Move fulfills promise to add independent board member
In the face of pressure over its corporate governance practices in court and from investors, Disney has named former Estee Lauder CEO Fred H. Langhammer to its board and plans to add another independent director next year.
Appointment fulfills a promise studio made earlier to add at least one independent member to its board by the end of the year. Dissident shareholder leaders Roy Disney and Stanley Gold, as well as pension funds led by CalPERS, had pressed the Mouse House to add two new independent directors.
Questions have also arisen during the ongoing Michael Ovitz trial concerning the Disney board’s oversight of the company in the mid-’90s.
Coincidentally, CalPERS president Sean Harrigan, who was instrumental in pushing the giant pension fund into corporate activism, including the campaign to withhold votes from Michael Eisner’s re-election to the Disney board earlier this year, was himself voted off the job Wednesday. The California Personnel Board voted to remove Harrigan from the CalPERS board when his term expires in January. Harrigan had incurred the wrath of state Republicans and business orgs.
In naming Langhammer, the Mouse House added that the governance and nominating committee of its board has begun to work on identifying another independent director and hopes to elect him or her within the next year.
Langhammer is currently director of Global Affairs for Estee Lauder. Exec was identified after a lengthy search by recruiting firm Russell Reynolds Associates that began last spring.
After joining the cosmetics giant in 1975, Langhammer helped take it public and served as CEO from 2000-04.
When he officially joins the board in January, Langhammer will become the 12th member of Disney’s board and its ninth independent director.
Mouse House also said Wednesday that it would increase its annual cash dividend by 14% over last year to 24¢ per share, payable Jan. 6 for shareholders of record as of Dec. 10.
News comes as Disney earnings have increased this year despite the legal turmoil and questions surrounding Michael Eisner’s successor as CEO. Company’s one weak spot in its third quarter earnings, the film division, is performing significantly better thanks to smash hit “The Incredibles” and a solid, better-than-expected performance from “National Treasure.”
Disney shares closed up 3% at $27.68 Wednesday before news was announced.