Disney chief Eisner certifies accounting
Aug 9
LOS ANGELES (Reuters) -- Media giant Walt Disney Co. on Friday issued sworn statements from top executives, including Chairman Michael Eisner, certifying accounting statements and said it would review rules regarding the employment of board members' children.
Burbank, California-based Disney is under pressure from shareholders and influential board members to stem the tide of poor earnings that have sent Disney shares plummeting to near eight-year lows.
But Friday's moves more closely reflect financial markets' concerns with tightening corporate governance policies and shoring up investor confidence in the wake of recent accounting scandals at companies like Enron Corp. and WorldCom.
Last week, when Disney announced its fiscal third-quarter earnings and warned of a lower-than-expected current quarter results, it also said it would reduce the size of its board and take other steps to address corporate governance.
Complying with new federal rules, Disney on Friday filed statements from Chairman and Chief Executive Eisner and Chief Financial Officer Tom Staggs validating recent earnings reports for the U.S. Securities and Exchange Commission.
Each of the statements covers the company's annual report for the year ended Sept. 30, 2001, all quarterly reports, and other statements filed after fiscal 2001's annual report. The statements also cover any amendments to the reports.
The statements say "no covered report contained an untrue statement of material fact," and "no covered report omitted to state a material fact necessary to make the statements in the covered report."
ACCOUNTING NOT AN ISSUE
The filings did little to change previous statements made by Disney executives. Earlier this week, Staggs told Reuters in an interview: "The accounting issues -- I don't have them."
But in June, the SEC ordered 947 companies to certify the accuracy of their reports, leading many companies to do so.
At the same time it filed the certifications, Disney separately amended its fiscal 2001 annual report to say it is reviewing whether employing children of Disney board members complies with federal rules on corporate governance.
The company said children of board members Reveta Bowers, Stanley Gold and Raymond Watson were employed by Disney in various divisions in fiscal 2001. Two remain at Disney.
The company also said the wife of board member John Bryson is employed by a cable network in which Disney holds an indirect 50-percent interest.
Disney also repeated the statements it made with its fiscal third-quarter earnings that it plans to reduce the board's size and reorganize and reduce the size of board committees.
On Thursday, sources with knowledge of Disney's board moves told Reuters some board members and institutional shareholders, were growing concerned about Disney's falling share price and the company's strategies to turn operations around.
The board members are Walt Disney's nephew Roy Disney, the company's largest individual shareholder with a 17.5 million shares, and Stanley Gold, whose Shamrock Holdings is the Disney family's investment arm, according to newspaper reports.
Watson, however, defended Eisner and the company's operations, telling Reuters pressure was not mounting on the long-time chief executive and that the company's woes stem from the broader economic downturn. "From our point of view, we have a very solid company," he said.
Analysts and board sources on both sides of the schism over the company's performance agreed that Eisner's job is not in any immediate danger.
08/09/02 17:23 ET
Aug 9
LOS ANGELES (Reuters) -- Media giant Walt Disney Co. on Friday issued sworn statements from top executives, including Chairman Michael Eisner, certifying accounting statements and said it would review rules regarding the employment of board members' children.
Burbank, California-based Disney is under pressure from shareholders and influential board members to stem the tide of poor earnings that have sent Disney shares plummeting to near eight-year lows.
But Friday's moves more closely reflect financial markets' concerns with tightening corporate governance policies and shoring up investor confidence in the wake of recent accounting scandals at companies like Enron Corp. and WorldCom.
Last week, when Disney announced its fiscal third-quarter earnings and warned of a lower-than-expected current quarter results, it also said it would reduce the size of its board and take other steps to address corporate governance.
Complying with new federal rules, Disney on Friday filed statements from Chairman and Chief Executive Eisner and Chief Financial Officer Tom Staggs validating recent earnings reports for the U.S. Securities and Exchange Commission.
Each of the statements covers the company's annual report for the year ended Sept. 30, 2001, all quarterly reports, and other statements filed after fiscal 2001's annual report. The statements also cover any amendments to the reports.
The statements say "no covered report contained an untrue statement of material fact," and "no covered report omitted to state a material fact necessary to make the statements in the covered report."
ACCOUNTING NOT AN ISSUE
The filings did little to change previous statements made by Disney executives. Earlier this week, Staggs told Reuters in an interview: "The accounting issues -- I don't have them."
But in June, the SEC ordered 947 companies to certify the accuracy of their reports, leading many companies to do so.
At the same time it filed the certifications, Disney separately amended its fiscal 2001 annual report to say it is reviewing whether employing children of Disney board members complies with federal rules on corporate governance.
The company said children of board members Reveta Bowers, Stanley Gold and Raymond Watson were employed by Disney in various divisions in fiscal 2001. Two remain at Disney.
The company also said the wife of board member John Bryson is employed by a cable network in which Disney holds an indirect 50-percent interest.
Disney also repeated the statements it made with its fiscal third-quarter earnings that it plans to reduce the board's size and reorganize and reduce the size of board committees.
On Thursday, sources with knowledge of Disney's board moves told Reuters some board members and institutional shareholders, were growing concerned about Disney's falling share price and the company's strategies to turn operations around.
The board members are Walt Disney's nephew Roy Disney, the company's largest individual shareholder with a 17.5 million shares, and Stanley Gold, whose Shamrock Holdings is the Disney family's investment arm, according to newspaper reports.
Watson, however, defended Eisner and the company's operations, telling Reuters pressure was not mounting on the long-time chief executive and that the company's woes stem from the broader economic downturn. "From our point of view, we have a very solid company," he said.
Analysts and board sources on both sides of the schism over the company's performance agreed that Eisner's job is not in any immediate danger.
08/09/02 17:23 ET