NEW YORK — Former Walt Disney chief financial officer Stephen Bollenbach knew for sure that Michael Ovitz wasn’t suited for the job of Mouse House prexy after Ovitz made some 40 execs gather in a circle during a Florida retreat and go around naming their favorite historical figure.
“Jesus got a lot of votes. Michael Eisner actually got a couple too,” Bollenbach testified Monday as the sixth week began in the Disney shareholder trial.
“I just thought, you know, this is not the way that companies work. … By that meeting, I really had formed the opinion that this was going to be very difficult for him to execute,” Bollenbach said in recalling the January 1996 retreat.
Bollenbach, who’s now chief exec and co-chair of Hilton Hotels, turned in his notice to Eisner and ankled the Mouse House the next month, even though he had been at Disney only 10 months. He testified that his abrupt departure had nothing to do with Ovitz (contrary to statements in Eisner’s memoir), although it’s easy to see why the two execs would clash — Bollenbach being the tough and traditional corporate suit and Ovitz the Hollywood uber-agent.
Bollenbach worked in tandem with Disney general counsel Sandy Litvak, who was equally perplexed and frustrated by Ovitz.
Like Eisner did last week, Bollenbach nevertheless backtracked from some previous statements critical of Ovitz so as to avoid giving credence to the shareholder lawsuit at hand. Suit claims that the Disney board failed to properly vet Ovitz and broke its public trust by awarding Ovitz a $140,000 severance package.
Among other things, Bollenbach denied he had been concerned when CAA — the agency Ovitz co-founded — asked Disney to reimburse it for computers Ovitz had taken.
Replacement cost: $34,000, per testimony.
He also said it was a “dumb idea” to talk to Kim Masters for a Vanity Fair article on the troubles at Disney shortly after he ankled. In the article, he said he’d told Ovitz that an exec just can’t “suck up resources doing things that are meaningless.” He said he was probably angry with Eisner and wanted to get back at him in some way.
“I felt I had really done a disservice to Ovitz so I called him to apologize. He was not happy, but he was not as mad as I would have been,” Bollenbach testified.
He said while his Vanity Fair quotes may have been accurate, they might not “necessarily be true.”
Bollenbach, who also sits on the board of Time Warner, had his eye on taking over the Disney prexy post one day, but decided to return to the hotel biz, leaving Hollywood behind for good after leaving Disney.
Bollenbach couldn’t and didn’t try to deny that he soon began having serious doubts about Ovitz’s ability to serve in the No. 2 post. Ovitz unofficially came on board in August 1995.
“I thought his job with the company was to relieve Mr. Eisner of certain duties so Eisner could focus on other things, but because Ovitz had a style that was foreign to the company, he wasn’t helping to relieve the situation,” Bollenbach testified.
Bollenbach disclosed that he was irked at Ovitz for “hijacking” Eisner in public by whispering in his ear.
“I told him he had to stop that. I know it sounds petty, but the practice was distracting to other Disney executives,” he testified.
Also, Bollenbach revealed in testimony that Ovitz canceled a series of meetings Bollenbach had arranged for Ovitz in fall 1995 to meet the various division heads and go over corporate books.
The company retreat at Walt Disney World in Orlando, Fla., was a breaking point for Bollenbach, who by that time had begun sharing his “serious concerns” with Eisner, including the fact that Ovitz had scrubbed every one of the division meetings.
“Eisner would say, ‘Go talk to him,’ ” Bollenbach recalled. “I would say, ‘Come on, that’s your job. You go do it.’ ”
Bollenbach claimed in his testimony that he believed Disney would simply find another post for Ovitz and that not even he believed Ovitz should be fired for cause.
Throughout the day, Bollenbach repeatedly denied that he had raised specific objections to Ovitz’s hiring at a much-publicized Aug. 13, 1995, meeting at Eisner’s home. Rather, he and Litvak told Eisner it was a mistake to disrupt the working relationship the three execs had developed. They also raised stiff objections to the idea of reporting to Ovitz rather than Eisner.
When Ovitz arrived, Bollenbach promptly told the newcomer Bollenbach wouldn’t report to him — in what Eisner later himself called a distinctly chilly tone.
Bollenbach testified that Eisner and Ovitz retreated to another room in the house. When they returned, Eisner said the request was fine and that all three execs would report to him. Bollenbach said Litvak, who also eventually left Disney, was more concerned than he about Ovitz.
“When I left the meeting, I was pretty much convinced that Michael Ovitz was going to accept the job,” Bollenbach said. “I was satisfied. Mr. Ovitz seemed to be an excellent choice … He was characterized most often as the most powerful man in Hollywood. The ability to attract him and hire him was universally considered a very, very good thing.”
Bollenbach noted that Disney’s stock surged upon news of the Ovitz hire, increasing the company’s worth by more than $4 billion, at least on that day. He said he didn’t raise any concerns or objections when the Disney board affirmed Ovitz’s hire.
Along the same lines as CAA’s request for reimbursement, Bollenbach also denied that he had been concerned about Ovitz’s expenses. He said he couldn’t remember seeing a Jan. 26, 1996, accounting memo on the subject.
Bollenbach said he didn’t remember Litvak ever calling Ovitz a liar. Asked if he thought Ovitz was truthful with him, Bollenbach responded: “I think I expected the truth from him the way I did from most people. The truth as he saw it might not be the biblical truth.”
Attorney Seth Rigrodsky, representing shareholders, also grilled Bollenbach about whether he had told Eisner that Ovitz was the reason for his exit. Specifically, he was asked if he had read Eisner’s biography “Work in Progress,” in which Eisner said that Ovitz was indeed a “decisive factor.”
“I don’t think it characterizes what I felt or what I said,” Bollenbach said.
Tempers in the Delaware courtroom flared as the usual 5 p.m. ET adjournment came with Bollenbach still under cross-examination. Bollenbach’s attorney asked Chancellor William Chandler to put an end to it out of concern for Bollenbach’s travel plans and the “banal” and immaterial nature of the cross.
Plaintiff’s attorney explained that he had underestimated the time he needed for the examination, argued that he didn’t think “travel plans should get in the way of cross-examination” and that this situation reminded him of the “banality of evil.”
When the proceedings broke at 5:30 p.m. ET, Bollenbach’s lawyer expressed offense that counsel had used Hannah Arendt’s “banality of evil” out of context, considering it was originally used to describe WWII criminals.
Disney chair George Mitchell is expected to testify next.
(Willa Paskin in New York contributed to this report.)