LPWire: Enormity of Vote Against Eisner Leads CalPERS to Call for His Resignation by Yr End

Enormity of Shareholder Vote Against Eisner Leads CalPERS to Call for Eisner's Resignation by Year End; CalPERS Seeks Orderly Transition

Noting that a stunning 43 percent of shareholder votes were withheld from Michael Eisner, the California Public Employees' Retirement System (CalPERS) today said it now believes he should step down as Chairman and Chief Executive Officer of The Walt Disney Company by year's end and urged the Disney board to begin a succession plan immediately.

CalPERS is also calling on the board to end the era of a combined chairman and CEO and split the two positions to promote true independence and accountability in the future.

"This discontent is too wide and way too deep in the marketplace, and it has led us to believe that Eisner should go and the Board should get quickly to work on planning for an orderly transition," said Sean Harrigan, President of the Board of Administration. "While Mr. Eisner has made some noteworthy contributions in the past, the long term performance of the company, plus the resounding lack of confidence expressed by shareholders bring us to the conclusion that The Disney Company needs to resolve this situation and move on."

Harrigan said simply having Eisner give up one of his roles is not enough, nor should he remain on the board. His continued presence after a new chair and CEO are installed would be counterproductive, he said.

"We urge the board to be thoughtful in their process, but exercise the courage to do the right thing for the long-term future of the company and its shareholders."

CalPERS still remains concerned about the independence of Disney's auditor, and urges the Board to ban PriceWaterHouse Coopers from performing any non-auditing functions for the Company.

"The recent history of accounting scandals associated with auditing firms performing consulting services should serve as a reminder to every Board of Directors that auditor independence must be absolute, and we demand that the Disney Board correct this conflict of interest," said Harrigan.

CalPERS owns more than 9.9 million shares of Disney stock valued at approximately $235 million.

CalPERS is the nation's largest public pension fund with assets of approximately $167 billion. The System provides retirement and health benefits to 1.4 million Sate and local public employees and their families. For more on CalPERS, visit www.calpers.ca.gov.

--Posted March 3, 2004
Source: CalPERS