Disney splits auditors, advisers
Company will not use same farm to handle both activities.
February 19, 2002: 5:33 p.m. ET
|
NEW YORK (CNN/Money) - A shareholder proposal that sought to bar Walt Disney Co. from using the same accounting firm for auditing and consulting failed Tuesday but the media conglomerate will adopt the change anyway.
The proposal gained nearly 40 percent of the vote, or 473.1 million shares, an unusually high number for first-time proposals, according to a preliminary tally.
It was the first time the issue has been presented to shareholders. Similar measures, offered by investment funds associated with organized labor, will be presented to more than 30 companies during the course of the year.
While the proposal failed, many large institutional shareholders supported it, said Rick Ferlauto, vice president of Institutional Shareholder Services.
Disney shareholders Tuesday also ratified the appointment of PricewaterhouseCoopers as its independent accountants for fiscal 2002.
Disney's board initially had opposed the audit policy in September when the company sent its proxy to shareholders, spokeswoman Chris Castro said.
Burbank, Calif.-based Disney (DIS: up $0.70 to $23.56, Research, Estimates) adopted the measure in January in light of the Enron Corp. scandal.
"Subsequently public sentiment changed and the company decided this is what shareholders wanted," Castro said. "We will no longer use PwC for consulting services going forward."
Backers of the proposal praised Disney Tuesday for taking the stance, but urged shareholders to pass the proposal to send a message to other companies.
"We've been very prudent in this area over the years, with close and active oversight by the audit committee," Disney Chairman and CEO Michael Eisner said. "But, in the current world, it's become more important than ever to make sure that our shareholders -- and the market as a whole -- have full confidence in our financial reports, including the integrity of the auditing process."
Disney President Robert Iger, speaking at the annual shareholder meeting, said the company is working to create new content and control costs so it will be poised for growth once the economy recovers.
"It is this combination that we believe will produce tremendous results over the long run," Iger said.
Executives pledged to shore up sagging ratings at its ABC Television network. Disney. which laid off 4,000 workers and closed more than 50 retail stores last year, has trimmed nearly $1 billion from annual costs, executives said.
Chief Financial Officer Tom Staggs said the company generated more than $3 billion in after-tax cash flow in 2001 and used a portion of it to buy back 64 million shares. 
-- from staff and wire reports
|
|
|
|
|
|
|
