Disney Dissidents Keep Sniping

People are still Grumpy about corporate governance at Disney (DIS).

Disgruntled former Disney directors Roy Disney and Stanley Gold issued a letter Thursday accusing the Magic Kingdom of stonewalling, while Disney director Judith Estrin defended the company's governance at a meeting of the Council of Institutional Investors.

The ex-directors want Disney to disclose how participants in the company's 401(k) plan voted their shares at the company's annual meeting in early March, as part of their continuing campaign to oust CEO Michael Eisner.

After an unprecedented 43% of shareholders withheld their votes for Eisner's re-election to the board, Disney's board of directors relieved Eisner of his position as chairman, replacing him with lead independent director George Mitchell.

In the hopes of confirming their belief that Disney's employees have even less confidence in Eisner than shareholders at large, Roy Disney -- nephew of founder Walt -- and Gold want to learn what percentage of 401(k) participants withheld votes for Eisner.

"We believe that the confidential individual voting mechanism provided by the 401(k) plans is one of the best avenues for employees to express their views on company management free of possible recriminations by that management, and the resulting 401(k) vote is a bellwether for employee morale and attitude," a lawyer for Disney and Gold wrote in the letter they released. "Although the company's management may feel the vote of employees and former employees is not of concern, we prefer to leave that judgment to the shareholders."

Meanwhile, Estrin endured some pointed questions about the board's actions before and after the annual meeting, which was held in Philadelphia.

After acknowledging in a presentation the shortcomings of the company's performance over the past seven years, Estrin refused to be pinned down to saying how much time was necessary to judge Eisner's performance. Rather, she suggested, management should be judged on its direction. "The board currently believes we are going in the right direction," she said.

Estrin also defended the board's original decision, changed after the shareholder vote, not to separate the chairman and CEO posts, but to appoint Mitchell as "presiding director" to address concerns that authority was too concentrated in Eisner. Referring to the presiding director post, she said, "That job at Disney had meat." And by naming a presiding director, she said, "we were doing a lot to achieve the spreading of the balance of power, essentially, in the boardroom."

On Thursday, Disney rose 28 cents, to $25.05.

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