The Five Dumbest Things on Wall Street This Week

1. Disney's Lesser Evil

Not that anyone asked us, but we at the Five Dumbest Things Research Lab were a little surprised that Disney's board decided to mimic the Miss America pageant's policies for choosing replacements: When one crowned head is publicly embattled -- for a scandal or just simple incompetence -- they just wheel in the first runner-up.

It makes sense on one level. After all, what's the difference? Otherwise, though, we're a little hard-pressed to explain why Disney's board chose former Sen. George Mitchell to succeed Michael Eisner as chairman.

That move, of course, came in response to the unprecedented no-confidence vote on Eisner. As Disney announced at the close of its 5 1/2-hour shareholder meeting Wednesday, 43% of voting shareholders opposed re-electing Eisner to Disney's board. So, addressing one of investors' concerns about Eisner -- that he wielded too much power as both chairman and CEO -- the board took away one of those posts and handed it to Mitchell, its lead independent director.

That sounds like a good idea, except for one teeny-tiny thing: Among the objects of shareholder ire Wednesday, Mitchell was the second most popular target. Symbolic of a board perceived to be independent by definition but not in spirit, Mitchell was graced with a 24% "withhold" vote.

Now, let's not let Eisner's spectacular flight into the annals of shareholder disaffection overshadow Mitchell's remarkable achievement.

Yes, 24% is nothing to sneeze at. Think back, for example, to last May, when shareholders of AOL Time Warner (since renamed Time Warner ( TWX)) unloaded their wrath on former AOL Chairman Steve Case, one of the chief architects of the money-sucking deal that created AOL Time Warner.


Unpopularity Contest
Mitchell tails Eisner by a hair

Shareholders, you'll remember, had already chased Case's collaborator, Jerry Levin, from the company. And Case had already stepped down from his chairman post at the new company.

So how many AOL Time Warner shareholders withheld their votes for Case? 22%.

Yes. Mitchell is even less popular than Case. And for that, he gets a promotion!

"We are aware that some voted for an immediate change in management and in the board," Disney's board said Wednesday. "However, taking all of these factors into account, we believe the action we have taken today is in the best long-term interest of the shareholders of the company."

"Best long-term interest" doesn't quite capture what's going on, we think. Instead, the episode reminds us of how we feel most every Election Day: Forced to choose among a bunch of losers, who irritates us least?


Marquee Martha
Live from New York and Hollywood

2. Emmy Is for Martha

To use one of those expressions we so rarely get to use literally, as of Thursday evening the jury was still out in the criminal trial of Martha Stewart Living Omnimedia ( MSO) founder Martha Stewart.

But cheer up, Martha! Though you're probably not enjoying the uncertainty of whether you will be found innocent or guilty, some good news trickled in Thursday. Martha Stewart Living, the six-times-a-week show produced by Martha Stewart Living Omnimedia and starring Martha Stewart, was nominated for six Daytime Emmy Awards.

Yes. When the winners are announced on May 21, Martha could very well be stepping up to the podium to accept the award in such categories as Best Service Show, Best Single Camera Photography (Film or Electronic) or the hotly contested Best Main Title Design.

Or it's possible that Martha won't be on hand to accept her trophy, owing to a previous engagement at some minimum security correctional facility. In which case, when the news filters in through the prison grapevine that one of the inmates assigned to laundry duty has walked away with Best Service Show Host, we're sure that the bed sheets will be ironed with more than their usual crispness that particular day.

3. ESPN's Delay of Game

But back to Disney's 5 1/2-hour shareholder meeting, which for a time we thought would last longer than a Norwalk virus-infested cruise.

Did we mention that Disney's shareholder meeting lasted 5 1/2 hours?

Ostensibly, much of the meeting was occupied by presentations of different executives about all the great things going on at Disney. But after the 200th or so PowerPoint slide -- and after we noticed that much of the material duplicated information in the company's glossy annual report -- we began to suspect that Disney was stalling.


Dozing on Disney
The mouse that snored

But we weren't the only people to get the idea that Disney was trying to bore people into leaving. Four and a half hours into the meeting -- when ESPN and ABC Sports chief George Bodenheimer took the stage -- the grumbling in the audience was more than audible. We almost felt sorry for Bodenheimer (note the italics on the word almost), but we got over it.

After 5 1/2 hours, Eisner finally took questions from shareholders. (Did we tell you that Disney's shareholder meeting lasted 5 1/2 hours?) At the end of the 20-minute Q&A -- but before election results had been announced -- he announced that the meeting was adjourned. Then he walked away from the podium as agitated shareholders yelled out the reminder, "Vote! Vote!"

Eisner returned to the podium and smiled. "I almost got away with that, eh?" he said.

We hate to be the ones to tell you this, Mike, but it doesn't look like you're going to get away with anything anymore.


Nails on a Blackboard
Evelyn speaks. And speaks. And speaks

4. The Devil in Evelyn

We also have a few words for legendary pain-in-the-neck shareholder Evelyn Y. Davis, who has made a career out of irritating everyone with the sound of her dental drill voice. Unfortunately for us here at the Research Lab, we were among those treated to Davis' impromptu root canal.

Evey, don't go away mad. Just go away.

Now, many years ago, Evelyn used to be funny and actually provided a good dig at many a mighty CEO. Evelyn once called Henry Ford "Hank" at one of the automaker's shareholder meetings. But the days of Evelyn being entertaining appear to us to be long past. (Sorry, Evey.)

The trouble with Evelyn this time around was that with so many Disney shareholders dying to speak at the meeting -- and with Disney granting so little time for questions and comments -- Davis quickly overstayed her welcome.

At least Davis was funnier than Eisner (though that wasn't all that hard). Addressed by a well-meaning PricewaterhouseCoopers auditor as "Ms. Davis," she shot back, "Mrs. Davis! I've had three husbands!"

5. Money to Bernie

Finally, with this week's indictment of former WorldCom CEO Bernie Ebbers on securities fraud charges, we can't help but wonder: Is that all there is?

Usually, prosecutors load up the indictment with all sorts of juicy allegations to stir outrage and supply vivid anecdotes of misdeeds that rile the common man. There's nothing like an exec who pays several thousand dollars for an umbrella stand to make a dedicated Kmart shopper's blood boil.

But the only smoking gun in the whole document for Bernie -- the only thing linking him to a 32-page securities fraud charge -- is an ambiguous voice-mail message left for Bernie by co-conspirator Scott Sullivan. It's not even clear if Ebbers even listened to the message.

So now the question is, is there any hard evidence linking Ebbers to WorldCom's multibillion-dollar accounting fraud. And if there isn't, why?

Innocence is one possible reason. But there's also Bernie's legendary aversion to technology such as cell phones, the Internet and pagers -- ironically, technology marketed by WorldCom to executives who want to stay in touch. Was he a big-picture guy, too busy to use the tools of the communications trade? Or did he just want to keep his distance to keep an air of plausible deniability when bad news occurred?

Well, one thing's for sure. We'll find out at his trial.

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