many observers have said that Eisner's job might be in jeopardy if the company's performance didn't improve quickly. But knowledgeable sources said Eisner is well-entrenched.
Just last week, in a measure designed to boost confidence, Eisner disclosed that he purchased just over $10 million worth of Disney stock at an average price of $13.94 a share, boosting his stake to 13.99 million shares.
Roy Disney owns 17.5 million shares and along with the Texas-based investors, the Bass brothers, they are the company's three largest shareholders.