The Pa. treasurer met with company lobbyists who are trying to persuade states to hold on to the firm's stock.
By Wendy Tanaka
Philadelphis Inquirer Staff Writer
Pennsylvania Treasurer Barbara Hafer said yesterday that Walt Disney Co. officials were blaming consultants for misdirecting the company on several management issues.
Hafer met with three Disney lobbyists in Harrisburg March 23 but made her first comments about the session this week.
In an interview yesterday, she said the Disney representatives told her that consultants had advised the company to ignore claims from dissident shareholders that chief executive officer Michael D. Eisner had mismanaged the entertainment giant and that he should be ousted.
"You're telling me, as a shareholder, you spent a lot of money and you're blaming these people who gave you bad advice," Hafer said. "That's the lamest excuse I've ever heard."
The Disney officials also said that the consultants had advised the company to not strip Eisner of his chairman's title. This recommendation, according to Hafer's recollection of the meeting, was made before Disney's tumultuous shareholder meeting in Philadelphia March 3.
Disney, which has lobbied seven other states to hold on to their Disney shares, had requested a meeting with Hafer to convince her that the company's financial performance had strengthened and that it had an independent board.
Preston Padden, executive vice president of government relations at Disney, responded to Hafer's comments yesterday, saying: "We had a great meeting with Treasurer Hafer. We like her very much, and we look forward to working with her in the future."
The Treasurer's Office is the custodian of the Public School Employees' Retirement System and the state Employees' Retirement System. Those pension funds together hold 2.75 million Disney shares, which yesterday were valued at $69.3 million, based on yesterday's closing price of $25.20.
Despite her concerns about Disney, Hafer does not want the state pension funds to sell their shares.
"The bottom line is, we want the company to succeed," she said. "We want them to make money for the pension fund... . I'll give them time."
Hafer also said the Disney lobbyists pressured her to give positive statements about the company after the meeting.
"The tone was so, 'We're going to tell you our side. We want you to believe it, and we want you to say good things,' " she said.
Asked why she did not comment sooner on the meeting with Disney officials, Hafer yesterday said she did not want to say anything negative immediately.
But Gov. Rendell, who also met with the Disney lobbyists and Eisner via conference call March 23, has endorsed the company's management.
"The pension board should concern themselves strictly with earnings and recent performance," Rendell said last week. "And by that measure, Disney has done great."
Hafer, a Democrat, said Rendell's opinion might have differed from hers because he talked with Eisner.
In a letter to Eisner on Monday, Hafer said the meeting "did not succeed in relieving all of my concerns and, in fact, heightened them in some areas."
At the company's shareholder meeting, shareholders withheld 43 percent of their votes to reelect Eisner to the board, prompting directors to remove him as chairman. He remains chief executive officer.
Since last year, the Burbank, Calif., company has faced mounting criticism from former board members and large shareholders dissatisfied with the company's stock performance in recent years.
On Feb. 11, Philadelphia's Comcast Corp. launched a takeover bid for Disney, heaping more pressure on the company. Disney rejected the bid as too low, but it remains on the table.
By Wendy Tanaka
Philadelphis Inquirer Staff Writer
Pennsylvania Treasurer Barbara Hafer said yesterday that Walt Disney Co. officials were blaming consultants for misdirecting the company on several management issues.
Hafer met with three Disney lobbyists in Harrisburg March 23 but made her first comments about the session this week.
In an interview yesterday, she said the Disney representatives told her that consultants had advised the company to ignore claims from dissident shareholders that chief executive officer Michael D. Eisner had mismanaged the entertainment giant and that he should be ousted.
"You're telling me, as a shareholder, you spent a lot of money and you're blaming these people who gave you bad advice," Hafer said. "That's the lamest excuse I've ever heard."
The Disney officials also said that the consultants had advised the company to not strip Eisner of his chairman's title. This recommendation, according to Hafer's recollection of the meeting, was made before Disney's tumultuous shareholder meeting in Philadelphia March 3.
Disney, which has lobbied seven other states to hold on to their Disney shares, had requested a meeting with Hafer to convince her that the company's financial performance had strengthened and that it had an independent board.
Preston Padden, executive vice president of government relations at Disney, responded to Hafer's comments yesterday, saying: "We had a great meeting with Treasurer Hafer. We like her very much, and we look forward to working with her in the future."
The Treasurer's Office is the custodian of the Public School Employees' Retirement System and the state Employees' Retirement System. Those pension funds together hold 2.75 million Disney shares, which yesterday were valued at $69.3 million, based on yesterday's closing price of $25.20.
Despite her concerns about Disney, Hafer does not want the state pension funds to sell their shares.
"The bottom line is, we want the company to succeed," she said. "We want them to make money for the pension fund... . I'll give them time."
Hafer also said the Disney lobbyists pressured her to give positive statements about the company after the meeting.
"The tone was so, 'We're going to tell you our side. We want you to believe it, and we want you to say good things,' " she said.
Asked why she did not comment sooner on the meeting with Disney officials, Hafer yesterday said she did not want to say anything negative immediately.
But Gov. Rendell, who also met with the Disney lobbyists and Eisner via conference call March 23, has endorsed the company's management.
"The pension board should concern themselves strictly with earnings and recent performance," Rendell said last week. "And by that measure, Disney has done great."
Hafer, a Democrat, said Rendell's opinion might have differed from hers because he talked with Eisner.
In a letter to Eisner on Monday, Hafer said the meeting "did not succeed in relieving all of my concerns and, in fact, heightened them in some areas."
At the company's shareholder meeting, shareholders withheld 43 percent of their votes to reelect Eisner to the board, prompting directors to remove him as chairman. He remains chief executive officer.
Since last year, the Burbank, Calif., company has faced mounting criticism from former board members and large shareholders dissatisfied with the company's stock performance in recent years.
On Feb. 11, Philadelphia's Comcast Corp. launched a takeover bid for Disney, heaping more pressure on the company. Disney rejected the bid as too low, but it remains on the table.