Wilson sez superagent faltered early
The parade of Disney board members who have defended their decision to pay out $140 million to end Michael Ovitz’s tenure at the Mouse House continued Monday, as former chief financial officer Gary Wilson took the stand.
Wilson, now chairman of the board at Northwest Airlines, said cocktail-party chatter confirmed that Ovitz was not fitting into the company during two awkward trips abroad in 1996.
In June 1996, Michael Eisner, Wilson and Ovitz took a bike trip through France. During individual talks with the duo, Wilson came to understand that Eisner had “a very difficult time controlling the troops” when it came to gaining their acceptance of Ovitz.
Later in the year, Eisner asked Wilson to persuade Ovitz to leave the company during an upcoming trip Wilson and Ovitz were taking with their spouses in the Caribbean.
Thus, during the inaugural cruise of the boat they bought together, Wilson told Ovitz that he felt it was in the best interest of the company for Ovitz to leave.
“He was desperately trying to succeed,” Wilson said, but he convinced Ovitz that all his efforts were moot.
A clean break
Wilson told Eisner and Ovitz they should work out something “mutually beneficial” to prevent the separation from dragging on for months.
“If we wanted to hire a new president, it would have been very hard to do with Mr. Ovitz hanging around,” Wilson said. “It was in the best interest of the company, in my judgment, to pay out the contract.”
Wilson, who was Disney chief financial officer from 1985-89 and remains a director, deflected the suggestion that the board acted in haste in the hiring of the mercurial superagent. He argued that it was not a case of cowed directors listening only to dictates set down by Eisner.
“Eisner would suggest names and we would do our due diligence,” said Wilson, a member of the board’s nominating committee. Wilson added that he and Eisner talked for years about how to bring Ovitz into the Mouse House fold, and the main stumbling block was how to lure him away from his post at CAA.
Shareholders are suing Disney, contending that it was a waste of money to give Ovitz a no-fault termination and the huge golden parachute upon his departure. Disney board members contend that they pushed Ovitz out at just the right time in order to prevent further financial damage to the company.
Monday also saw the testimony of former Georgetown U. president Leo O’Donovan, a Disney director who took the stand in a sports coat with a clerical shirt and white collar underneath.
Lack of chemistry
O’Donovan said he noticed a lack of chemistry between Ovitz and Eisner as early as September 1996, when O’Donovan began serving on the board. The press release announcing Ovitz’s departure was issued two months later.
Echoing the earlier testimony of former board members Reveta Bowers and Richard Nunis, O’Donovan said he relied on the judgment of chief counsel Sandy Litvack that Ovitz could not be terminated “for cause” — a designation that would nullify his severance package.
“I would distinguish between being reasonably informed and doing separate research,” O’Donovan said. He went on to say he felt informed on the issue by attending and participating in board meetings.
Wilson’s testimony will continue today. The trial, which has dragged on for almost two months after an initial estimate that it would take three weeks, will continue with testimony until Dec. 15, at which point it will recess until January.