The media conglomerate's board told shareholders that disgruntled former directors Roy Disney and Stanley Gold "are engaging in a misleading and distorted campaign against your company."
Contrary to the former board members' criticisms of CEO Michael Eisner and other directors, "Disney's seasoned senior management team is focused on the right priorities to drive shareholder value in the years to come," writes the board in a letter to shareholders that was released Monday.
The letter, which implies strong board support for Eisner, is the latest volley in what has become a very public conflict between Roy Disney, the nephew of Disney co-founder Walt, and Eisner. Roy Disney and Gold, his business partner, resigned from the board late last year while complaining about Eisner's stewardship of the company.
The feud is but one of several tempests to rock the big Burbank, Calif., entertainment company recently. Just last month movie-animation studio
broke off talks with Disney over extending the two companies' collaboration. Pixar CEO Steve Jobs followed that bombshell up last week with some
sharp-tongued criticism of Eisner and his management team.
But Disney has remained focused on its progress in the stock market and in its various businesses. Given the good news that the company has reported over the past year, "shareholders have every reason to question the actions of Stanley Gold and Roy Disney, and to wonder how the best interests of all shareholders are served by trying to distract the Board and management at a time when all energy and resources should be devoted to forwarding the company's momentum," says the letter, which was signed by 13 current directors, including Eisner himself. "You should be concerned that Messrs. Gold and Disney are putting their own interests ahead of yours."
Meanwhile, the board is asserting that Roy Disney's complaints are unmerited, and that he previously approved strategies he's now upset about.
The argument will no doubt surface once again at the company's annual shareholder meeting, scheduled for March 3 in Philadelphia, though the chance of a resolution of the matter seems less certain.
Disney's shares rose 43 cents Monday, to trade at $23.78. Shares are up 60% from their 52-week low, but still well below their 2000 levels, when they traded above $40.
In addition to listing some of the company's achievements of the past year and reiterating a commitment to good corporate governance, the directors' letter cites several examples of what it characterizes as Roy Disney's and Gold's distortions.
Disney and Gold, according to the board's letter, suggest that director George Mitchell sits on too many outside boards and is engaged in the full-time practice of law. Rather, says the board, Mitchell's three other board memberships "fully comply" with company guidelines, and he isn't practicing law on a full-time basis.
Disney and Gold suggest director John Bryson isn't independent because of a transaction between Disney and
, of which Bryson is CEO, says Disney's board. But, says Disney's board, the ex-directors "failed to tell you that the transaction occurred more than two years before Mr. Bryson joined the Board, and that it was Mr. Gold who chaired the Committee that first nominated him as an independent director."
Further, writes the board, "they totally ignore the impressive long-term performance record of Michael Eisner, who as one of the company's largest individual shareholders is fundamentally focused on your interests."
"Don't be misled," concludes the letter. "The Walt Disney Company has momentum. To be sure, there are challenges ahead and we and senior management are focused on delivering further improvements in performance. Nonetheless, your company is strong and growing. As shareholders, you are benefiting."