Disney Board to Gather, Eisner Succession on Table
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By Peter Henderson
LOS ANGELES (Reuters) - Finding a successor to Walt Disney Co. Chief Executive Michael Eisner is a top item on the agenda when the company's board meets next week for its most substantive discussions since shareholder unrest at the company's annual meeting in March.
The Disney board will hold its longest scheduled meeting of the year on Monday and Tuesday, a late-April tradition when directors usually sit down for the first wide-ranging discussions after the annual meeting, a person familiar with the plan said.
This year is different because the board is facing a shareholder revolt. More than 45 percent of shares were voted against Eisner's reelection to the board in March as investors criticized Disney's growth strategy, corporate governance and Eisner's leadership.
Some investors point in part to money-losing broadcaster ABC, whose management was replaced this week. Disney also may face a charge to earnings after the costly flop of "The Alamo."
The company has said it expects earnings to rise more than 40 percent this year and analysts see strength in ESPN and its theme parks in the March quarter.
Chairman George Mitchell, the former senator appointed to head the board immediately after the March vote, previously has said that succession planning would be on the agenda both days at the April meeting. Eisner was chairman and CEO until the
Disney board separated the positions.
Some high-profile investors have called on Disney directors to dismiss Eisner, whose contract ends in September 2006.
"Our concerns are all about performance. Calpers is focused almost exclusively on Michael Eisner," Sean Harrigan, board president of the nation's largest pension fund, the California Public Employees Retirement System, said by interview.
Harrigan said Disney's board probably would pin down details of how the newly-independent chairman and chief executive roles would work in practice.
Calpers and five other funds will sit down with the board on May 21.
Harrigan distanced himself from critics of Mitchell, who also received a substantial protest vote. Some have called for him to leave as chairman. "I would not include Calpers in that group," he said.
John Chen, the chief executive of software firm Sybase Inc. who joined the board in January, said in a recent interview that Mitchell should stay.
"Senator Mitchell is a very high quality person. He is probably an icon of integrity. We will be well served to have Senator Mitchell as long as he possibly can," he said.
Chen also said that there was no need to discuss cable operator Comcast Corp's $46 billion bid for Disney, which the board dismissed shortly after it was made in February and which lags Disney's share price by more than $2 per share.
That is not a "fair price" he said.
"Whether it is strategically correct or not is not something that needs to be discussed at this time," he said, adding that with double-digit returns forecast for Disney this year, "I don't think Disney needs to be sold at all."
The meeting will be the first chance for directors to analyze the results of the March protest vote, beyond their hasty gathering hours after the vote in March.
SOUL SEARCHING OR NON-EVENT?
"This board needs to do some fundamental soul-searching given what has happened," said Charles Elson, director of the Center for Corporate Governance at the University of Delaware.
But many Disney watchers have not seen signals of a major change, such as Eisner's dismissal.
"I think it is going to be a non-event," Bill Thomas, head of U.S. equities for Baring Asset Management, said ahead of the meeting. His funds began buying Disney last fall.
Mitchell in February said the board on the first day of the meeting would discuss CEO succession, excluding management from at least some of the talks. Eisner briefed non-management directors on the subject in January and the board talked then.
"It was not an effort to reach a decision, but to have an in-depth discussion," Mitchell said on a conference call hosted by proxy advisory Glass Lewis in February .
Other issues that might be discussed include the election of another independent director this year, March quarter results that will be reported May 12 and future strategy, analysts said. (Additional reporting by Wei Gu in New York)
50 minutes ago Add Entertainment - Reuters Industry to My Yahoo!
By Peter Henderson
LOS ANGELES (Reuters) - Finding a successor to Walt Disney Co. Chief Executive Michael Eisner is a top item on the agenda when the company's board meets next week for its most substantive discussions since shareholder unrest at the company's annual meeting in March.
The Disney board will hold its longest scheduled meeting of the year on Monday and Tuesday, a late-April tradition when directors usually sit down for the first wide-ranging discussions after the annual meeting, a person familiar with the plan said.
This year is different because the board is facing a shareholder revolt. More than 45 percent of shares were voted against Eisner's reelection to the board in March as investors criticized Disney's growth strategy, corporate governance and Eisner's leadership.
Some investors point in part to money-losing broadcaster ABC, whose management was replaced this week. Disney also may face a charge to earnings after the costly flop of "The Alamo."
The company has said it expects earnings to rise more than 40 percent this year and analysts see strength in ESPN and its theme parks in the March quarter.
Chairman George Mitchell, the former senator appointed to head the board immediately after the March vote, previously has said that succession planning would be on the agenda both days at the April meeting. Eisner was chairman and CEO until the
Disney board separated the positions.
Some high-profile investors have called on Disney directors to dismiss Eisner, whose contract ends in September 2006.
"Our concerns are all about performance. Calpers is focused almost exclusively on Michael Eisner," Sean Harrigan, board president of the nation's largest pension fund, the California Public Employees Retirement System, said by interview.
Harrigan said Disney's board probably would pin down details of how the newly-independent chairman and chief executive roles would work in practice.
Calpers and five other funds will sit down with the board on May 21.
Harrigan distanced himself from critics of Mitchell, who also received a substantial protest vote. Some have called for him to leave as chairman. "I would not include Calpers in that group," he said.
John Chen, the chief executive of software firm Sybase Inc. who joined the board in January, said in a recent interview that Mitchell should stay.
"Senator Mitchell is a very high quality person. He is probably an icon of integrity. We will be well served to have Senator Mitchell as long as he possibly can," he said.
Chen also said that there was no need to discuss cable operator Comcast Corp's $46 billion bid for Disney, which the board dismissed shortly after it was made in February and which lags Disney's share price by more than $2 per share.
That is not a "fair price" he said.
"Whether it is strategically correct or not is not something that needs to be discussed at this time," he said, adding that with double-digit returns forecast for Disney this year, "I don't think Disney needs to be sold at all."
The meeting will be the first chance for directors to analyze the results of the March protest vote, beyond their hasty gathering hours after the vote in March.
SOUL SEARCHING OR NON-EVENT?
"This board needs to do some fundamental soul-searching given what has happened," said Charles Elson, director of the Center for Corporate Governance at the University of Delaware.
But many Disney watchers have not seen signals of a major change, such as Eisner's dismissal.
"I think it is going to be a non-event," Bill Thomas, head of U.S. equities for Baring Asset Management, said ahead of the meeting. His funds began buying Disney last fall.
Mitchell in February said the board on the first day of the meeting would discuss CEO succession, excluding management from at least some of the talks. Eisner briefed non-management directors on the subject in January and the board talked then.
"It was not an effort to reach a decision, but to have an in-depth discussion," Mitchell said on a conference call hosted by proxy advisory Glass Lewis in February .
Other issues that might be discussed include the election of another independent director this year, March quarter results that will be reported May 12 and future strategy, analysts said. (Additional reporting by Wei Gu in New York)
