Well, nobody expected this year’s Walt Disney Company annual
shareholders’ meeting to pack as much excitement as last year, especially
in light of the location. I’m not sure that anybody really expected it
to be quite so sedate, though.
By 40 minutes before the doors open, a few hundred people have arrived
to join the line Photo by Mark Goldhaber.
Last Friday, The Walt Disney Company held its annual meeting for shareholders
in Minneapolis, Minnesota. Minnesota? In the middle of February? Many
were joking that the choice was made because the convention center in
Anchorage, Alaska was already booked solid. But Disney’s strategy worked
exactly as planned. Turnout was extremely low, and the polite Minnesotans
didn’t raise much of a fuss about anything. Even dissident former board
members Roy E. Disney and Stanley Gold, who were in attendance, remained
quiet in the audience.
Not even the press turned out. There were only about 20 press credentials
granted, most of them photographers, based on a quick peek at the sign-in
sheet. You could have fired a cannon in the press room without hitting
anybody. Compared to last year’s huge platoon of press photographers jostling
for space to set up on the riser at the back of the hall, this year’s
tiny contingent had plenty of room on a much smaller stand in the center
of the hall.
A solitary group of four protesters picket in front of the Minneapolis
Convention Center, claiming that Disney cheated them in a business deal.
Photo by Mark Goldhaber.
Last year, well over 3,000 people jammed into every corner of the Philadelphia
Convention Center, requiring another room to handle the overflow. This
year, less than 1,000 people had plenty of room to spread out in the Minnesota
Convention Center, with the entire back half of the ballroom empty except
for perhaps a half-dozen shareholders.
The first in line last year had arrived at 5:00 a.m., and the line was
hundreds of people strong two hours later. Nobody was even in line at
7:00 this year. Ron Laurence arrived at about 7:15 and was first in line.
Laurence, who had traveled from New Hampshire, was attending his 12th
Disney shareholder meeting. He expected the meeting to be fairly routine.
“The numbers are up,” said Laurence, “so it should go pretty smooth.”
From left to right, Ron Laurence, Deborah Kniebusch, Bryon Kniebusch and
Robert Moorlach wait to enter the meeting, having arrived early to claim
the first spots in line. Photo by Mark Goldhaber.
First-time attendee Robert Moorlach, who had traveled from South Dakota
for the meeting, was fourth in line. Moorlach wasn’t sure what to expect,
but was looking forward to the event.
What the few assembled folks saw was a well-choreographed performance,
showing just how polished an entertainment company Disney can be.
Those waiting in line were entertained by Disney characters flown in
from California, who signed autographs and posed for photos. The Fab Five
(Mickey, Minnie, Donald, Goofy and Pluto) were joined by a phalanx of
princesses (Cinderella, Sleeping Beauty, Snow White, Jasmine, Belle, and
Mulan). As they entered the ballroom, shareholders and guests were handed
cloisonné pins commemorating Disneyland and the Happiest Homecoming
on Earth promotion.
Cinderella entertains shareholders waiting to enter the meeting. Photo
by Mark Goldhaber.
The meeting started on time and briskly went through presentations on
the company’s status and outlook. Chairman George Mitchell opened the
meeting by explaining that the constantly shifting meeting location (including
Dallas in 2001, Hartford in 2002, Denver in 2003, Philadelphia in 2004)
as part of the company’s attempt to give all shareholders a chance to
attend a meeting near them. He continued with an overview of governance
reforms underway. Mitchell introduced the members of the Board of Directors,
who were all in attendance. He also gave an update on the search for a
new Chief Executive Officer to replace current CEO Michael Eisner, saying
that the board is “right on target to do everything we said we would
do.” Mitchell explained the lack of information available about the
CEO search by saying that the board had been advised by the executive
search consultants (Heidrick & Struggles) that they should “keep
the details of the search private even as we made the process public.”
Well-known corporate gadfly Evelyn Y. Davis poses with Mickey and Minnie
before the meeting. Photo by Mark Goldhaber.
Mitchell was followed by Chief Financial Officer Thomas Staggs, who touted
his background in Minnesota. Staggs then gave a quick rundown of the company’s
financial situation. When the financials were finished, Staggs introduced
Michael Eisner and Disney President Robert Iger. Eisner started off by
discussing the changes to the company over the last 20 years, using pretty
much the same slides that had been presented at the investor’s conference
in Florida the previous week. Then Iger began discussion of the company’s
strategic initiatives for the future.
Eisner and Iger went back and forth, with Eisner generally talking about
the good things that had happened in the company to help cement his legacy,
while Iger spoke about the future, trying to show that he was the right
man to lead the company after Eisner’s retirement.
Disney Chairman George Mitchell opens the shareholder meeting. Photo by
Mark Goldhaber.
Amid the promotion of all things going well with the company, they also
gave a look at some of the new initiatives coming in the near future,
such as an ESPN phone due later this year. The company is hoping that
they can start another franchise (they were really pushing the “franchise”
angle in their presentations) with the Disney Fairies line, which will
be introduced later this year with an illustrated novel, to be followed
by an animated series, and finally merchandise. They also showed hidden-camera
footage of a focus group of young girls shrieking with avarice for proposed
merchandise in the new Disney Cuties line, which has been in the Disney
Stores for a couple of months now (for those who haven’t seen the merchandise
yet, think of it as “Disney meets Hello Kitty”).
The Disney Board of Directors stands after being introduced by Chairman
George Mitchell. Michael Eisner is at left. Photo by Mark Goldhaber.
Also as part of the presentation, the directors of the four upcoming
animated features appeared on tape to talk about how well things were
going in animation. Mark Dindal (Chicken Little, 2005), Stephen
Anderson (A Day in the Life of Wilbur Robinson, 2006), Chris Sanders
(American Dog, 2007) and Glen Keane (Rapunzel Unbraided,
2008) gave no indication of any problems related to the demise of traditional
animation, keeping with the company line. In addition, we were reminded
that not only was there one movie remaining in the Pixar partnership (Cars,
opening June 9 next year), but that Disney already had Toy Story 3
in production for 2008. We were also shown a trailer for The Lion,
The Witch and The Wardrobe, the first in another planned franchise,
The Chronicles of Narnia, which opens on December 12 of this year.
Disney CEO Michael Eisner recaps the company’s progress over the past
20 years, hoping to cement his legacy. Photo by Mark Goldhaber.
And then it was time for the business part of the meeting. Chairman Mitchell
ran this portion of the meeting, introducing each proposal and moderating
floor discussion. Upon the opening of discussion on the proposal to re-elect
all directors for another one-year term, Evelyn Y. Davis, a well-known
shareholder rights activist and gadfly, took the microphone for the first
of many times. She said that she was voting for all directors, “Even
you, George.” She also explained that she was voting for Robert Iger
as a director, but that she did not support him as a future CEO. She said
that she wanted to see Disney hire a low-profile outsider as the new CEO,
someone not known to the public and well-respected in the industry, someone
who wanted the job, not the reputation.
Davis also asked questions about the Miramax deal and the status of Euro
Disney, SCA. While she received a good response from the audience as she
first outlined her opinion of Iger and the requirements for a new CEO,
her continued belittling of the directors and officers and repetition
of requests for certain information had the audience ready for her to
finish her talk and sit down. This attitude was not helped when she also
addressed the meeting on two other proposals, including one that she had
submitted.
Disney President Robert Iger talks about the company’s future, hoping
to be the next leader. Photo by Mark Goldhaber.
In the end, all directors were overwhelmingly re-elected, with the largest
withhold vote being 7.8 percent against Eisner. The two company proposals—re-appointment
of PricewaterhouseCoopers as accountants and approval of the new Stock
Incentive Plan—both passed (with 97.5 percent and 62.6 percent in
favor, respectively), Mrs. Davis’ anti-greenmail proposal passed with
56.4 percent in favor, and a proposal by the New York City Retirement
Fund regarding China labor practices failed with only 7.8 percent in favor.
The voting completed, the floor was opened to questions, with Eisner
and Iger taking center stage to respond. Some dealt with business issues;
others were of the type only heard at a Disney meeting.
The front half of the ballroom has many empty seats. Photo by Mark Goldhaber.
Two speakers asked about Disney policy regarding smoking in films. Eisner
and Iger responded that Disney was trying to keep smoking out of films,
and that in the rare instance that characters smoked, the smoking was
usually done by villains and it was not glamorized. Iger said that they
will post the non-smoking policy on the Web site.
In response to a question about Pixar, shareholders were told that work
on sequels will continue for all Pixar films, and that Disney will look
for new partners if Pixar can’t continue.
Michael Tuchman of the Friends of Figment Web site asked Eisner to bring
back the Dreamfinder character as a companion to Figment, and to shrink
the huge Figment from the meet-and-greet at Epcot back to his original
small size to go with Dreamfinder. Eisner graciously answered that he
had been trying to convince the Imagineers of the same thing, but he had
not been able to state it as passionately as Tuchman, and said that perhaps
he should bring Tuchman to his next meeting on the subject.
The back half of the ballroom is virtually devoid of people. Photo by
Mark Goldhaber.
Speakers from warmer climates asked why the meeting was held in such
a cold location (and received icy responses from the locals), and locals
thanked Disney for holding the annual meeting where it was easier for
them to attend. It can only be hoped that, with the company celebrating
Disneyland’s 50th anniversary this year, that the next annual meeting
could be held in Anaheim to be part of that event (Just a suggestion to
the next Disney CEO.)
And just like that, the meeting was over. Chairman Mitchell asked that
everyone vacate the ballroom in an orderly fashion, and stated that some
of their favorite Disney characters were waiting to greet them outside.
The room was quickly emptied, and Disney had what they wanted: A quick
and angst-free meeting.
After the meeting, first-time attendee Moorlach said that he believed
that the board was taking the correct approach to the CEO search in keeping
the details private. He enjoyed the meeting, and stated that he was looking
forward to attending more of them in the future.
