Thesp defends Disney decisions
Actor Sidney Poitier defended Disney CEO Michael Eisner’s hiring and firing of Michael Ovitz Tuesday, testifying the board thought Eisner and Ovitz would be a great combination for the company. Once it was obvious that it wasn’t working out, Poitier said, Eisner had no choice but to terminate him.
“My opinion was that once it was established that there was this kind of mismatch, it was evident that it was just not possible for him to stay,” Poitier testified in the shareholders’ suit in Delaware Chancery court over the $140 million severance package to Ovitz. Poitier, a member of the Disney board, also was a member of the compensation committee at the time Ovitz was hired and fired.
Like the other board members, Poitier painted a picture of a Disney that was run by Eisner, who kept the other board members in the loop about what he was doing even if he didn’t do it with formal board meetings. The plaintiffs charge the board was a rubber stamp for Eisner’s actions and say personal conversations were no substitute for meetings.
Can’t recall details
On cross-examination by Joshua Vinik, Poitier conceded the press release announcing Ovitz’s hiring came out a day after board member Irwin Russell reached him on a boat to tell him about hiring Ovitz. He also had no recollection of being told about the value of his stock options or the details of the termination clause in Ovitz’s deal.
Poitier acknowledged the compensation committee didn’t meet with Ovitz until a month after his hiring was announced and he couldn’t recall any specifics of the meeting. Poitier had no recollection of such heavily negotiated points as whether Ovitz would get the chief operating officer title. (He did not.).
Of Ovitz’s departure, Poitier could not recall how he knew that Ovitz would be fired except that Eisner kept the board informed. He conceded the board had no role in the decision to terminate Ovitz, and he did not know the details of his termination package, except that it would be substantial.
Poitier testified that the board had no opposition to Ovitz being hired and that as an actor he welcomed it because Disney needed a better reputation in the talent community. Eisner informed him Ovitz was having trouble adjusting and getting along with other executives before the situation became public.
Poitier also testified he knew Ovitz would be paid out on his contract. At a board meeting, Disney general counsel Sandy Litvack told the board Ovitz couldn’t be fired for cause, a conclusion Poitier accepted. “I had deep respect for (Litvack). He was a good person,” said Poitier.
Vast film experience
Something of a national icon, Poitier, testified on direct examination about growing up in the Bahamas as the son of a semiliterate tomato farmer and becoming an actor, director and producer despite having little formal education. He felt his background made him well qualified to serve as a Disney board member, although others on the board had more education and more business experience.
In discussing the full payout on Ovitz’s contract, Poitier equated it to an actor’s pay-or-play deal. He also said he decided to become a Disney board member because he felt his vast and diverse experience in the film industry gave him a very good understanding of the business.
Last month, former board member Stanley Gold testified he had recently developed concerns about the financial aptitude of several board members, including Poitier and George Mitchell. Gold, who has been a vocal opponent of Eisner since he and Roy Disney left the board, said he did not have those concerns in 1995-96.
Wilson grants authority
Earlier Tuesday, on his second and final day on the stand, Gary Wilson, a Disney board member and chief financial officer at the time Ovitz was hired and fired, testified he believed Eisner had the authority to fire Ovitz without calling a board meeting. “A CEO should be able to fire the president,” said Wilson.
Wilson, the chairman of Northwest Airlines, said he trusted Litvack would have advised the board if a meeting were necessary.
Wilson also testified about a trip he took with Ovitz on Thanksgiving 1996 on a yacht the two owned together. Because Wilson was one of the few board members who had a good relationship with Ovitz, Eisner suggested he be the one to persuade Ovitz that it was time for him to leave.
On the stand, Wilson acknowledged he may have described Ovitz as a “caged animal” in his telephone conversation with Eisner. Wilson said he didn’t believe Ovitz would have left voluntarily and he thought it was his mission to see that Ovitz was terminated without it hurting him too badly.
The Disney shareholder suit, which started in October in Delaware Chancery Court, seeks the return of $140 million paid to Ovitz in a no-fault termination package following his 14 months as Disney president.