Disney Lashes Out at Detractors

Dissident former directors Stanley Gold and Roy Disney didn't go to as many meetings as George Mitchell.
By George Mannes ,

Disney

(DIS) - Get Report

unleashed a new weapon in its fight against disgruntled former directors: George Mitchell's perfect attendance record.

The company on Tuesday released a pair of letters Tuesday in which Disney board member Mitchell defended the company's corporate governance practices and denied an accusation that he was too busy to serve on Disney's board.

That accusation had been made by ex-directors Roy Disney -- the nephew of founder Walt -- and Stanley Gold, who have stepped up their public criticism of Disney CEO Michael Eisner.

Addressing Disney and Gold's recent assertion that Mitchell "serves on far too many other boards to permit him adequate time for his Disney commitments," the ex-senator wrote, "during my nine years on the board I have never missed a meeting; more importantly, I prepared for and participated actively in the meetings." Continued Mitchell, "By contrast, while I attended every meeting over this nine-year period, neither Mr. Disney nor Mr. Gold did so."

Additionally, Mitchell said he didn't practice law full-time, contradicting Disney and Gold's allegation he did. Mitchell, who as Disney's "presiding director" serves as a lead independent director, also said his service on three boards other than Disney's fell within the company's corporate governance guidelines.

Roy Disney and Gold, who resigned from Disney late last year, are encouraging shareholders to withhold votes for the company's slate of directors at Disney's annual meeting scheduled for March 3.

So far, however, the company has failed to gain support from the remaining directors, who yesterday issued a public letter of support for current management.

Mitchell's letters, addressed to executives at the Council of Institutional Investors trade group and Institutional Shareholder Services, a proxy advisory service, are framed as follow-ups to meeting Mitchell and Eisner had with both organizations. The company is having a two-day meeting with investors in Florida starting Wednesday.

Responding to concerns about succession planning at Disney, Mitchell wrote that Disney's board devoted a "significant amount of time" to discussing the subject at the company's January board meeting. After listening to Eisner's views on the subject, Mitchell wrote, the board "then went into executive session to continue that discussion at length outside of Michael's presence."

The board plans to revisit succession planning in April, Mitchell said, not only as it relates to Eisner but also with respect to "most senior executives" at Disney other than Eisner. Mitchell indicated that the board was paying more attention to the subject than it had in the past: "While the board has in prior years considered succession," he wrote, "the process is now more formal and frequent, and extremely detailed, with active participation by all board members."

Disney's shares rose 24 cents Tuesday to trade at $24.01.

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