Pension Funds of 5 States Seek to Meet Disney Directors

back

Pension Funds of 5 States Seek to Meet Disney Directors

By Laura M. Holson, The New York Times

March 23, 2004

Representatives of pension funds from five states have banded together and called for a meeting with directors of Walt Disney to voice their concern about the company's future.

In a letter Monday to George J. Mitchell, who became Disney's chairman after Michael D. Eisner, the chief executive, was stripped of the title this month, representatives of funds from California, Connecticut, New York, North Carolina and Ohio said they wanted to discuss the company's governance and its long-term performance.

All the pension funds, which manage more than $500 billion in assets, declined to support Mr. Eisner in Disney's annual board election on March 3, when 43 percent of all shares were withheld from the vote on Mr. Eisner, who has led Disney for 20 years. Then, many shareholders, including Roy Disney, nephew of the company's co-founder, called on Mr. Eisner to resign.

"As long-term investors, we remain concerned about Disney's future and we need to see, up close and personal, how the board plans to address the serious and substantial issues at their doorstep," Connecticut's treasurer, Denise L. Nappier, said in a statement. She represents the Connecticut Retirement Plans and Trust Funds.

Other organizations that asked for the meeting include the California Public Employees' Retirement System, the California State Teachers' Retirement System, the New York State Common Retirement Fund, the North Carolina Retirement Systems and the Ohio Public Employees Retirement System.

Despite the joint call for the meeting, not every state pension fund wants the same thing. Some have called for Mr. Eisner to resign while others are concerned that Mr. Mitchell is not independent enough to serve as chairman. But all of them want Disney's directors to address more openly the company's plans for succession.

"What they need to address is the perception issue about their independence," said Cynthia Richson, a corporate governance executive with the Ohio Public Employees Retirement System. "It is legitimate to discuss these issues, particularly the future leadership of the company."

In a response to the letter from representatives of the five states, Mr. Mitchell said that he would be pleased to meet with them as he had indicated in earlier conversations. The letter also stated that a board member, Judith Estrin, indicated on March 16 that a meeting would be held, which, among critics, calls into question the timing of Monday's letter.

Ms. Richson said that Mr. Mitchell had already contacted Ohio representatives about a possible meeting. She added that members of Ohio's public employees' and teachers' pension funds met by phone with Disney executives Monday and discussed long-term performance.

To be sure, Disney has not let up on its campaign to woo investors. Top executives have continued to meet with investors since the annual meeting. Mr. Mitchell has been fielding calls from disgruntled investors, too. And Ms. Estrin is expected to give an address Thursday to the Council of Institutional Investors, where many of Disney's largest investors and critics are likely to gather.

Disney has also hired local public relations firms where investors are based to help it garner support. Curt Steiner, a public relations executive at Steiner Lessic Public Relations, which has offices in Cleveland and Columbus, Ohio, said he was hired by Disney to help with Monday's meeting with the Ohio Public Employees Retirement System, which is also a client of Steiner Lessic. Mr. Steiner is described as a strategic adviser to federal and state officials on the company's Web site. He said it was the first time he had been hired by Disney.