If The Walt Disney Co. CEO Michael Eisner thought his decision to resign after his contract expires in 2006 would take some of the pressure off him and his management team, then he was mistaken.
Former Disney Co. director Roy Disney threatened to launch a proxy fight for a new slate of company directors unless the board finds a replacement for Eisner before his contract ends in 2006.
Roy Disney, a vocal opponent of Eisner since he was ousted from the Disney board last year after reaching mandatory retirement age, wrote a letter to the Disney board last Monday, outlining his terms.
Roy Disney owns about 17 million Disney shares, making him No. 18 shareholder in the company. He is the nephew of the late Disney founder Walt Disney.
Disney and his long-time financial adviser and fellow dissident shareholder Stanley Gold launched an effort at the company’s annual meeting in Philadelphia last March to withhold votes for Eisner’s election to the board of directors.
While Eisner won that election, he agreed to relinquish his chairman title and received an unprecedented vote of no confidence, as 45% of shareholders withheld their votes.
Eisner announced on Sept. 10 that he would resign when his contract expires on Sept. 30, 2006.
In a letter to the board written with Gold, Roy Disney said that while Eisner’s resignation has put the board in a difficult position, it would be “intolerable for Michael Eisner to continue to hold the company hostage for two more years.”
The letter also objected to the possibility that Eisner could still continue as chairman of Disney after retirement, and objected to his hand-picked successor for the job, current Disney president Robert Iger.
“In other words, his [Eisner’s] 'succession plan’ is for a company led by Michael Eisner and his obedient lieutenant, Bob Iger, to be handed over to … Michael Eisner and Bob Iger,” the letter stated.
Disney asked the board to immediately begin a search for Eisner’s successor using an independent executive-recruiting firm, and to concurrently announce that Eisner will retire as CEO and a member of the board of directors at the conclusion of that search.
The letter stated that if that course of action is not taken, Roy Disney and Gold will “oppose with unrelenting vigor directors who continue to support drift, delay and decay. Should the board not take the actions proposed … we intend to take our case directly to our fellow stockholders and propose an alternate slate of directors committed to moving the company forward aggressively.”
Roy Disney wasn’t alone in his displeasure. On Sept. 10, the California Public Employees Retirement System, one of the largest holders of Disney shares, issued a statement that Eisner’s “continued presence on the board would prevent the company from the clean break that is needed to restore investor confidence.”
Disney spokesman John Spelich did not return a call for comment.