Disney strips Eisner of one top job

PHILADELPHIA — The Walt Disney Co.’s board voted last night to split the roles of chairman and chief executive officer — just hours after shareholders delivered a staggering rebuke by withholding 43 percent of their votes for CEO Michael Eisner’s re-election to the board.

Disney directors voted unanimously to make board member George Mitchell the company’s new chairman and voiced their approval of Mr. Eisner’s management and the company’s strategy. He will remain chief executive officer.

The board also rejected a renewed overture from cable television giant Comcast Corp., saying it would serve no purpose to reconsider an offer already dismissed as too low.

Mr. Mitchell, a former U.S. senator from Maine, may also prove to be a controversial choice. Shareholders withheld 24 percent of their votes from his re-election yesterday — the second-highest total after Mr. Eisner. Mr. Mitchell has been criticized as being too close to Mr. Eisner and not independent enough because his law firm had worked for Disney in the past.

The board met after a raucous annual meeting here that was attended by some 3,000 shareholders, many of whom blame Mr. Eisner for Disney’s lackluster performance on Wall Street.

The shareholders cast slightly more than 1 billion votes in favor of re-electing Mr. Eisner, who ran unopposed. About 771.1 million votes of eligible votes were withheld.

The vote emboldened an investor revolt orchestrated by Roy E. Disney and Stanley Gold, two former board members who once championed Mr. Eisner but have become his loudest critics in recent months.

“The shareholders have spoken clearly: Michael Eisner must leave now,” Mr. Gold said during a speech to the investors before the votes were tallied.

Mr. Disney also spoke before the votes were counted. Like Mr. Gold, he accused Mr. Eisner of mismanaging the company, whose shares trade at the same price they sold for in April 1997. The Burbank, Calif., company’s stock has risen 57 percent in the past year.

Disney’s stock sold for $26.65 when trading on the New York Stock Exchange ended yesterday, an 11 cent drop from the previous day’s close.

The shareholders cheered Mr. Gold and Mr. Disney during their speeches, a sharp contrast to the tepid applause they gave Mr. Eisner, the executive who has led the world’s second-largest media conglomerate for 20 years.

“I love this company. The board loves this company and we are all passionate about the output from this company. … Your company has the management skills to continue its growth path,” Mr. Eisner told his audience at the Pennsylvania Convention Center.

Mr. Gold and Mr. Disney quit the board in November and began waging their campaign to oust Mr. Eisner, saying he was ineffective and the board was too timid to stand up to him.

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