Just hours after beleaguered Walt Disney Co. top dog Michael Eisner received a strong vote of no confidence at the entertainment giant’s annual meeting Wednesday, Disney’s board stripped Eisner of his chairman’s title, hoping to appease disgruntled shareholders.
Shareholders withheld 43% of their votes for Eisner’s re-election to the board -- a message the board obviously could not avoid.
At about 8:30 p.m. (EST) Wednesday, Disney issued a statement saying that it was separating the positions of CEO and chairman, naming current Disney director and former Sen. George Mitchell -- already presiding director of the board and chairman of its executive committee -- to the newly created position of chairman of the board.
Eisner will remain CEO.
Shareholders are no fans of Mitchell, either -- they withheld 24% of their votes for his re-election to the board Wednesday.
In its statement, the board reiterated its support of Eisner and his management team, while acknowledging that shareholders had called for more sweeping changes.
At Wednesday’s annual meeting, former directors Stanley Gold and Roy Disney -- who have waged a three-month campaign to oust Eisner and his management team -- said separating the chairman and CEO roles was not enough.
"Michael Eisner must go now," Gold said at the meeting.
In its statement, Disney said that while it understands that shareholders have several issues with the company, it believed that a significant message conveyed by the withholding of votes for Eisner concerned corporate governance.
"That is not to say that we view the vote as limited to governance issues alone," Disney said in the statement. "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."
Disney is also trying to fend off an unsolicited bid from Comcast Corp. to buy the entertainment icon. Comcast issued its own statement Wednesday, calling the vote a powerful message to Disney management to focus more on shareholder issues.
"Consistent with this focus, Disney's independent directors should immediately meet with Comcast so we can directly present our full and generous proposal and the benefits of the merger," the MSO said.
Comcast did not offer to increase its bid, which has been rejected by Disney’s board as too low. Disney appeared to be unimpressed.
"With respect to the statement made by Comcast, the board of directors stated that it does not believe today’s reiteration by Comcast of its previous proposal, which we rejected as inadequate, would lead to a transaction beneficial to Disney shareholders," Disney said in its statement. "The board will carefully review and analyze any reasonable proposal."
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