Disney Plans to Cut Size of Board

[mkt]

Disney Plans to Cut Size of Board

BURBANK, Calif. (AP) -- The Walt Disney Co. will cut the size of its board of directors, shrink board commit-tees and take other steps to strengthen its corporate governance, the company said Thursday. Chief executive Michael Eisner said Disney already required non-employee board members to own a minimum of $100,000 in company stock and has increased the responsibilities of several board committees. In the coming months, Eisner said Disney would announce further changes, including strengthening the role of the board's independ-ent members. He did not provide further details during a conference call with analysts to discuss the com-pany's third quarter results. "These steps will take time, not too much time, and will further evidence our com-mitment to serve our shareholders," Eisner said. Analysts said Disney's plans will go along way to correcting a long-standing criticism that Disney's board has been too loyal to Eisner. "They have been criticized for a long time for having a very chummy board," said David Miller, an analyst with Sander Morris Harris. "Times have changed in the last two quarters on the street. Disney has its ears to the ground and they know what they have to do."

 

[jmarc63]

Originally posted by mktiggerman
Disney Plans to Cut Size of Board

Analysts said Disney's plans will go along way to correcting a long-standing criticism that Disney's board has been too loyal to Eisner. "They have been criticized for a long time for having a very chummy board,"

Maybe this could be a good sign that maybe we could go back to the days of the customer thinking instead of the accountant.

 

[pheneix]

Looks like another smoke screen...

 

[TURKEY]

Here's another story about this with more details.



Disney Board Braces for Impact of New Independence Rules
Updated: Monday, August 12, 2002 12:03 AM ET Printer-friendly version

Walt Disney Co.'s (DIS, news, msgs) board may be heading for a shake-up following the disclosure Friday that Disney has recently employed immediate family members of three board members, who as a result probably will no longer be counted as independent directors by the company, Monday's Wall Street Journal reported.

Disney revealed Friday in a Securities and Exchange Commission filing that three directors -- Stanley Gold, Raymond Watson and Reveta Bowers -- have children employed by the company in the past year. Disney plans to follow corporate-governance standards recently recommended by the New York Stock Exchange, by which a director can't be considered independent if an immediate family member worked for the company in the previous five years.

If, as expected, the proposed NYSE standard is later adopted by the Disney board, the number of independent directors on Disney's 16-member board -- which has long been criticized as lacking independence -- would drop immediately to 10 from 13. And major committee assignments would be reshuffled because Disney requires that some of its key board committees be composed entirely of independent directors. It is emblematic of the kind of changes that could take place among many companies implementing new, tougher independence guidelines.

While the changes at Disney wouldn't force the three board members to step down, they would still have an impact, as they would diminish Mr. Gold's influence. People familiar with the matter say he has been pressing Disney Chairman and Chief Executive Michael Eisner to improve the company's faltering performance and often has pushed for better governance practices. Mr. Gold is a business partner of Disney Vice Chairman Roy E. Disney, and they have grown increasingly worried about the plummeting value of Mr. Disney's 17.5 million- share Disney stake.

Disney says the timing of the filing was driven by Mr. Eisner's sworn certification on Friday that the company's SEC filings, including its proxy report, don't omit material facts or contain untrue statements. Yet, the timing will still benefit Mr. Eisner, who has been fending off questions about the company's future and his own job security. Disney is battling problems in most of its major units, its earnings have dropped sharply in recent years, and the stock is trading at 1994 levels.

Friday's SEC filing reveals Mr. Gold's daughter, Jennifer Gold, in fiscal 2001 made $85,111 working for Disney's consumer-products unit. Mr. Watson's son, David Watson, made $152,608 at the Disney Channel. And Ms. Bowers's son, Craig Bowers, worked a portion of the year for Disney's Internet group, making $81, 863. Mr. Bowers no longer works for Disney.

Wall Street Journal Staff Reporter Bruce Orwall contributed to this report.

Copyright 2002 Dow Jones & Company, Inc.

All Rights Reserved.



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