Disney Reaches Out to Big Holders

Disney's (DIS Quote - Cramer on DIS - Stock Picks) board, a lightning rod for criticism over the past year, appears to be on an outreach campaign.

In what some outsiders are calling an unusual move, the company's board of directors is inviting major investors to a cocktail party scheduled for Wednesday evening in New York City.

The reception, hosted by what the company says are "representatives from Disney's board of directors," comes as a Delaware shareholder trial explores the degree to which Disney's board was in the loop during the company's expensive and unproductive mid-1990s employment of former agent Michael Ovitz.

The get-together also comes a few months after two disgruntled former Disney directors, Roy Disney and Stanley Gold, spearheaded a campaign to oust then-chairman and CEO Michael Eisner, along with other directors. That particular campaign -- which resulted in Eisner's replacement as chairman by George Mitchell, one of the other targeted directors -- appeared to crystallize a longstanding sense among Disney shareholders that the company's board had been too complaisant in its oversight of company management and an inadequate champion of shareholders' interests.

A Disney shareholder who received an invitation to the reception said an invitation to meet with a company's board is a rare occurrence occasionally tied to annual meetings of shareholders. To have the reception now -- nine months after the company's annual meeting -- is virtually unprecedented, said the shareholder.

Such a board-centered event was uncommon, agreed other seasoned investors.

"It is unusual, but it does happen," says Frank Husic, managing partner of Husic Capital Management, which isn't a Disney shareholder. For example, Casual Male (CMRG Quote - Cramer on CMRG - Stock Picks), a company of which Husic is a director, regularly holds a breakfast with major shareholders before its annual meeting, says Husic.

But Husic says he doesn't recall attending any shareholder-board member get-togethers -- organized by either Casual Male or another company -- not tied to an annual meeting. "If you want to talk to the board, you're probably a dissident shareholder," he says.

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