43% of Disney Voters Don’t Endorse Eisner

Philadelphia -- The Walt Disney Co. shareholders sent a strong message to chairman and CEO Michael Eisner, withholding about 43% of the votes for his re-election to the board of directors at the entertainment icon’s annual shareholders meeting here Wednesday.

According to Disney, 771,691,297 votes were withheld for Eisner, while 1,007,715,682 were in favor of his re-election to the board.

The vote was the capper to what was often a raucous annual meeting -- held here because Disney owns a major television station in the city.

In an unusual move, Disney allowed dissenting former board members Roy Disney and Stanley Gold -- who have waged a three-month campaign to oust Eisner from the company -- about 15 minutes at the podium to voice their views.

After spending a few minutes outlining what he considered to be the transgressions of current Disney management -- paying too much for Fox Family Channel (now ABC Family) and for the ABC network -- Gold quickly got to the point.

"The board has a second chance to do what is right," Gold said. "No half measures, no excuses will be tolerated. Michael Eisner must leave now."

While Eisner was still elected to the board -- he was running unopposed -- the vote was a clear showing of shareholders’ lack of confidence in his leadership, and it could lead to changes down the road.

Several published reports have speculated that Disney’s board was considering stripping Eisner of his chairman’s title and keeping him as CEO, but Gold said that wouldn’t be enough.

"It is no longer sufficient to separate chairman and CEO," Gold said. "Today’s meeting is the first step in refining the company. We’re no longer looking for cosmetic changes."

Roy Disney criticized management for what he called "institutional thinking," adding that he also objected to management’s constant references to the Disney "brand."

"That degrades the Disney name," Roy Disney said. "Branding is something that you do when there is nothing original about your products."

Eisner thanked both men -- after they were done, he said it was "always a joy" -- but he stressed that both Gold’s and Roy Disney’s arguments were fundamentally wrong.

Disney, Eisner said, is on track for 30% earnings growth during the next three years, and the company’s stock price has risen 60% this year alone.

Eisner called his management team "first-rate" and added that his dispute with Gold and Roy Disney centered around a disagreement as to the direction of the company after the Sept. 11, 2001, terrorist attacks in New York and Washington, D.C.

"I love this company," Eisner said at the beginning of the meeting. "The board loves this company. And we are all passionate about the output of this company."