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02-27-2004, 07:22 AM
Original Article: Vote against Eisner could top 30% (http://money.cnn.com/2004/02/27/news/companies/disney_eisner.reut/index.htm)
Vote against Eisner could top 30%
Level of discontent over the Disney CEO is swelling ahead of next week's annual meeting.
February 27, 2004: 6:44 AM EST
LOS ANGELES (Reuters) - The shareholder protest against Walt Disney CEO Michael Eisner is expected to see at least 30 percent of the vote effectively opposing his re-election as chairman of the board, a person close to the media company said.
That level of discontent over Eisner's leadership at next week's annual meeting of the entertainment company would be much more widespread than first anticipated by industry analysts.
Disney would more be inclined to see the result as a referendum on whether to separate the roles of chief executive and chairman, the source close to Disney said.
Roy Disney -- the nephew of company founder Walt Disney -- and Stanley Gold launched what was first seen as a long shot campaign against Eisner and three other Disney directors after leaving the Disney board late last year.
Most analysts had initially assumed that Disney's improved results and rebounding share price would limit the impact of that campaign.
Disney stock has jumped almost 90 percent since bottoming out in August 2002. The stock also rose earlier this month after Comcast Corp., the largest U.S. cable television operator, announced an unsolicited, all-stock bid for Disney that Eisner and the board rejected.
In the past two weeks, two proxy advisers, Institutional Shareholder Services (ISS) and Glass Lewis, have recommended that investors withhold their votes for Eisner, effectively opposing his reappointment.
A range of public pension funds including those representing California and New York have signaled that they would do so.
Eisner spent Thursday wooing fund managers for Ohio's public pension system, who were courted earlier in the week by Roy Disney.
Disney believes that the ISS recommendation, in particular, will carry weight with investors controlling 30 percent or more of its shares when the vote is tallied at its annual meeting, scheduled for March 3 in Philadelphia, a person familiar with the matter said.
The Wall Street Journal reported in its Friday edition that mutual fund company T. Rowe Price had also decided to withhold its vote for Eisner.
Some analysts have suggested that if the protest vote against Eisner were to top 20 percent, that could force the hand of the company's board, already under intense pressure to demonstrate its independence. Eisner, like other Disney directors, is running unopposed.
One option urged by many analysts and ISS would be to split the roles of chairman and CEO at Disney.
Another option would be for the company to detail a succession plan and perhaps even a timetable for the departure of Eisner, 61, who has led Disney since 1984 and whose contract expires in 2006.
Vote against Eisner could top 30%
Level of discontent over the Disney CEO is swelling ahead of next week's annual meeting.
February 27, 2004: 6:44 AM EST
LOS ANGELES (Reuters) - The shareholder protest against Walt Disney CEO Michael Eisner is expected to see at least 30 percent of the vote effectively opposing his re-election as chairman of the board, a person close to the media company said.
That level of discontent over Eisner's leadership at next week's annual meeting of the entertainment company would be much more widespread than first anticipated by industry analysts.
Disney would more be inclined to see the result as a referendum on whether to separate the roles of chief executive and chairman, the source close to Disney said.
Roy Disney -- the nephew of company founder Walt Disney -- and Stanley Gold launched what was first seen as a long shot campaign against Eisner and three other Disney directors after leaving the Disney board late last year.
Most analysts had initially assumed that Disney's improved results and rebounding share price would limit the impact of that campaign.
Disney stock has jumped almost 90 percent since bottoming out in August 2002. The stock also rose earlier this month after Comcast Corp., the largest U.S. cable television operator, announced an unsolicited, all-stock bid for Disney that Eisner and the board rejected.
In the past two weeks, two proxy advisers, Institutional Shareholder Services (ISS) and Glass Lewis, have recommended that investors withhold their votes for Eisner, effectively opposing his reappointment.
A range of public pension funds including those representing California and New York have signaled that they would do so.
Eisner spent Thursday wooing fund managers for Ohio's public pension system, who were courted earlier in the week by Roy Disney.
Disney believes that the ISS recommendation, in particular, will carry weight with investors controlling 30 percent or more of its shares when the vote is tallied at its annual meeting, scheduled for March 3 in Philadelphia, a person familiar with the matter said.
The Wall Street Journal reported in its Friday edition that mutual fund company T. Rowe Price had also decided to withhold its vote for Eisner.
Some analysts have suggested that if the protest vote against Eisner were to top 20 percent, that could force the hand of the company's board, already under intense pressure to demonstrate its independence. Eisner, like other Disney directors, is running unopposed.
One option urged by many analysts and ISS would be to split the roles of chairman and CEO at Disney.
Another option would be for the company to detail a succession plan and perhaps even a timetable for the departure of Eisner, 61, who has led Disney since 1984 and whose contract expires in 2006.