Eisner Foes Roy Disney, Gold Seek to Speed His Departure

Former Walt Disney Co. directors Roy E. Disney and Stanley P. Gold said Monday that they would nominate a new slate of directors unless the board moved to replace Chief Executive Michael Eisner before the annual shareholder meeting in March.

In an open letter to directors, the two dissidents called for the immediate hiring of an executive recruiting firm to conduct a worldwide search for a new CEO. And they demanded that Eisner, who announced last week that he would resign at the end of his contract in September 2006, be forced to step down once a replacement is found.

“We believe it is intolerable for Michael Eisner to continue to hold the company hostage for two more years -- and perhaps longer,” the letter stated.

Gold and Roy Disney accused Eisner of seeking to retain his control over the Disney empire by aiming to name his own successor, Disney President Bob Iger, and by positioning himself to become chairman after relinquishing the CEO post.

Eisner has called Iger his first choice for the job but has stressed that he would defer to the board in selecting a CEO.

“While Mr. Eisner’s announcement at first blush looks like a major change, it is in truth mere window dressing,” Gold and Roy Disney wrote. “His ‘succession plan’ is for a company led by Michael Eisner and his obedient lieutenant Bob Iger to be handed over to ... Michael Eisner and Bob Iger.”

According to a person close to the company, Eisner has repeatedly suggested to board members over the last year that he would like to become chairman after stepping down as CEO.

Disney spokeswoman Zenia Mucha called that claim “completely false.” Eisner is “not seeking the role of chairman,” she said.

In a statement, Chairman George J. Mitchell said the board was “fully aware of the importance of the task of succession planning and the responsibilities we bear to all shareholders.”

Gold and Roy Disney are hoping to marshal the support they enjoyed in March when the company’s annual meeting culminated in a shareholder revolt. Investors representing 45% of voting shares withheld their support for Eisner’s reelection to the 11-member board. Disney directors immediately stripped Eisner of the chairmanship and tapped Mitchell, a former U.S. Senate majority leader

It’s uncertain whether Gold and Roy Disney will have the same influence at next year’s shareholder meeting, given the company’s improved earnings. Disney profit is expected to rise 50% this fiscal year.

Gold and Roy Disney argue that the recent upturn in earnings is unsustainable and that Disney’s stock price and annual earnings are about the same as they were in the late 1990s. Analysts agree that there are enduring problems, including the ratings woes at its ABC television network and the spotty record of the company’s once-storied animation division.

Eisner’s announcement followed a turbulent year in which he fended off the shareholder revolt and an unsuccessful takeover bid by Comcast Corp.

For their part, Gold and Roy Disney contended in their letter that Eisner, who presided over the expansion of Disney into a global entertainment powerhouse, was putting his own interests ahead of those of shareholders, saying that “he has hijacked your duties as directors.”