Time running out for Disney boss

MICHAEL Eisner's position as chairman of Disney has suffered a potentially fatal blow with five influential state pension funds calling for the end of his reign.

They are following the lead of Californian super-pension fund Calpers, which came out against him on Wednesday.

Although the funds control only 30m shares, about 1.5% of the company's stock, their public opposition to Eisner is likely to galvanise other investors and may make his position untenable.

The same group of five forced the resignation of Richard Grasso from the New York Stock Exchange last year when they opposed his huge pay packet and criticised his management.

The shareholder vote at next Wednesday's annual meeting will not affect Eisner's position as chief executive, which is a board decision.

'I call on Disney directors to separate the positions of chairman and chief executive and to replace Mr Eisner as soon as possible,' said New York Comptroller Alan Hevesi, trustee for the nation's second-largest pension fund. He is joined by New Jersey, Connecticut, Massachusetts, Virginia and Oregon funds in calling for Eisner to step down.

Two influential investor advisory services - the Institutional Investor Service and Glass Lewis & Co - have also recommended a vote against Eisner. Glass Lewis clients own more than 15% of the shares.

At the meeting, all board members-will seek re-election unopposed, but in the light of such overwhelming opposition it is hard to see how Eisner can continue.

The massive show of opposition is seen as a victory for Roy Disney, campaigning for Eisner's ousting since being forced from the board last month. Roy, the last Disney family member on the board, was joined in exile by long-term ally Stanley Gold.

They argue the 61-year-old is responsible for a decade of decline at the media giant. For many, the rejection of the $50bn (£27bn) Comcast bid, following hard on the heels of the loss of the lucrative Pixar distribution deal, was the last straw.

'Disney is at a crossroads and the vote of shareholders next week will reflect an unparalleled mix of uneasiness, frustration, progress and optimism,' said Connecticut Treasurer Denise Nappier in a statement.

Eisner made an emergency visit to Columbus, Ohio, to meet state pension funds and the Attorney General, who met earlier in the week with Roy Disney.

The Ohio pension funds will announce their verdict on Eisner today.