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| Disney CEO Michael Eisner is still facing criticism at Friday's annual meeting, even with better results and his plans to retire. |
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NEW YORK (CNN/Money) -
Walt Disney shareholders meet Friday with the company's future leadership set to dominate the proceedings again, even if the full-scale revolt of last year has quieted.
The 2004 annual meeting last March saw CEO Michael Eisner stripped of the post of chairman after 45 percent of shareholders withheld their votes for him. In September, Eisner announced he would retire by 2006, and the board is expected to name a successor by this spring.
Results at the company have improved since a year ago, due to improved theme park attendance and strong gains at ESPN and other cable networks.
But some critics are worried that it looks more and more likely that Disney President Robert Iger will be named the next CEO, and that Eisner has reportedly expressed interest in being named chairman after giving up the CEO post.
Some of those who led the shareholder revolt a year ago are withholding votes for Eisner and the board again this year due to the succession issue.
Former Disney board members Roy Disney, nephew of the company's founder, and Stanley Gold, who led the fight to remove Eisner a year ago, said earlier this week they arewithholding their votes from board members again this year to voice displeasure with the CEO selection process.
"At this point in time, the board's credibility is in question due to reports that they have yet to interview a single outside (CEO) candidate," the dissidents said in a statement. "Potential candidates, meanwhile, are indicating a lack of interest in the position because of the delays in the search process and the uncertainty regarding when Mr. Eisner will leave the Company."
CalPers, the California pension fund for state employees which controls 9.5 million Disney shares, also will not vote for Eisner, and has said Disney needs new leadership.
But Institutional Shareholder Services, which advises investors in proxy votes, has endorsed the full board after recommending last year that Disney shareholders withhold votes from Eisner. And the Connecticut state treasurer and New York state comptroller, who last year publicly opposed Eisner, are voting for him and other directors this time around, spokesmen for both agencies said.
Some analysts think the company's improved results will make it harder for the board to chose someone other than Iger.
"It's clear that outside candidates have a high hurdle, not just because of Iger, but because of how well the company has turned around," said Paul Kim, media analyst with Tradition Asiel Securities. "The divisions under his supervision are driving the company now."
As president, Iger oversees Disney's television and international operations.
Pixar waits
Investors aren't the only ones looking for clues about the next Disney CEO. Steve Jobs, CEO of partner Pixar Animation Studios (Research), said Thursday his company would hold off deciding who would distribute its films until the next Disney CEO is named.
"Though it's likely we will not forge a new relationship with Disney beyond our current deal, we clearly have slowed down the process of picking a new partner to see how this game of musical chairs will end, and who the new CEO of Disney will be," Jobs told investors after Pixar reported better-than-expected earnings Thursday.
Pixar said a year ago it was breaking off talks with Disney on a new distribution deal but then Eisner announced his retirement. Its string of six blockbusters, including "Toy Story," "Finding Nemo" and "The Incredibles," have poured hundreds of million of dollars into Disney coffers but the joint deal is set to end after Pixar's next release, "Cars," due in summer of 2006.
Meanwhile, Disney leadership is facing publication of potentially embarrassing new book, "DisneyWar: The Battle for the Magic Kingdom," which went on sale Thursday. Among other things, the book, by Pulitzer Prize winner James Stewart, reportedly quotes Eisner as saying he was open to becoming chairman again after he leaves as CEO.
"I don't want to be irrelevant. I'm not going to ask the board to be named chairman. I'm not going to beg for it. But the board might come to me. Then I'd have to consider it," he reportedly told Stewart, in an excerpt reported by the New York Times.
Friday, the New York Post reported a memo that Eisner wrote, reported in the book, in which he wrongly predicted that Pixar's most successful film, "Finding Nemo," would not to be a blockbuster. The film took in $864 million, the record for an animated film until last year's DreamWorks Animation film "Shrek 2."
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