Written by Robert Niles
Published: September 20, 2004 at 10:00 AM
Dissident shareholders vow board fight if Eisner doesn't step down soon
Orlando Sentinel -- Sept. 17
The Disney board is set to meet in L.A., starting today. The Sentinel sets the stage for the meeting with a look at the supposed pressure Disney chairman George Mitchell is under to find the right successor for Michael Eisner. The only pressure Mitchell's feeling is from Eisner's hand reaching through his back to make his mouth move. Look, Mitchell's talking while Michael Eisner's drinking a glass of water! How do they do that?
Roy and Company promise to send more mass e-mails and hold more press conferences if the board doesn't pick a candidate they like.
Whom do *I* like? Since my man Bill Clinton's laid up right now, I say go for Steve Jobs. At least then the Mickey-eared Disney computers wouldn't crash as often... and we could get the "Impressions de France" soundtrack on an iPod. And, oh yeah, Pixar would likely stick around since the two companies would have the same CEO. In fact, a wholesale Pixar takeover of the Walt Disney Studios sounds about right to me.
Ride from hell: Horror as man killed at church fair
Boston Herald -- Sept. 20
Two mentally retarded men were thrown from a scrambler-type ride at a church fair in Shrewsbury, Mass. Sunday. Both victims were taken to a local hospital, where one, an unidentified 38-year-old man, died. The second, a 48-year-old, was in serious condition. Witnesses said one of the ride's cars was damaged in accident, with its side ripped open and metal seat missing. No official word on how or why the two men fell out of the ride, however. Authorities are investigating and the ride operator was brought in for questioning.
In other theme park-related news...
Universal Studios Hollywood has announced that it has started running its famed studio tour in Spanish as well as English. This isn't a translation, using tapes or audio wands, made available to riders who request it, as at many other theme parks. It's a full-fledged Spanish version of the tour, complete with Spanish-speaking hosts. Check Universal's show guide when you visit for the special tour times. From the park's press release:
Coinciding with Latino Heritage month, Universal Studios Hollywood, the world's largest movie studio and theme park, has enhanced its signature Studio Tour attraction with a new "Studio Tour en Espanol" hosted by the acclaimed Latina celebrity Maria Celeste Arrarás.Offered multiple times daily, the Spanish language tours, narrated by the popular television personality, will take guests along a 45-minute journey through the famed studio's 415 acres, showcasing the many soundstages and working movie sets where today's filmmakers and celebrities create some of the world's most famous movie and television productions.
As the new celebrity host of Universal Studios Hollywood's "Studio Tour en Espanol," Arrarás will introduce guests to the glamour of Hollywood filmmaking through a series of video vignettes showcased on the tram's state-of-the-art LCD flat-screen monitors.
Spanish-speaking studio tour guides, armed with an encyclopedic knowledge of the studio's history and its current production schedule, will also provide commentary as guests pass the locations of over 8,000 motion pictures.
Actually, ABC could REALLY have a great reality show by showing the whole good, bad and ugly of the excrutiatingly political process of picking the new CEO. I, for one, would turn in EVERY WEEK!!!
Hey, Iger, rip off *this* idea! Please!
Still looking for a name to replace him. Considering GE's distate for the Universal parks and Newsweek's report that former Viacom President (and Eisner succession candidate) Mel Karmazin "loathes theme parks," I'm beginning to wonder if the world's best and brightest executives have absolutely zero interest in the Disney CEO position.
September 21, 2004
STATEMENT OF THE BOARD OF DIRECTORS OF THE WALT DISNEY COMPANY
BURBANK, Calif., Sept. 21, 2004 -- At a regularly scheduled meeting which concluded today, the Board of The Walt Disney Company (NYSE: DIS) took the following actions:
1. The Board reaffirmed its strong support for Michael Eisner, Bob Iger, and the entire management team. The Board noted that the Company's performance has been strong, with a greater than 50% increase in earnings projected in the current fiscal year and, barring a downturn in the environment, double-digit growth in earnings targeted through at least 2007. The Company is also on track to deliver record free cash flow in fiscal 2004, up from the previous record set last year.
The Board took special note of the fact that today marks the 20th anniversary of Michael Eisner's service as Chief Executive Officer. The Board formally acknowledged Michael's recent decision regarding the CEO position, thanked him for his outstanding creative leadership, and looks forward to his continued leadership through the rest of his tenure.
The Walt Disney Company's condition and prospects are excellent. It has strong and effective leadership. The Board is committed to keeping the Company on the right path, the creative path, the path to attractive economic returns and value creation for our shareholders.
2. The Compensation Committee approved a redesigned Management Incentive Bonus Program for its senior executives and managers to further clarify and formalize the company's practice of linking executive compensation and performance. The Management Incentive Bonus Program is one component of the company's overall executive compensation program, which also includes salary and long-term incentive compensation.
Under the new program, which takes effect for Disney's 2005 fiscal year beginning October 1, 70% of the annual bonus compensation determination for the most senior corporate executives and 70% of the bonus pool determination for other corporate executives and managers will be based on performance against specific financial measures established at the outset of each fiscal year by the Compensation Committee. For fiscal year 2005, the company-level financial performance metrics relevant to the bonus and bonus pool determinations will include targeted levels of operating income, economic profit (operating profit after taxes and a charge for capital employed), after-tax free cash flow and earnings per share.
The remaining 30% of the determination will be based upon the Committee's assessment of other individual, company-wide or business segment performance objectives. The most senior corporate executives' bonuses will also be subject to further adjustment up or down by as much as 20%, depending upon how the company's earnings per share (EPS) performance for the year compares to EPS performance of the Standard &Poor's 500 Index of companies over the same period.
In the case of the most senior executive officers, the new program will be subject to additional performance criteria and payment limitations under the Company's 2002 Executive Performance Plan, as approved by the Company's stockholders, allowing these bonuses to be tax deductible to the Company under Section 162(m) of the Internal Revenue Code.
For executives and managers at the company's business segments, 50% of the bonus pool determination will be based on segment-level financial performance and 50% will be based on performance against the company-level financial goals and other objectives.
"By further clarifying and making more formal the company's practice of linking bonus compensation and financial performance, the Board is underscoring its commitment to strong governance and to motivating and holding accountable the management team in a way that drives meaningful shareholder value," said Judith Estrin, Disney director and chair of the Compensation Committee. "The Compensation Committee and the Board believe this redesigned bonus compensation program will allow Disney to attract, retain and motivate the best talent in the world by rewarding outstanding performance while ensuring that the company's leaders' compensation is thoroughly aligned with the interests of shareholders. The plan focuses on the key drivers of long term shareholder value and will help reinforce management's commitment to these important financial metrics."
For more information on Disney's redesigned Management Incentive Bonus Program, see www.disney.com/investors.
3. The Board will engage in a thorough, careful, and reasoned process to select as the next CEO the best person for the company, its shareholders, employees, customers, and for the many millions of others who care so much about The Walt Disney Company. The Board is keenly aware of the special place our company holds in the hearts of people all over the world and the importance of its responsibility in choosing a CEO.
To achieve its objective, the Board will:
1. Engage an executive search firm to assist it in selecting a CEO who possesses the qualities and experience the Board believes are necessary for this important position.
2. Consider both internal and external candidates. Bob Iger is the one internal candidate. He is an outstanding executive and the Board regards him as highly qualified for the position. However, the Board believes that the process should include full consideration of external candidates as well.
3. Complete the process and announce a successor as soon as possible, with an expected date of completion of June 2005.
4. Michael Eisner and the Board will work to assure a smooth and effective transition. The Board regards its responsibility on succession as so significant that all members should participate actively and fully in the entire process; and each has committed to do so.
4. Directors are elected for a one year term. The Board's retirement policy provides that "no Director may stand for reelection following the calendar year in which that Director turned 72 years of age." Senator Mitchell will turn 72 in August 2005. He has informed the Board that, if elected a Director at the 2005 annual meeting, he will act in accordance with the Board's policy and not stand for reelection at the 2006 annual meeting.
Following its announcement of a successor CEO, the Board will engage in thorough, careful, and reasoned review and will then select and announce a successor Chairman.
FORWARD LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of our views and assumptions regarding future events and business performance as of the time the statements are made and we do not undertake any obligation to update these statements. Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives and information technology improvements, as well as from developments beyond the Company's control, including international, political, health concern and military developments that may affect travel and leisure businesses generally and changes in domestic and global economic conditions that may, among other things, affect the performance of the Company's theatrical and home entertainment releases, the advertising market for broadcast and cable television programming, expenses of providing medical and pension benefits and demand for consumer products. Changes in domestic competitive conditions and technological developments may also affect performance of all significant company businesses. Additional factors are set forth in the Company's Annual Report on Form 10-K for the year ended September 30, 2003 under the heading "Factors that may affect forward-looking statements."
Source: The Walt Disney Company
1. Peter Chernin - Current Chief Operating Officer of Newscorp. He has indicated on multiple occassions he is not interested in leaving Newscorp. Further his salary last year was $28 million -- much higher than EIsner's. To get Chernin Disney will have to spend a ton of money.
2. Jeffrey Bewkes - Chairman of Time Warner Inc.'s entertainment and networks group. Newsweek reported earlier this year that Eisner tried to recruit Bewkes earlier this year. Beyond his work at Time Warner, Bewkes is credited for turning HBO into an entertainment powerhouse. In his six years at the helm, Bewkes built the cable network into one of the hottest properties on TV. Bewkes could be the man to turn ABC around and generate a ton of cash for the company.
3. Mel Karmazin - former President of Viacom. He's available but -- as I mentioned above -- Newsweek reports that he loathes theme parks. Further, you have to wonder whether or not dissident shareholders who hold such disdain for the way Eisner has allegedly neglected Walt Disney's values, would welcome the man who brought us (ahem) Howard Stern.
4. Terry Semel - Yahoo Inc. chief executive. Semel is credited with building Warner Bros. from a single revenue source generating less than $1 billion to nearly $11 billion total revenues from multiple, diverse businesses in 50 countries. Prior to Warner Bros., Semel managed Walt Disney's Theatrical Distribution division, and CBS' Theatrical Distribution division.
5. Les Moonves - Head of CBS and Viacom Inc's co-President. Most recent name to hit the watch list. Like Bewkes, Moonves could have the chops to turn ABC around.
6. Stephen Burke - CEO Comcast. Despite Comcast's laughable attempt at taking over Disney, Burke's history with the company keeps his name in consideration.
7. Robert Iger - President Disney. The board has publicly stated that Iger has the qualifications. But the miserable performance of ABC on his watch and his close affiliation with Eisner will not gain any favor with dissident shareholders.
8. Paul Pressler - CEO Gap. Honestly I have no idea why the board would consider Pressler. He was not well-liked by WDI and he turned tail and ran away from the company when the going got rough. Like Iger, Pressler is not liked by the dissident shareholders.
9. Meg Whitman - CEO eBay. Her prior tenure at Disney and success with the on-line auction company have brought her name to the forefront. However Richard Verrier reported in the LA Times that she has gone out of her way to tell everyone she isn't interested.
10. Steve Jobs - CEO Apple/Pixar Animation Studios. Stan Gold said Jobs is on his "very short list." Certainly Mr. Jobs' accomplishements with Apple and Pixar are extraordinary. But beyond every other candidate -- save Iger -- Job has had the opportunity to show interest in the position. He really hasn't. Further, Mr. Jobs' reputation for being a micromanager rivals Eisner's. Finally his experience in film production is a tad limited.
Personal favorites: 1. Chernin because he is such a powerful figure. 2. Bewkes because he is young and has a dynamite track record when it comes to programming. 3. Semel because of his previous work at Waner Brothers.
Lingering question: Which candidate (either listed here or elsewhere) does Roy Disney prefer?
However, I find myself continuoully rooting for Steve Jobs. Why? Because he seems to have what it takes. And, of course, Pixar. I think a whole-hearted Pixar takeover of Disney animation is needed. It'd kinda be like ripping out the dead heart and putting a new one in. Animation is the heart of Disney. And Pixar is the heart of this new wave of CGI blockbusters. Call me sentimental, but I think Walt would love that idea.
Kevin Baxter - Theme Park Insider funny man and overall good guy.
Need I type more?
As for successor, it is now widely believed that Eisner announced his retirement to groom Iger (BLEAH) to be his successor. Even though Iger is the only one who wants him to be CEO. Why? Because then Iger could repay the favor by naming Eisner Chairman. The position so many stockholders wanted him out of!!! How long would that crap last?
Chernin, Bewkes or Semel.
Forgive my ignorance but why does everyone hate(if they do) this Eisner guy? I'am not into all this business type of stuff (forgive ignorance again). Could someone please tell me in plain english what this is all about?