News continues to pour in about Michael Eisner and his stepping down from the position of Chairman of the Board of The Walt Disney Company, following yesterday’s shareholders meeting which saw a huge 43% of shareholders withholding their vote for Eisner’s re-election to the Board. Eisner will remain the CEO of the Company, something that is seen as vital if an attack from companies such as Comcast should rear their head. “Despite yesterday’s no-confidence vote, Eisner still has the board’s support. One concern, according to several people close to the company, is that if Eisner were to resign now with no successor, the company would be vulnerable to a takeover attempt like the recent hostile bid from Comcast. Eisner, these board members said, still has something to add to the company”, writes SeattlePi.com Business.

CNN International has more, including Comcast’s renewed bid. The cable giant said it “would like to meet with Disney’s board to discuss a friendly merger”, something that was still claimed by Disney to “not be in the interest of Disney shareholders. But it also said it was open to looking at a ‘reasonable proposal’. Still, the turmoil in Disney’s executive suite could play into Comcast’s hands. ‘In order to make it clear to Comcast that they don’t want to be taken over, Disney needs to get a strong competent manager in there quickly’, said Bob Monks, principal with Lens Governance Advisors, a corporate activist law firm”.

“‘This is without a doubt the most withholding of support for a CEO of a major company that I have ever seen. It’s really an expression of dissatisfaction’, said Kevin Calabrese, an analyst with Argus Research. Disney had previously said it expected at least 30 percent of shareholders to oppose Eisner’s re-election to the board, but Stanley Gold accurately predicted at the beginning of Wednesday’s meeting that more than 40 percent of shareholders would withhold their votes for Eisner. ‘It is an unprecedented no-confidence vote in the annals of American business’, Gold said”.

Already, some of the 43% of voters who withheld their votes are saying that this step is still not enough. Stepping into the role of Chairman is George Mitchell, someone who many feel is too close to Eisner and represents little change. In fact, the move could be seen as sign of retreat and further stoke the campaign to oust Eisner. The Reuters News Agency has more on Mitchell and his history with the company. Eisner, appearing on Disney’s own ABC network in an interview with anchor Ted Koppel, said he planned to stay as chief executive at least until his contract expires in 2006.

A number of news stories from around the web can be found, and are updated regularly, at Google Business News and, as always, Roy Disney’s SaveDisney.com is keeping tabs on developments. Finally, the Walt Disney Company has issued an official statement, made available late last night at The LA Times.com. For those without subscription, we re-print that statement here:

Statement From the Board of Directors of The Walt Disney Company,
released late Wednesday, announcing the elevation of
former U.S. Sen. George Mitchell to the post of chairman:

PHILADELPHIA–(BUSINESS WIRE)–March 3, 2004, 9:02 pm ET– The Walt Disney Co. board of directors, mindful of the shareholder vote today, announced that it is separating the positions of CEO and chairman. Effective immediately, the board created the position of chairman of the board. The board has unanimously elected former Sen. George Mitchell to serve in that non-executive position.

While making this change in governance, the board remains unanimous in its support of the company’s management team and of Michael Eisner, who will continue to serve as chief executive officer. Following recent detailed reviews of each major business and with an ongoing, in-depth knowledge of our operations, the board has confidence in the strategic direction of the company. Our belief in the company’s strategy, financial results over the last several quarters, and the level of earnings and improved returns we expect going forward make us confident that results will validate our judgment on the quality of our management team.

While there appear to have been a number of different forces at work in the shareholder vote, a significant message conveyed in the vote was in the area of governance, as evidenced by governance-driven withhold recommendations by two influential proxy recommendation groups and the public and private statements by a number of other shareholders. In particular, there was substantial focus on the question of whether the chair and CEO functions at the company should be split.

That is not to say that we view the vote as limited to governance issues alone. We are aware that some voted for an immediate change in management and in the board. However, taking all of these factors into account, we believe the action we have taken today is in the best long-term interest of the shareholders of the company.

With respect to the statement made by Comcast, the board of directors stated that it does not believe today’s reiteration by Comcast of its previous proposal, which we rejected as inadequate, would lead to a transaction beneficial to Disney shareholders. The board will carefully review and analyze any reasonable proposal.

– Source: The Walt Disney Company, via The LA Times.com.