Disney Tries to Pacify Pension Funds

Author:
Publish date:

The Walt Disney Co. made good on its promise to meet with representatives from seven pension funds that have been critical of the media giant, outlining some plans for management succession and reiterating that its board of directors firmly supports CEO Michael Eisner.

In a prepared statement, Disney said it discussed short- and long-term financial performance and trends; a review of its corporate-governance guidelines, including duties for the chair; director independence; the board's ongoing search for a new independent director; and succession planning for the CEO and other senior executives.
However, Disney did not release details on those discussions.

Attending the meeting were chairman George Mitchell, chief financial officer Tom Staggs and president and chief operating officer Bob Iger. Independent-director attendees were Judith Estrin, chair of the compensation committee; Monica Lozano, chair of the governance and nominating committee; Robert Matschullat, chair of the audit committee; and Aylwin Lewis. Eisner did not attend.

The seven pension funds -- which hold about 40 million Disney shares combined, or 2% of the company’s outstanding stock -- called for the meeting in March, after Eisner had received a strong vote of no-confidence at Disney’s annual shareholders meeting in Philadelphia.

Shareholders at that meeting withheld 45% of their votes for Eisner’s re-election to the board. Shortly thereafter, Eisner gave up his chairman’s title -- a position that was bestowed on Mitchell, also a member of the Disney board.

While the pension funds had originally called for Eisner’s ouster, that’s not going to happen, at least in the short term.

In the statement, Disney said that it stood behind Eisner, Iger and the rest of Disney’s management team, adding that the company is on track to meet its full-year guidance of 50% earnings growth.

Related