×
You will be redirected back to your article in seconds

Shareholders mine Gold

Former exec takes aim at board members

NEW YORK — Most outside Disney board members were too “unsophisticated” to effectively govern the company, former board member Stanley Gold admitted Friday after a sustained grilling by an attorney for Disney shareholders.

The naivete of Disney board members — specifically Sydney Poitier, Revata Bowers, Ray Watson, George Mitchell and Robert Stern — didn’t matter in the mid-’90s when the company racked up record profits, Gold testified.

But when Disney’s performance started to wane after the acquisition of ABC/Capital Cities, topper Michael Eisner closed ranks and shunned the hapless board, rendering them a rubber-stamp body.

Gold is in the difficult position of defending the actions of Eisner and the Disney board when it approved Michael Ovitz’s $140 million golden parachute in 1996, even as he criticizes their performance in later years as a leader of a campaign to oust Disney management.

In cross-examination by shareholder attorney Joshua H. Vinik, Gold walked a fine line, painting Eisner as the picture of a collaborative exec in 1996, while admitting his views had changed by 2003 when he wrote in the Wall Street Journal that Eisner “has never concealed his contempt for the directors to which he nominally reports.”

What followed was a near-Clintonian debate over the meaning of “never” and what Gold meant when he wrote in 2003 the board had done a dismal job of oversight for “nearly a decade.” “Nearly” and “never” meant about seven years in this case.

“They are references to the past but not to the 1995-to-1996 period,” Gold said.

Quick decline

Gold said he knew the relationship between Eisner and Ovitz was deteriorating fast just a few months after Ovitz became an employee. Gold said he told fellow board member Ray Watson that hiring Ovitz had been a “horrendous mistake.”

In order to defend his position that the no-fault termination was necessary, he portrayed the Ovitz-Eisner feud as a conflict of styles.

Eisner wanted to develop talent internally and liked to micromanage creative projects, including making the final calls on TV pilots.

Ovitz wanted to sign big-name, expensive outside talent and was willing to delegate details to subordinates.

Ovitz was secretive while Eisner was direct.

Gold urged Eisner to redouble his efforts to get along with Ovitz because it would cost the company a “boatload of money and a whole lot of bad publicity” to fire him.

But at a board meeting in the fall of 1996 they discussed the need to terminate Ovitz, and then voted to hand him a $7.5 million bonus package and nominated him for another three-year board term.

Chief legal officer Sandy Litvack had advised the board that according to Ovitz’s contact, it would be impossible to fire the former superagent for cause or to deny him the $7.5 million bonus.

Litvack later reversed his position on the bonus, infuriating Gold.

“I was upset,” Gold said. “I felt I had been treated like a fool. I said let’s reconvene the committee and rescind it.”

Gold said he suspected Litvack might have been wrong about the no-fault termination as well.

“I said if you made a mistake on this one, did you make a mistake on the no-fault termination?” Gold asked Litvack. “He assured me no, there was no way to terminate Ovitz without a no-fault termination.”

The trial resumes today with the first day of testimony from former Disney board member Roy Disney.

More Scene

  • Marianne Rendon, Matt Smith, Ondi Timoner

    Robert Mapplethorpe Biopic Team Talks 'Fast and Furious' Filming

    Thursday night’s New York premiere of the Matt Smith-led biopic “Mapplethorpe” took place at Cinépolis Chelsea, just steps from the Chelsea Hotel where the late photographer Robert Mapplethorpe once lived — but director Ondi Timoner had no sense of that legacy when she first encountered him in a very different context. “When I was ten [...]

  • Producer Mel Jones poses at the

    'Dear White People' Producer Talks Hollywood's 'Black Tax'

    “Dear White People” and “Leimert Park” executive producer Mel Jones is extremely familiar with growing up and watching “white men in all types of roles and never [seeing] ourselves as a part of those narratives.” Now, there may be some more opportunities for writers of color to tell their own stories, but, she notes, there [...]

  • Rebel Wilson Isn't It Romantic

    Rebel Wilson on Twitter Gaffe: 'It Was Purely to Lift My Fellow Plus-Size Women Up'

    “I obviously misspoke in that situation,” Rebel Wilson told Variety at the premiere of her latest film “Isn’t It Romantic” Monday, acknowledging the gaffe in which she claimed to be the first-ever plus-sized woman to star in a romantic comedy during an October appearance on “Ellen.” Following the comment, Wilson was met with criticism from Twitter [...]

  • NORTH HOLLYWOOD, CALIFORNIA - FEBRUARY 11:

    How Lena Waithe Convinced Halle Berry to Team Up for 'Boomerang' TV Series

    Halle Berry wasn’t immediately sold on the idea of a “Boomerang” reboot. The 1992 romantic comedy, which starred Berry, Eddie Murphy, and Robin Givens, told the tale of cocky ad executive and insatiable ladies’ man Marcus (Murphy) who meets his match in his new boss Jacqueline (Givens) — an exec who treats him the same [...]

  • Rebel Wilson and Miley Cyrus'Isn't it

    Why Liam Hemsworth Wasn't at His 'Isn't It Romantic' Premiere, but Wife Miley Cyrus Was

    Liam Hemsworth had every intention of bringing his wife, Miley Cyrus, to Monday’s premiere of his new romantic comedy “Isn’t It Romantic.” However, the Aussie actor was forced to skip the evening because of some “health things.” That didn’t stop Cyrus from attended the red carpet shindig at the Theater at the Ace Hotel in downtown [...]

More From Our Brands

Access exclusive content