Disney shareholders saw the ugly side of Mickey Mouse in a heated meeting yesterday afternoon which resulted in a 43 percent shareholder vote of "no confidence" against the company's board of directors and its Chairman and Chief Executive Officer Michael Eisner.
Later in the day, after the stockholder meeting ended, the Company's Board of Directors voted to split the Disney executive position. Eisner is to remain as CEO, but former U.S. Sen. George Mitchell will become the chairman of the board.
"It's obvious that above all, this 43 percent 'no' vote is almost without precedent," said Management professor Michael Useem, who added that the vote is especially notable because it is simply a vote of no confidence -- there are no replacements lined up to take the helm of Disney should Eisner or the Board of Directors be ousted.
According to students in attendance, about 3,000 people were at the meeting at the Philadelphia Convention Center -- dressed in everything from suits and ties to Disney hats and shirts.
Though the 75 statues of Mickey Mouse tried to set a welcoming atmosphere for shareholders, the mood inside became anything but cheerful.
Following the agenda items, former board members Stanley Gold and Roy Disney were permitted to stand and chastise Eisner for 15 minutes. Their speech -- which was met by a standing ovation from many at the meeting -- soon ran over the time limit, though they continued to berate Eisner, who stood just yards away.
Gold and Disney have led a campaign, touting the slogan "Restore the Magic," during which they have mobilized shareholders against Eisner and his board.
The two accused Eisner of bad leadership and the board of complacency.
Eisner, facing unprecedented criticism, "tried to joke about it -- which is I guess the only thing he could do," said Wharton freshman and meeting attendee Ian Samuels.
The meeting was marked by heated exchanges between shareholders and board members.
"You could definitely feel the tension in the room," Wharton freshman Joel Kristopherson said. "Some people were standing up and cheering when Stanley Gold and Roy Disney came in, and they were booing at other times -- so it was definitely the peanut gallery reaction to everything that was being said."
Management professor Marshall Meyer commented on the social significance of the meeting.
"The debate seems to be not entirely about the short-term profitability to Disney," Meyer said. "It's also about the soul of the company."
"This is an American icon," Meyer added, noting that the debate seems to hinge on whether Disney's "iconic state ought to be preserved or turned into a cash machine."
"This is an unusual company because of the nature of its product," Meyer said. "This is a product which touches everybody ... in a very, very favorable way."
Useem noted that "it's premature to write [Eisner] off the board," especially given his track record. Eisner has faced criticism in the past -- at a January 1997 shareholder meeting, Eisner was up against similar challenges from disgruntled shareholders, though no vote occurred, Useem said.
