Disney boss is on the brink

MICHAEL Eisner's days at the top of media giant Disney increasingly look numbered as he loses key shareholder support ahead of next Wednesday's annual meeting, seen by many as a referendum on his stewardship.

Latest to register a lack of confidence in the abrasive chairman and chief executive is America's largest pension fund, which says it will not back his re-election.

The vote of no confidence by the California Public Employees' Retirement System came as a potentially embarrassing report about his hiring of Michael Ovitz was unsealed by a Delaware court, threatening to undermine his credibility with shareholders further.

Calpers, which has $165bn (£88bn) in assets, said: 'We have lost complete confidence in Mr Eisner's strategic vision and leadership in creating shareholder value in the company.'

Sean Harrigan, the fund's president, said the 23% fall in Disney's share price over the past five years was nearly five times the loss on the S&P 500 over the same period.

Although the fund owns less than 0.5% of the company, it wields enormous influence in the investment world because of its record of taking action against underperforming management and its willingness to enforce the highest standards of corporate governance.

It is the first major investment firm to oppose Eisner's re-election and its stance is a victory for Roy Disney and Stanley Gold, the rebel former directors urging shareholders not to vote for Eisner.

Glass Lewis, a consultant who advises investors on corporate governance, also said investors should withhold their vote from Eisner. 'The Disney board has been notoriously insular, famously gullible and blindly loyal to Mr Eisner,' said Lewis. Disney dismissed Lewis's recommendation as a publicity grab.

But Eisner may find it more difficult to dismiss a report on his 1995 hiring of Ovitz, the former Hollywood-agent, who worked for the company for just 15 months before leaving with a $140m pay-off.

The report by Deborah DeMott, a professor at Duke University Law School, was among documents unsealed by the court as part of a shareholder lawsuit against Disney, which had tried to keep it secret until a day before the annual meeting. But the report could be equally embarrassing to Roy Disney and Stanley Gold, who were board members when Ovitz worked at the company.

The meeting comes at a crucial time, with cable group Comcast still waiting in the wings with a $50bn bid for Disney, an offer Eisner and his boardroom cronies rejected out of hand.