Walt Disney Co.'s board of directors announced Tuesday that it expected to name a successor to Chief Executive Michael Eisner no later than June, setting in motion a wide-ranging search while raising new questions about Eisner's future in the company.
Board Chairman George J. Mitchell said Eisner, whose contract expires in September 2006, would step down as soon as the new CEO was installed. Exactly how quickly that might occur after his successor is named is unclear.
Regardless, the board indicated that it expected Eisner -- who Tuesday celebrated his 20th anniversary at Disney's helm -- to remain at the company in some capacity until the end of his contract. It wasn't immediately certain what that role might be.
Investors have voiced concern that Eisner's continued presence at Disney could discourage candidates from considering the CEO job.
"No one is going to want to come in as an apprentice for Eisner for a year and a half and wait for their turn in the big office," said Greg Taxin, chief executive of Glass Lewis, a proxy advisory firm that counsels many Disney shareholders. "It certainly raises questions."
Still, the board's action gave at least some investors something to cheer about.
For more than a year, directors have been under pressure from major shareholders to outline their succession plans. Tuesday's announcement laid out a clear timetable for the search, which will be conducted by an executive headhunting firm that the board has yet to name.
"They gave us a date that our clients in the investment community were looking for," said Patrick McGurn, senior vice president of Institutional Shareholder Services. "It's a very positive development."
Among the possible contenders, the board singled one out for praise: Disney President Robert Iger. The lone inside candidate and Eisner's top choice, Iger is "highly qualified for the position," the board said in a statement.
But the board, which has been accused in the past of being a rubber stamp for Eisner, took pains Tuesday to demonstrate its independence. In its statement, it said "the process should include full consideration of external candidates as well."
Possible replacements for Eisner include News Corp. President Peter Chernin; Yahoo Inc. CEO Terry Semel; Jeff Bewkes, chairman of Time Warner Inc.'s entertainment and networks group; and Leslie Moonves, co-president of Viacom Inc.
