Laura M. Holson NYT Monday, April 26, 2004
Future of Eisner is a crucial concern at board meeting
LOS ANGELES There will be no camera crews, spin doctors or noisy dissenters converging on Disneyland when the board of Walt Disney convenes Monday for the first time since the investor revolt at the shareholders' meeting last month in Philadelphia.
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But what takes place during the two-day closed-door sessions could well have a greater significance for the future of Disney than the well-publicized events at the beginning of March. As part of a continuing review of who will succeed Chief Executive Michael Eisner, the 11 members of Disney's board plan to scrutinize the strengths and weaknesses of the top 8 to 12 senior executives, including Anne Sweeney, co-chairwoman of the New Media Networks unit, and Richard Cook, chairman of Walt Disney Studios.
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Any discussion of succession is uncomfortable at Disney these days. Although ABC is in disarray, several recent movies like "The Alamo" are missing in action at the box office, and the company stripped Eisner of his chairman title after more than 45 percent of shareholder votes were withheld in his re-election as a director, the board appears willing to give the chief executive time to deliver on the company's turnaround.
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Eisner, whose contract expires in September 2006, has promised earnings growth from continuing operations of more than 40 percent this year alone.
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Nonetheless, the board, under the direction of the new chairman, George Mitchell, is trying to appease restive investors by instituting a more formal approach to finding Eisner's successor. Going outside the company could prove too pricey for the board; Peter Chernin, a top executive at News Corp. often mentioned as a likely candidate, already makes several times what Disney pays Eisner.
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"The biggest problem in the entertainment business is who are the next media moguls?" said Chris Dixon, a managing director at Gabelli Asset Management who has followed Disney for years. "This is especially true at Disney."
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Eisner has long been criticized for an aversion to grooming successors. Stephen Burke, who spent 12 years at Disney and is versed in everything from the theme parks to ABC, left and is now president of Comcast, which made a $54 billion unsolicited offer for Disney in February.
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The perceived absence of executive-suite-ready executives, too, does not bode well for Eisner, nor for Disney over all, according to Tom Wolzien, a media analyst at Sanford C. Bernstein. "Part of the responsibility of top management is that you have a bench and to make sure they evolve at the company," he said. "I don't know that they are doing this."
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Many at Disney say the executives who have prospered, like those at ESPN and the Disney Channel, have done so with less interference from Eisner and the company's president, Robert Iger.
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A rise for Iger to chief executive is considered questionable, say analysts and investors, unless he can turn around the struggling ABC, which he used to run and remains intimately involved with. Iger, like many other senior executives, tip-toes around the question of succession.
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"Michael is here for life - didn't you know that?" joked Iger, shifting uncomfortably in his chair when asked if he could run Disney.
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"There's not a good answer for that one," said Cook of Walt Disney Studios, when asked the same question.
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It takes a relative newcomer, Andy Mooney, chairman of the consumer products division, to admit the seemingly obvious: "Who wouldn't want to be CEO of the Walt Disney Co.? Except for the fact that it's a pressure cooker because of all the external pressure, it's a dream job."
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The New York Times
Future of Eisner is a crucial concern at board meeting
LOS ANGELES There will be no camera crews, spin doctors or noisy dissenters converging on Disneyland when the board of Walt Disney convenes Monday for the first time since the investor revolt at the shareholders' meeting last month in Philadelphia.
.
But what takes place during the two-day closed-door sessions could well have a greater significance for the future of Disney than the well-publicized events at the beginning of March. As part of a continuing review of who will succeed Chief Executive Michael Eisner, the 11 members of Disney's board plan to scrutinize the strengths and weaknesses of the top 8 to 12 senior executives, including Anne Sweeney, co-chairwoman of the New Media Networks unit, and Richard Cook, chairman of Walt Disney Studios.
.
Any discussion of succession is uncomfortable at Disney these days. Although ABC is in disarray, several recent movies like "The Alamo" are missing in action at the box office, and the company stripped Eisner of his chairman title after more than 45 percent of shareholder votes were withheld in his re-election as a director, the board appears willing to give the chief executive time to deliver on the company's turnaround.
.
Eisner, whose contract expires in September 2006, has promised earnings growth from continuing operations of more than 40 percent this year alone.
.
Nonetheless, the board, under the direction of the new chairman, George Mitchell, is trying to appease restive investors by instituting a more formal approach to finding Eisner's successor. Going outside the company could prove too pricey for the board; Peter Chernin, a top executive at News Corp. often mentioned as a likely candidate, already makes several times what Disney pays Eisner.
.
"The biggest problem in the entertainment business is who are the next media moguls?" said Chris Dixon, a managing director at Gabelli Asset Management who has followed Disney for years. "This is especially true at Disney."
.
Eisner has long been criticized for an aversion to grooming successors. Stephen Burke, who spent 12 years at Disney and is versed in everything from the theme parks to ABC, left and is now president of Comcast, which made a $54 billion unsolicited offer for Disney in February.
.
The perceived absence of executive-suite-ready executives, too, does not bode well for Eisner, nor for Disney over all, according to Tom Wolzien, a media analyst at Sanford C. Bernstein. "Part of the responsibility of top management is that you have a bench and to make sure they evolve at the company," he said. "I don't know that they are doing this."
.
Many at Disney say the executives who have prospered, like those at ESPN and the Disney Channel, have done so with less interference from Eisner and the company's president, Robert Iger.
.
A rise for Iger to chief executive is considered questionable, say analysts and investors, unless he can turn around the struggling ABC, which he used to run and remains intimately involved with. Iger, like many other senior executives, tip-toes around the question of succession.
.
"Michael is here for life - didn't you know that?" joked Iger, shifting uncomfortably in his chair when asked if he could run Disney.
.
"There's not a good answer for that one," said Cook of Walt Disney Studios, when asked the same question.
.
It takes a relative newcomer, Andy Mooney, chairman of the consumer products division, to admit the seemingly obvious: "Who wouldn't want to be CEO of the Walt Disney Co.? Except for the fact that it's a pressure cooker because of all the external pressure, it's a dream job."
.
The New York Times
