Roy Disney Resigns?

Discussion in 'Movies' started by Peter Kline, Nov 30, 2003.

  1. Peter Kline

    Peter Kline Cinematographer

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    New York Times
    November 30, 2003

    Roy Disney Resigns and Urges C.E.O. Eisner to Follow Suit
    By CARLA BARANAUCKAS

    The vice chairman of the Walt Disney Company, Roy E. Disney, resigned from the board of directors today, citing his ``serious differences of opinion'' with the chairman, Michael D. Eisner, ``about the direction and style of management in the company.''

    Mr. Disney, the nephew of Walt Disney, also called for Mr. Eisner's resignation. In addition, Mr. Disney stepped down from his position as chairman of the feature animation division.

    The resignation lays bare a sharp conflict in an entertainment and media company that has called its theme parks ``the happiest place on earth.''

    ``You well know that you and I have had serious differences of opinion about the direction and style of management in the company in recent years,'' Mr. Disney wrote to Mr. Eisner. ``For whatever reason, you have driven a wedge between me and those I work with even to the extent of requiring some of my associates to report my conversations and activities to you. I find this intolerable.''

    Mr. Disney noted that the nominating committee had excluded him from the slate up for election to the board of the publicly held company, ``effectively muzzling my voice on the board.''

    Just last year in a boardroom power play, Mr. Eisner prevailed over his chief critic and fellow board member, Stanley P. Gold, investment adviser to the family of Roy E. Disney, Walt Disney's nephew.

    After that episode, the board was reconfigured, in a move that was said to reduce the influence of Mr. Eisner's critics.

    Mr. Disney acknowledged that he fell into the category of critic.

    ``Michael, I believe your conduct has resulted from my clear and unambiguous statements to you and the board of directors that after 19 years at the helm you are no longer the best person to run the Walt Disney Company,'' Mr. Disney wrote, adding that in the last 10 years the company ``has lost its focus, its creative energy, and its heritage.''
     
  2. Dennis Nicholls

    Dennis Nicholls Lead Actor

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  3. Peter Kline

    Peter Kline Cinematographer

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    It means nothing. Roy Disney was not involved in the creative development of animated films.
     
  4. Chris

    Chris Lead Actor

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    No, but Roy was right on the need for Eisner to go.
     
  5. Quentin

    Quentin Cinematographer

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    Soooo....I'm guessing they're going to lose Pixar.
     
  6. Gui A

    Gui A Supporting Actor

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    Found on the UltimateDisney.com/Forum boards, this is Roy E Disney's letter of resignation. WallStreetJournal.com subscribers have access to the full PDF.






    November 30, 2003

    Mr. Michael D. Eisner, Chairman
    The Walt Disney Company
    500 South Buena Vista Street
    Burbank, CA 91521

    Dear Michael,

    It is with deep sadness and regret that i send you this letter of resignation from the Walt Disney Company, both as Chairman of the Feature Animation Division and as Vice Chairman of the Board of Directors.

    You well know that you and I have had serious differences of opinion about the direction and style of management in the company in recent years. For whatever reason, you have driven a wedge between me and those I work with even to the extent of requiring some of my associates to report my conversations and activities to you. I find this intolerable.

    Finally, you discussed with the Nominating Committee of the Board of Directors its decision to leave my name off the slate of directors to be elected in the coming year, effectively muzzling my voice on the Board – much as you did with Andrea Van de Kamp last year.

    Michael, I believe your conduct has resulted from my clear and unambiguous statements to you and the Board of Directors that after 19 years at the helm you are no longer the best person to run the Walt Disney Company. You had a very successful first 10-plus years at the company in partnership with Frank Wells, for which I salute you. But since Frank’s untimely death in 1994, the company has lost its focus, its creative energy, and its heritage.

    As I have said, and as Stanley Gold has documented in letters to you and other members of the Board, this Company under your leadership has failed during the last seven years in many ways:

    1. The failure to bring back ABC Prime Time from the ratings abyss it has been in for years and your inability to program successfully the ABC Family Channel. Both of these failures have had, and I believe will continue to have, significant adverse impact on shareholder value.

    2. Your consistent micro-management of everyone around you with the resulting loss of morale throughout this company.

    3. The timidity of your investments in our theme park business. At Disney’s California Adventure, Paris, and now Hong Kong, you have tried to build parks on the cheap and they show it and the attendance figures reflect it.

    4. The perception by our stakeholders –consumers, investors, employees, distributors and suppliers – that the Company is rapacious, soul-less, and always looking for the “quick buck” rather than long-term value which is leading to a loss of public trust.

    5. The creative brain drain of the last several years, which is real and continuing, and damages our Company with the loss of every talented employee.

    6. Your failure to establish and build constructive relationships with creative partners, especially Pixar, Miramax, and the cable companied distributing our products.

    7. Your consistent refusal to establish a clear succession plan.

    In conclusion, Michael, it is my sincere belief that it is you who should be leaving and not me. According ly, I once again call for your resignation or retirement. The Walt Disney Company deserves fresh, energetic leadership at this challenging time in its history just as it did in 1984 when I headed a restructuring which resulted in your recruitment to the Company.

    I have and will always have an enormous allegiance and respect for this Company, founded by my uncle, Walt, and father, Roy, and to our faithful employees and loyal stockholders. I don’t know if you and other directors can comprehend how painful it is for me and the extended Disney family to arrive at this decision.

    In accordance with Item 6 of Form 8-K and Item 7 of Schedule 14A, I request that you disclose this letter and that you file a copy of this letter as an exhibit to a Company Form 8-K.

    With sincere regrets,
    Roy E. Disney

    Cc: Board of Directors
     
  7. MatthewA

    MatthewA Lead Actor

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    1984 all over again. We knew this was going to happen.

    He resigned from the company before in March 1977 over similar reasons, some identical to the ones here. (Side note: I'd watch Herbie Goes to Mediate the Hostage Crisis over Lizzie McGuire any day.)

    If I recall correctly, under SEC rules he must resign his post before he wages war on the board.

    Let's look at a few parallels:

    1970s: departure of Sherman Brothers
    1990s/2000s: departure of Alan Menken

    1970s: declining ratings of anthology series; attempts to arrest this decline fall flat
    1990s: declining ratings of ABC network; attempts to arrest this decline fall flat

    1970s: Most movies doing poorly with critics and audiences
    1990s: Most movies doing poorly with critics and audiences, but some exceptions

    I know there are more but they elude me at the present.

    Well, Roy, I wish you the best of luck trying to save this company again. Mickey Mouse and his friends might not have been part of my 1980s childhood if it weren't for your intervention the last time.
     
  8. Adam Lenhardt

    Adam Lenhardt Executive Producer

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    It's about damn time someone with some passion for what Disney should be stood up and took a stand. I applaud Roy Disney.
     
  9. steve jaros

    steve jaros Second Unit

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    I have no idea whether Eisner or RD should be the one to go, but what's wrong with the Disney company? Their movies, video sales, etc. are doing extremely well.
     
  10. Edwin Pereyra

    Edwin Pereyra Producer

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    Disney was a very good company and an investment from the early to mid-1990's. But the late 1990's through early 2003 has not been very kind to its stockholders, with its loss of focus, eroding shareholder value, declining attendance at its theme parks and lack of fresh and creative content in its animated studios division.

    As a stockholder, I was very vocal in the poor quality of films Disney has released in recent years (i.e. Country Bears, Return To Neverland, Santa Clause 2, etc.). It was finally time to unload my equity interest after its recent runup early this year and look for other emerging companies (hint...hint... Marvel [​IMG] ).

    As I've said all along, when a CEO of a Company is more concerned about putting himself on TV every Sunday night in The Wonderful World of Disney introducing films - a process more suitable for the actual filmmakers with direct hands on contribution to a film's creative content, one has to wonder if that CEO's time could be better served in more productive ways, especially during the time its Company is not doing all that well.

    ~Edwin
     
  11. Chris

    Chris Lead Actor

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    Ok, I just want to go through this for Steve [​IMG]

     
  12. Bryan Tuck

    Bryan Tuck Screenwriter

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  13. Edwin Pereyra

    Edwin Pereyra Producer

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    Chris has gone through the issues really well. In addition…

     
  14. todd s

    todd s Lead Actor

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    On a side note about the parks. I was in Disneyland last month. And it the one day. 2 rides broke down and I noticed that the boats on It's A Small World were worn and needed rehab. I don't know if they are not maintaining things like they used to. Yes, I know the rides are old and they are constantly in use. But, I remember years ago. If something started to get worn. It was pulled and refitted.
     
  15. TheLongshot

    TheLongshot Producer

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  16. Mark Zimmer

    Mark Zimmer Producer

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    When I'd heard some months ago that Disney had dismantled its traditional animation department, it sounded to me as if it was primarily aimed at forcing Roy out. That's too bad. He was behind a lot of good releases on DVD (I think the Treasures series can be attributed to him, and the fact that they're almost all uncut) and I think without him we're not likely to get the same quality of DVD releases, especially of historical pieces. I think with his leaving we can say goodbye to our last hope of seeing Song of the South again too.[​IMG]
     
  17. TonyD

    TonyD Who do we think I am?
    Supporter

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    .
     
  18. Scott L

    Scott L Producer

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    When's the last time a movie like Lion King, Aladdin, or the Beauty & the Beast was made? When's the last time a ride like Space Mountain, Big Thunder RR, or Splash Mountain was made? All pre-mid 90's.

    I'm glad I'm not the only one who doesn't like the direction Disney's going in. Every year the company seems to lose more "soul." It seems they don't do anything for the people anymore, just their wallets.
     
  19. Chris

    Chris Lead Actor

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    A second board member quits, and writes a hot letter:

    PRN Story

    BURBANK, Calif., Dec. 1 /PRNewswire/ -- Stanley P. Gold today sent the
    following letter to the Board of Directors of the Walt Disney Company:

    December 1, 2003

    To the Board of Directors of the Walt Disney Company:

    It is with regret that I resign effective immediately from the Board of
    Directors of the Walt Disney Company and second Roy Disney's call for the
    removal of Michael Eisner as Chairman and C.E.O. I am proud of my more than
    15 years of service and my role in reshaping the Company in 1984 by bringing
    Frank Wells and Michael Eisner to the Company. I do, however, lament that my
    efforts over the past three years to implement needed changes has only
    succeeded in creating an insular Board of Directors serving as a bulwark to
    shield management from criticism and accountability. At this time, I believe
    there is little that I can achieve by working from within to refocus the
    Company. I hope that my resignation will serve as a catalyst for change at
    Disney.
    The most recent evidence of the drive for insularity is reflected in the
    Governance Committee's determination that Roy Disney should no longer serve on
    the Board, ostensibly because Roy had surpassed the expected retirement age
    established by the Board's Corporate Governance Guidelines. In fact, these
    very rules regarding age, by their terms, only apply to non-management
    directors, not to Roy, who, as the Committee knows, has been deemed a
    management director. The Committee's decision and George Mitchell's defense
    of it yesterday are clearly disingenuous. The real reason for the Committee's
    action is that Roy has become more pointed and vocal in his criticism of
    Michael Eisner and this Board. This is yet another attempt by this Board to
    squelch dissent by hiding behind the veil of "good governance." What a
    curious result.
    Roy has devoted a lifetime to Disney as both an employee and Director. He
    has served with renewed vigor during these times of malaise, disappointment
    and instability at the Company, trying to maintain the morale of employees,
    focusing on the magic that makes Disney special and attacking bonuses to the
    CEO and increased compensation for Board members while the Company falters and
    shareholder value erodes. He and his family have a very large financial stake
    in the Company. Unlike Messrs. Watson and Murphy who have asked to be
    replaced, Roy has sought even more involvement only to be told that his input
    in animation will continue to be minimized and that his role as a Director is
    no longer welcome. This Board has become an enabler to entrenched management
    and, in so doing, is not effectively discharging its duties to the
    shareholders. This conduct has resulted in yet another valuable human asset
    of the Company slipping away. Within the last year this Board will have
    managed to cull from its ranks Andrea Van de Kamp and now Roy, two of the
    staunchest critics of Michael Eisner and the Company's poor performance. I
    cannot sit idly by as this Board continues to ignore and disenfranchise those
    who raise questions about the performance of management.
    As this Board knows, during my tenure I have tried to be an active,
    engaged Director. I believe a board should not merely rubber stamp decisions
    of senior management. I decided in August of 2002 that it was not enough just
    to express my views in the limited time set aside for our infrequent Board
    meetings. I therefore began a series of written communications to the Board
    regarding the Company, its management and the Board. I wrote to express my
    disagreement and growing concern with management, its policies and the
    effectiveness of the Board. I focused on the failed initiatives of the
    Company over the past five or six years and admonished the Board for not
    actively engaging in serious discussions regarding the Company's flawed plans
    and management's unmet projections and unfulfilled promises. In particular, I
    have urged the Board to concentrate on the Company's "poor performance, lack
    of credibility and accountability and poor capital allocation." In an effort
    to get Directors to seriously assess management's 5-year strategic plan (a
    plan that is only discussed with this Board, but not submitted for Board
    approval), I wrote to the Board to detail the Company's unsatisfactory
    financial performance for the past several years and to suggest a process, a
    so-called Diagnostic Review, designed to give the non-management directors the
    tools necessary to evaluate performance and establish a comprehensive
    framework and baseline from which the Board could be active partners in
    developing plans to maximize the value of Disney's existing assets and
    businesses. That approach was opposed by management and then, not
    surprisingly, rejected by the Board. The Board and its Chairman even
    criticized me for putting on paper these serious questions about fundamental
    matters.
    I believe the Board's adoption of its Corporate Governance Guidelines was
    yet another example of this Board's commitment to image over substance. Among
    other things, those Guidelines were carefully crafted to stifle dissent while
    allowing those supportive of senior management to continue business as usual.
    This was apparent when the Board applied its Guidelines to conclude that I was
    not "independent" despite the fact that I frequently challenged management at
    Board meetings and criticized both the Board's and the Company's performance.
    That decision was initially based on my daughter's employment in a non-
    executive position at Disney and, then, after that reason became insufficient
    under the new NYSE Governance Guidelines, because of my association with Roy.
    This resulted in my further isolation as I was no longer permitted to serve on
    the Governance and Nominating Committee or the Compensation Committee. On the
    other hand, John Bryson was deemed "independent" and appointed Chairman of the
    Nominating and Governance Committee despite the fact that his wife is an
    executive officer at Lifetime Entertainment Television, a 50% owned subsidiary
    of Disney, where she earned in excess of $1 million in total compensation in
    fiscal 2001. In addition, Senator Mitchell was appointed Presiding Director,
    despite having been recently employed as a Company consultant and
    notwithstanding that the law firm of which he was chairman received in excess
    of $1 million for legal services on behalf of the Company in fiscal 2001.
    At the time the Company's new Corporate Governance Guidelines were being
    considered, I also urged the Board to separate the positions of Chairman of
    the Board and CEO. This separation would empower the Board and help establish
    its independence and oversight role. Not only did the Board reject that
    initiative, the Board failed to give the newly established Presiding Director
    any real substantive powers.
    Continuing through March of this year I wrote to express my concerns
    regarding the financial performance of the Company and the repeated failures
    of management to achieve its forecasts. I urged this Board to feel a sense of
    urgency in dealing with the issues of leadership, performance, operations and
    accountability. Those efforts failed. Instead, Mr. Eisner was awarded a
    bonus of $5 million in Disney shares by the Compensation Committee despite
    objections by Roy and me. I believe that bonuses for senior management must
    be tied to performance; by that measure, no bonus was warranted.
    In a similar vein, I recently wrote to express my objection to the
    Compensation and Governance Committee's joint recommendation that fees paid to
    Disney Directors be increased dramatically, that stock grants to Directors be
    substituted for options (and thereby render meaningless the requirement that
    Directors own $100,000 in Disney shares) and that greater compensation be paid
    to the Presiding Director. Raises for the Disney Directors at this time are
    inappropriate based on my assessment of the Company's performance. I objected
    to the increase for the Presiding Director on the grounds that it did not
    reflect a reasonable payment for the only slightly increased duties. Finally,
    I could not make sense of a share ownership requirement for Directors that
    would be satisfied by a direct issuance from the Company at the same time
    Directors' cash compensation was being increased.
    It is clear to me that this Board is unwilling to tackle the difficult
    issues I believe this Company continues to face -- management failures and
    accountability for those failures, operational deficiencies, imprudent capital
    allocations, the cannibalization of certain Company icons for short-term gain,
    the enormous loss of creative talent over the last years, the absence of
    succession planning and the lack of strategic focus. Instead, the Board seems
    determined to devote its time and energies to adopting policies that focus not
    on substance, but on process and, in reality, only serve to muzzle and isolate
    those Directors who recognize that their role is to be active participants in
    shaping the Company and planning for executive succession. Further, this
    Board isolates those Directors who believe that Michael Eisner (when measured
    by the dismal results over the last 7 years) is not up to the challenge.
    Perhaps acting independently, from outside the Boardroom, not hamstrung by a
    recently enacted Board policy barring Board members from communicating with
    shareholders and the media, I can have greater success in shaping the
    policies, practices and operations of Disney than I had as a member of the
    Board.
    In accordance with Item 6 of Form 8-K and Item 7 of Schedule 14A, I request that you disclose this letter and that you file a copy of this letter as an exhibit to a Company Form 8-K.

    Very truly yours,
    Stanley P. Gold
     
  20. Edwin Pereyra

    Edwin Pereyra Producer

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    It will be very interesting how this all turns out in the end. Stanley Gold's departure now leaves a very big void as far as directors who have always put shareholder value and interest first and foremost.

    Eisner is still Disney's #1 individual stockholder.

    Disney has not been the same since Frank Wells' untimely death in 1994.

    ~Edwin
     

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