Disney Remains Eisner's Kingdom
Speaking as someone who lived and worked for years in a string of petty Third World dictatorships, I believe I'm well qualified to predict the behavior of the regime of the recently declared Republic of Eisneria.
Like other dynasties that rule by fiat and deception (self- and otherwise), Walt Disney Co. management is likely to engage in the reinterpretation of reality, the misrepresentation of electoral results, the lionization of dupes and the execration of dissidents. Disasters will be rationalized away and victories exaggerated. Truth will no longer be an objective thing, but will emanate by diktat from members of a small, insular circle devoted to the glorification of the Big Man, to whose reputation and authority their own will be inextricably tied.
Some of these phenomena are already evident at Disney, where Chief Executive and ex-Chairman Michael Eisner continues to hold on to his chair with what George Orwell would have called a "prehensile bottom."
Last week, Eisner and his board received an unmistakable signal of shareholder discontent -- a 43% no-confidence vote against Eisner as chairman, along with more than 20% against "presiding director" George J. Mitchell and two other board members. Instead of snapping to attention, they took the cosmetic step of stripping Eisner of his chairmanship but keeping him in the CEO's job, from which he will continue to direct the affairs of the company. Mitchell, who should properly have resigned from the board given the strong vote against him, instead accepted the post of chairman.
The company justified these actions by pretending that the vote was merely a referendum on abstract principles of corporate governance, rather than a judgment on the fitness of Eisner and other directors to continue in office. Appearing that night on ABC's "Nightline" with Ted Koppel, Eisner dismissed the tally as "not unprecedented in today's world," explaining further that "many, many" companies with corporate governance issues average similar protest votes.
This was a distortion of the truth on a Stalinist scale. A 43% vote against a corporate chairman is unprecedented at a major company, according to the Investor Responsibility Research Center, which calls it a record by a wide margin. (The previous record was a 28% protest vote against Lockheed Martin Corp. Director Frank Savage, who was under fire for serving on Enron Corp.'s board during its scandal.) It's true that votes on shareholder resolutions protesting specific corporate policies often do reach the level of 40% or higher. But Eisner understood, as perhaps Koppel did not, that this was an entirely different kind of vote.
