From USAToday.com:
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By Michael McCarthy, USA TODAY
Michael Eisner so far has survived a massive 43% no-confidence vote at Walt Disney Co.'s (DIS) annual meeting. But corporate intrigue continues to swirl around the CEO, who was stripped of his chairman's post by the board after the vote.
Eisner is at the top of the hit list for corporate governance activists and shareholders taking aim at so-called imperial CEOs. More than 40% of shareholder votes were withheld for his unopposed re-election to the board at Disney's raucous annual meeting on March 3. That evening, Disney's board elected George Mitchell to replace Eisner as chairman, despite the former U.S. senator's 24% withhold tally.
But leaders of state pension plans from California to Pennsylvania who led the Eisner protest vote have been criticizing that move as just a reshuffling of chairs. They have accused the Disney board of defying the wishes of shareholders who want Eisner out.
"Eisner has to go. We won't let this go away," says Barbara Hafer, state treasurer of Pennsylvania, whose funds withheld 2.75 million share votes from Eisner at the meeting. "They would be smart to settle it, force Eisner out and put some really independent people on the board."
Meanwhile, dissident former Disney directors Roy Disney and Stanley Gold met Monday and Tuesday for the first time since the big vote to plot the next phase of their oust-Eisner campaign.
Weapons that Eisner's foes may roll out:
•Keeping the heat on. State pension plans are keeping the pressure on Disney's 11-member board for changes. California State Controller Steve Westly has called for creation of an Ad Hoc Shareholder Committee to "monitor" a succession plan for Eisner. "We're looking for the board to do the right thing," says Westly, a board member of California State Teachers' Retirement System, the nation's third-largest pension fund. Roy Disney and Gold are seeking final numbers from the shareholder vote, including how Disney employees voted.
•Consent solicitation. Eisner's opponents are considering a little-used, difficult-but-powerful shareholder weapon called a "consent solicitation." The move would allow rebel shareholders to try to replace a director, or even the entire board, before the 2005 annual meeting. But it requires the support of a majority of shares. A consent solicitation campaign would cost millions and take months to complete.
•Pushing the SEC. Some state pension plans are lobbying the Securities and Exchange Commission to retroactively adopt a proposed rule to let shareholders nominate their own directors if management-backed members get a withhold vote of 35% or more.
•When in doubt, sue. Roy Disney and Gold have threatened to sue the Disney board alleging members breached their fiduciary duty to shareholders by keeping Eisner.
With Disney still facing a hostile takeover bid from cable giant Comcast, Mitchell and Eisner are moving aggressively to answer critics. Eisner told CNN's Larry King he intends to serve out his contract, which ends Sept. 30, 2006. In a speech at Georgetown University, Mitchell promised the Disney board would continue a "detailed review of succession covering several high executive positions, including that of CEO."
Link to article
By Michael McCarthy, USA TODAY
Michael Eisner so far has survived a massive 43% no-confidence vote at Walt Disney Co.'s (DIS) annual meeting. But corporate intrigue continues to swirl around the CEO, who was stripped of his chairman's post by the board after the vote.
Eisner is at the top of the hit list for corporate governance activists and shareholders taking aim at so-called imperial CEOs. More than 40% of shareholder votes were withheld for his unopposed re-election to the board at Disney's raucous annual meeting on March 3. That evening, Disney's board elected George Mitchell to replace Eisner as chairman, despite the former U.S. senator's 24% withhold tally.
But leaders of state pension plans from California to Pennsylvania who led the Eisner protest vote have been criticizing that move as just a reshuffling of chairs. They have accused the Disney board of defying the wishes of shareholders who want Eisner out.
"Eisner has to go. We won't let this go away," says Barbara Hafer, state treasurer of Pennsylvania, whose funds withheld 2.75 million share votes from Eisner at the meeting. "They would be smart to settle it, force Eisner out and put some really independent people on the board."
Meanwhile, dissident former Disney directors Roy Disney and Stanley Gold met Monday and Tuesday for the first time since the big vote to plot the next phase of their oust-Eisner campaign.
Weapons that Eisner's foes may roll out:
•Keeping the heat on. State pension plans are keeping the pressure on Disney's 11-member board for changes. California State Controller Steve Westly has called for creation of an Ad Hoc Shareholder Committee to "monitor" a succession plan for Eisner. "We're looking for the board to do the right thing," says Westly, a board member of California State Teachers' Retirement System, the nation's third-largest pension fund. Roy Disney and Gold are seeking final numbers from the shareholder vote, including how Disney employees voted.
•Consent solicitation. Eisner's opponents are considering a little-used, difficult-but-powerful shareholder weapon called a "consent solicitation." The move would allow rebel shareholders to try to replace a director, or even the entire board, before the 2005 annual meeting. But it requires the support of a majority of shares. A consent solicitation campaign would cost millions and take months to complete.
•Pushing the SEC. Some state pension plans are lobbying the Securities and Exchange Commission to retroactively adopt a proposed rule to let shareholders nominate their own directors if management-backed members get a withhold vote of 35% or more.
•When in doubt, sue. Roy Disney and Gold have threatened to sue the Disney board alleging members breached their fiduciary duty to shareholders by keeping Eisner.
With Disney still facing a hostile takeover bid from cable giant Comcast, Mitchell and Eisner are moving aggressively to answer critics. Eisner told CNN's Larry King he intends to serve out his contract, which ends Sept. 30, 2006. In a speech at Georgetown University, Mitchell promised the Disney board would continue a "detailed review of succession covering several high executive positions, including that of CEO."