1. Governance at Walt Disney Co. - Was Eisner paid too much? - Was the Disney board acting in the best interests of the shareholders?

2. During Eisner’s tenure (about 20 years) Disney has achieved: average ROE of about 20 percent a year stock appreciation of over 2,000 percent market cap rose from $2 billion to $53 billion his last few years were not as great

3. But, some say… Eisner fared better than shareholders, as his total compensation, including salary, bonuses, and the value of options adds up to $278 million since 1996

4. Shareholder discontent The pension funds (e.g. CALPERS, NY public pension fund) grew quite uncomfortable with the Disney board makeup (lack of independence) 12 of 16 board members connected to Eisner His personal lawyer, Sidney Poitier (good friend), principal of his childrens’ elementary school, a Disney architect, 3 former Disney executives Eisner was board chairman (dual CEO)

5. Disney spokesman, John Dreyer’s response: “I’m sure the pensions have what they would consider more independent boards in their holdings that are not performing well. If they really don’t think the company is a good investment, they really should sell their stock.”

6. Real sour now! The big pension funds really soured on Eisner after the $140 million dollar payment to Michael Ovitz for 13 months of work (’95-’96): the former Disney president was fired without cause, so Disney was forced to pay him the severance package that was in his employment contract the pension funds sued but lost their $262 million suit against Disney’s board, Eisner, and Ovitz the court ruled payout as a “bad business decision” and not a breach of fiduciary duty

7. What do you think? Was Eisner paid too much? Was the Disney board acting in the best interests of the shareholders?