NEW YORK — “Aha!” exhaled Disney critics when the Mouse announced recently that chairman of the board George Mitchell would take home a generous half a million dollars a year for his service to the company.
That pay day, says Disney, is commensurate with Mitchell’s duties at the Mouse House since March. Michael Eisner continues to oversee the company’s activities as CEO.
While not wildly excessive, the pay for Mitchell is “certainly on the high end of the range,” says Patrick McGurn, senior VP and special counsel for proxy advisor Institutional Investor Services.
Mostly though, the news served to highlight gripes and snipes on a range of corporate governance issues from exec pay to succession planning that exploded at the company’s annual meeting this past March — and may well bubble over again next spring if not addressed.
“If directors do the job that’s expected of them, higher pay is warranted. If not, even one dollar is unwarranted,” McGurn says, adding, “The investment community has asked this board to do a lot, and they’ve made a lot of promises.”
“Our focus has moved away from Eisner to the board itself,” notes Brad Paceco, a spokesman for the giant California Public Employees Retirement System, or CalPERS, which owns 9 million Disney shares.
Reflecting the varied threads that continue to color l’affaire Disney, the entertainment industry is mostly agog over talk of a Miramax-Disney split. Financial analysts are obsessing about quarterly results. And it’s all fuel for Roy Disney and Stanley Gold, who are watching and waiting to pounce.
IIS was a powerful force in its urging clients, major financial institutions that own big chunks of Disney stock, to vote against Eisner’s re-election to the board. Many did just that and Eisner was forced to relinquish his chairman title to Mitchell.
Setting aside the former Senator’s qualifications for the job, the move may not be a long-term fix since Mitchell is seen by many as too close to Eisner and since Mitchell himself received a whopping vote of no-confidence at the shareholder meeting.
McGurn called Mitchell’s appointment “an acclamation-type election” and says the CEO shouldn’t be as involved in the process as Eisner was said to be. “We want policies on paper,” he says.
Paceco notes “signs of progress” at Disney since CalPERS and other large state pension funds met with Mitchell and other board members in late May.
For one thing, he says, Mouse folk seemed receptive to outside suggestions for independent directors to add to the board. CalPERS is preparing to furnish the board “names and characteristics.”
“It will be interesting as we get into the fall and the proxy season gets under way,” Paceco says.
Will investors be pacified by then? If not, there’s a new reg proposal floating around the SEC that could let sharholders propose their own slate of directors to run against Disney’s at the next March meeting.