No Rain On Parade Of Eisner's Disney Dollars

Eric Ellis, Anaheim

02/27/1997

MICKEY Mouse was the MC, Sidney Poitier did a guest spot, a Supremes-style chorus in white satin togas performed an upbeat tribute to the Greek god Hercules as pyrotechnics and roving spotlights raked the rapt audience.

Where were we? Carnegie Hall, Madison Square Garden, the Hollywood Bowl?

No, the 1997 shareholder's meeting of Walt Disney Company; Corporate America on parade. The 10,000-strong crowd which crammed into the ice hockey home of Disney's Mighty Ducks roared its approval at the entertainment.

"I'd pay to see this," said shareholder Don Dryberg, who had only come from nearby Corona.

Don was. Not only was there the cost to the company of the hoopla but the lining of the pockets of two other famous Mickeys of showbiz, Disney chairman Michael Eisner and recently-deposed president Michael Ovitz.

The hottest item on the agenda was the proposed new 10-year Eisner contract that critics claim is worth up to $US400 million.

Eisner has already pulled more than $US250 million from Disney in stock and pay since 1984 but Disney has also been a stellar performer.

Disney's annual sales have risen from $US1.5 billion to $19 billion and Mr Eisner reminded the throng that a $US1000 investment in Disney in 1984 would be worth $22,274 today.

However the past few years have seen a slowing in growth and shareholders like Calpers, the California state pension fund, and its counterpart in New York have become restive.

The blowtorch applied to the polished Mr Eisner's belly got a little warmer during the week when the powerful College Retirement Equities Fund, which controls 1 per cent of Disney stock, said the Disney board had begun to look like Eisner's plutocracy.

It does. Although Disney claims 12 of its 16 directors are independent, a number of them boast very close connections to Mr Eisner - his children's former principal, the director of his son's university, his personal lawyer and an architect who designed a ski lodge for him.

And there was, until recently, Michael Ovitz, who left last November taking a now notorious $US100 million-plus settlement for 14 months in which he seemed to do more harm than good to Disney. Eisner acknowledged that Ovitz' hiring was an, er, mistake.

"The cost to the company, as high as it was, would have been much higher if we had stayed the unstayable course," Eisner said.

But, in the end, more than 88 per cent of the votes were in favour of Eisner's new contract. Ovitz' deal could only be marvelled at.

"To recognise a mistake is one thing but to reward a mistake is another," one shareholder said.

Mr Eisner replied: "It won't happen again".

Shareholders also approved a new cash bonus performance plan for executive officers and supported the re-election of five board members, despite the objections of the pension funds.

Mr Eisner also saw off a challenge to compel Disney not to make its licensed merchandise in Haitian sweatshops.

"It would take a Haitian 16.8 years to earn Eisner's hourly income of $9,783," said one protester, while another representing a religious group said he was "not upholding the values of the Magic Kingdom" in the wages it paid to Haitian workers. The motion was defeated 7-1.