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Eisner resigning as Disney CEO ... in two years

By Gary Gentile
The Associated Press

Michael Eisner fought off an ouster attempt.

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In a letter to Disney's board dated Thursday, Eisner, who helped transform the company into a media powerhouse whose performance has lagged in recent years, said he intends to step down when his contract expires Sept. 30, 2006.

"Until then I shall continue to exert every effort to help the company achieve our goals, to assist the board in selecting the new chief executive officer, and to make the transition expeditious, efficient, and smooth and easy," Eisner wrote.

The timing of the announcement surprised investors and many of top company executives. It set off a guessing game about possible successors and raised questions about whether the move will silence his most vocal critics.

Eisner, 62, did not say whether he would seek to retain his board seat.

	Robert Iger could succeed Eisner as Disney CEO.

Disney's chairman, former Sen. George Mitchell, said the board would continue the process of identifying a successor, "even as Michael continues to lead the company to achieve its goals."

Critics called for Eisner to step down sooner and resign his seat on the board.

"It is not clear to us how a two-year lame duck CEO will benefit shareowners, and his continued presence on the board would prevent the company from the clean break that is needed to restore investor confidence," Sean Hannigan, president of the California Public Employees' Retirement System, the nation's largest pension fund, said in a statement.

Roy Disney, nephew of company co-founder Walt Disney, and Gold have sustained their ouster efforts and said they would run a challenge slate of directors at next year's shareholder meeting. Eisner's announced retirement may undermine those efforts. Neither Roy Disney nor Gold returned a call seeking comment.

Eisner has strongly endorsed Disney President Robert Iger as a potential successor. But the board could look to other executives within the company or former Disney executives who now lead their own companies.

Iger is well-respected, but his fate is seen as tied to that of the ABC Television Network, which he has vowed to return to profitability. ABC plunged to fourth place among the major networks in recent years and continues to struggle.

Former Disney executives such as Paul Pressler, CEO of the Gap, or Meg Whitman, CEO of eBay, also could be considered for the job, analysts said. Former Viacom President Mel Karmazin and News Corp. Chief Operating Officer Peter Chernin also have been mentioned as possible successors.

Eisner joined the company in 1984 along with former Warner Bros. executive Frank Wells at the behest of Roy Disney. Eisner and Wells transformed Disney by revitalizing its dormant animation efforts, expanding theme parks and, most dramatically, purchasing Capital Cities/ABC in 1995, which added ABC, ESPN and other networks to the mix.

Copyright © 2004 The Seattle Times Company

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