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Sat, Feb 28, 2004 - Page 12 News List

Opposition mounts to Eisner's staying as Disney's leader


The shareholder protest aimed at Walt Disney Co chief executive Michael Eisner is expected to see more than 30 percent of shares cast at next week's annual meeting effectively opposing his re-election as chairman of the company's board, a Disney source said.

That show of discontent with Eisner's stewardship of the entertainment conglomerate would be much more widespread than first anticipated by analysts.

Disney would be inclined to see the result as a referendum on whether to separate the roles of chief executive and chairman, the source said.

Roy Disney -- the nephew of company founder Walt Disney -- and Stanley Gold launched what was first seen as a longshot campaign against Eisner and three other Disney directors after leaving the Disney board late last year.

Most analysts had initially assumed that Disney's improved results and rebounding share price would limit the impact of that campaign for major fund managers.

Disney shares have gained almost 90 percent since bottoming out in August 2002. The stock jumped earlier this month after Comcast Corp, the largest US cable television operator, announced an unsolicited, all-stock bid for Disney that Eisner and the board rejected.

In the past two weeks, two proxy advisers, Institutional Shareholder Services and Glass Lewis, have recommended that investors withhold their votes for Eisner, effectively opposing his reappointment. A range of public pension funds including those representing California and New York have signaled that they would do so.

Eisner spent Thursday wooing fund managers for Ohio's public pension system, who were courted earlier in the week by Roy Disney.

Disney believes that the ISS recommendation, in particular, will carry weight with investors controlling 30 percent or more of its shares when the vote is tallied at its annual meeting, scheduled for March 3 in Philadelphia, a person familiar with the matter said.

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