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President of Walt Disney Co. Comes Under Pressure to Resign - 2004-03-03

The president of the Walt Disney Company, Michael Eisner, is under pressure to resign, amid concerns about the media giant's future. Results of a shareholders' vote indicated that close to half withheld their support from the company chief, to signal their protest at his continued leadership. Mr. Eisner indicated he is ready to take on his opponents.

Rival shareholders cheered and booed Disney chief Michael Eisner, as a shareholders' vote, seen as a referendum on his leadership, concluded. But Mr. Eisner made clear he would not go quietly. "I love this company. The board loves this company, and we are all passionate about the output from this company," he said.

Mr. Eisner ran unopposed for re-election as the company's chief-executive, so he will keep his job, at least for now. But opponents Roy Disney and Stanley Gold campaigned to convince shareholders to withhold their support, as a vote of no confidence. Roy Disney, nephew of company founder Walt Disney, resigned from the company's board of directors in November. He says Mr. Eisner's management is no longer good enough for the Walt Disney Company.

"It is a factual issue that the company is being run poorly," he said.

Stanley Gold, who resigned from the board along with Mr. Disney, says even though the vote is over, they plan to keep up their efforts to force out Mr. Eisner. "We will continue this campaign to oust him. We will be here next week, next month, next year," he said.

A recent parting with the Pixar animation studio that produced such digital cartoon feature films as Finding Nemo and Monsters, Inc. depressed share prices. Mr. Gold and Mr. Disney argue that left the company vulnerable to a $48 billion takeover bid by shareholder Comcast Entertainment in mid-February. The takeover bid failed, but the attempt left Disney shaken.

Industry experts say it is possible that, rather than oust Mr. Eisner, the Walt Disney Company might split his duties, since he now functions as both chief executive officer and chairman of the company. Some of Mr. Eisner's supporters argue it would be best to wait to divide the duties until his contract expires in 2006.

In some ways, the ballot on returning Eisner to the board is symbolic, since there are no rivals to the company slate.

Disney officials are defending the company's performance, pointing to rising share prices in the past quarter, and predicting earnings growth of 30 percent per share in the next year.

They point to recent movie successes, such as Pirates of the Caribbean, which earned a best actor Oscar nomination for star Johnny Depp, as proof that the company's creative endeavors are thriving. Mr. Eisner himself told shareholders that, in his opinion, Disney's products are still at the top of the industry.

"No distribution organization can afford not to offer what we produce, whether their customers are watching our productions on a stage, or on a movie screen, or on a television screen, or on a computer, on a cell-phone, or a wristwatch, or even on the inside of their glasses," he said.

But how long he can hang on to his job remains to be seen.