Walt Disney on Wednesday night said it would split the role of chairperson and chief executive after an unprecedented 43% of shareholders withheld their support for Michael Eisner’s re-election at the company’s rowdy annual meeting.
The company said Eisner would remain as chief executive while presiding director George Mitchell would step up to fill the chairperson’s role.
Investors’ frustration had been immediately clear at the rambling five and a half hour event in Philadelphia. Eisner’s claims that Disney is on the right track were met with a muted ripple of applause. When dissident shareholder Roy Disney — given 15 minutes to press his case for Eisner’s removal — took the stage he was met with a thunderous response.
Almost half the assembly gave him a standing ovation, cheering and whistling.
Eisner, who appeared to be losing his voice, opened the meeting with a barely disguised rebuttal of Disney’s chief criticisms as well as the unsolicited $60-billion offer from cable company Comcast three weeks ago.
Two retiring directors also launched an impassioned defence of Eisner, and Mitchell tried to deflect allegations that he rides roughshod over the board. ”We argue, we debate, and at the end of the day the majority rules.”
Comcast said the bigger than expected revolt sent a signal ”loudly and strongly” that man agement was not properly representing investors and urged the board to reconsider its offer.
The event was pure Disney. Dozens of Mickey Mouse statues were in the foyer of the convention centre. But the atmosphere was anything but magical for Eisner.
The Disney boss is under intense pressure after years of financial underperformance. Recently, investors were further angered when he failed to renew a distribution deal with Pixar, the studio behind Finding Nemo and Toy Story.
Disney and another former board member, Stanley Gold, quit in November to launch a campaign against Eisner. Gold said: ”This is an unprecedented no-confidence vote in the annals of American business.”
The board, he said, ”can no longer pretend” that everything is fine. ”Our message has resonated loud and clear. No excuses, no half-measures, no amount of spinning will be tolerated. Shareholders have spoken too clearly. Michael Eisner must leave now.”
Disney appealed to sentiment: management was betraying ”an authentic American icon”. Returning to the stage, Eisner responded: ”Thank you, Roy, thank you, Stanley, that was a joy.” He described the comments as ”rhetoric that replaces reason”.
Almost 396-million votes were withheld from Eisner with just over 1-billion supporting his re-election.
Shareholders outside hinted at the depth of feeling. Many said they had been encouraged to come to a meeting for the first time because of the management issues. Stephanie Graham, a company vice-president from Philadelphia, said: ”I feel the time has come that they could move on. It was the failure to renew the distribution deal with Pixar that bumped me over the edge.”
Ed Halbe, who runs a digital imaging shop, said: ”It’s time for change. My stock hasn’t done well. I bought the shares 11 years ago and the return has been 8%. That’s not bad, but if it were done right this company has huge potential.” – Guardian Unlimited Â