A whopping 43% of Walt Disney Co. shareholders voted against retaining Michael Eisner as chairman and ceo today (March 3, 2004) in Philadelphia, delivering a stunning blow that lead to the Disney board of directors stripping Eisner of his chairman title within hours after the vote, the strongest rebuke in U.S. corporate history. The Disney board then elected former U. S. Senator George Mitchell to the newly created position of chairman of the board.
The Walt Disney Co. issued the following statement: While there appear to have been a number of different forces at work in the shareholder vote, a significant message conveyed in the vote was in the area of governance, as evidenced by governance-driven withhold recommendations by two influential proxy recommendation groups and the public and private statements by a number of other shareholders. In particular, there was substantial focus on the question of whether the chair and ceo functions at the company should be split.
That is not to say that we view the vote as limited to governance issues alone. We are aware that some voted for an immediate change in management and in the board. However, taking all of these factors into account, we believe the action we have taken today is in the best long-term interest of the shareholders of the company.
The statement went on to say that the board unanimously supports the Disney Co. management team and Eisner, as it remained confident in the strategic direction of the company.
"I love this company," Eisner hoarsely told the crowd of 3,000 shareholders. "The board loves this company. And we are all passionate about the output of this company."
That won't be enough to satisfy the growing legion of individual and institutional critics led by Roy Disney and Stanley Gold, who rallied the troops during their 15-minute denunciation.
"Shareholders have waited too long and have spoken too clearly," Gold said in prepared remarks. "Michael Eisner must leave now."
"We need to install a new management team, one that understands and believes in the enormously valuable legacy that's been entrusted to us," Disney added. "Speaking as someone with the last name of 'Disney,' it is my firm belief that we are not a commodity. As long as we continue to believe in the power of creative ideas, then our best years still lie ahead."
Comcast reiterated its previous proposal to purchase the Disney Co. on Wednesday, which the board said was still inadequate, but the group was willing to carefully review and analyze any reasonable proposal.