LPWire: Roy Disney and Stanley Gold Comment on Glass Lewis Withhold Recommendation
Roy Disney and Stanley Gold Comment on Glass Lewis Recommendation For Shareholders to Withhold Votes on Michael Eisner and George Mitchell
Roy E. Disney and Stanley P. Gold said that the recommendation today by Glass, Lewis & Co. to withhold votes from Michael Eisner and George Mitchell in the upcoming election of directors of the Walt Disney Co. at its annual March 3 shareholder meeting, "provides another important validation of our position that significant change is needed at the Walt Disney Company."
The Glass Lewis report states in part:
- "... shareholders interests are best served by
a board that is on notice that shareholders are watching and have not
forgotten past indiscretions. Here, those past faults are many. The Disney
board has been notoriously insular, famously gullible and blindly loyal to Mr.
Eisner."
- "... while the corporate world is watching carefully the fate of the
Disney directors, investors should be heard to say in unison: we will
hold directors' feet to the fire for present and past transgressions."
- "... given the control Mr. Eisner is accustomed to, we are troubled
that he still wields tremendous power over the operation of this
board ..."
- "our issues with Mr. Eisner relate to his interaction with the board and shareholders. And our concerns are substantial."
Addressing its recommended "withhold" vote for Mr. Mitchell, the Glass-Lewis report stated:
- "Our concerns with Mr. Mitchell are two-fold. First, we do not
believe he is independent in the true spirit of independence. We
believe it hard for a person to transition from "hired hand" of the
CEO (as lawyer and consultant to the Company) to independent overseer
of management, especially as the leader of the independent directors.
Mr. Mitchell and his law firm, until quite recently, received large
sums of money at the behest of Mr. Eisner. As Chief Justice Veasey of
the Delaware Supreme Court succinctly put it: "I don't think, for
instance, that lawyers who get substantial fees from a corporation can
be considered independent directors for most purposes."
- "Second, we note that some of Mr. Mitchell's actual decisions as presiding director appear to have been flawed. Mr. Mitchell became the presiding director in December 2002. In that role, as noted, Mr. Mitchell is to provide advice on the appointment of committee chairs. In the proxy issued in early 2003, Mr. Bryson was nominated to serve as the chair of the nominating and governance committee. Presumably, this occurred on the advice of Mr. Mitchell. But Mr. Bryson was not an appropriate choice for the chairmanship of that committee; at the time, his wife was a senior executive of a Disney joint venture and had substantial commercial dealings with Disney. Whatever the NYSE or Disney's independence rules happen to say, we believe that Mr. Mitchell should have known better than to suggest that Mr. Bryson ought to be the chairman of the very committee that is supposed to judge the independence of directors and improve the governance of the Company."
Messrs. Disney and Gold stated that the Glass, Lewis recommendation, coupled with recent recommended "withhold" (No) votes for Mr. Eisner by another major independent proxy advisory firm and the recommendation of "withhold" (No) votes for Messrs. Eisner and Mitchell by a prominent corporate governance expert, "provides increasing support to our comments about the management and Board of the company, as well as an indication of growing dissatisfaction with Mr. Eisner's rigid control of the Disney board and that board's lack of responsiveness to shareholders."
They added, "We believe it is important that Disney shareholders be heard. Please add your voice to those telling the board that it is time for new leadership at The Walt Disney Company. Shareholders have suffered long enough from poor performance. If you feel, as we do, that it is time for change -- Vote No on Michael Eisner and nominees George Mitchell, John Bryson and Judith Estrin by marking your proxies 'withhold' on these nominees. Vote by telephone, internet or mail. If you need assistance in voting, please call MacKenzie Partners toll-free at 800-322-2885."
--Posted February 25, 2004
Source: Roy Disney and Stanley Gold