Ovitz’s Contract With Disney Gets Him a Cool Million : Hollywood: His annual salary is $250,000 more than Eisner’s. Stock options pump up the value.

One of the more eagerly awaited documents in Hollywood was finally made public Tuesday, and it wasn’t the latest hot script.

It’s Michael Ovitz’s five-year contract as president of Walt Disney Co., which shows, among other things, that Ovitz’s annual salary is $1 million a year, $250,000 more than that of Chairman Michael Eisner.

Don’t weep for Eisner, however. The documents, filed with the Securities and Exchange Commission, show Eisner’s compensation for the year ended Sept. 30 came to $14.8 million, including a bonus of $8 million and an award of “restricted stock” valued at about $6 million.

Although Ovitz’s salary is small by Hollywood standards, his contract is a lucrative one, with the bulk of the value in options for 5 million shares of stock, which Disney had previously disclosed.

Although it is impossible to predict how much those options will be worth--because they hinge on Disney’s stock performance over the next seven years--executive pay consultant Graef S. Crystal puts their value at about $110 million. Crystal was consulted on the Ovitz package by Disney directors.

Three million of the options are exercisable during the last three years of his five-year contract, with 2 million exercisable during his sixth and seventh year if his contract is renewed. All of Ovitz’s options can be exercised at $57 a share; Disney stock closed at $59.625 on Tuesday, up 12.5 cents. If Disney fails to renew the contract after five years, Ovitz gets a check for $10 million.

Ovitz also may receive annual bonuses awarded by the Disney board, but the agreement shows that he does not have a guaranteed bonus. The filing says Ovitz will also enjoy “benefits and perquisites currently made available” to Eisner.

Details of Ovitz’s employment agreement, which normally would have been made available in a proxy statement, were filed in anticipation of Disney’s $19-billion acquisition of Capital Cities/ABC Inc. early next year.

Ovitz--who as chairman of Creative Artists Agency was frequently referred to as the most powerful executive in Hollywood--agreed to join Disney in August and is expected to join Disney’s board as a director next year. He flirted with joining MCA Inc. after Seagram Co. bought it, but turned down a package said to be potentially worth more than $250 million.

Since joining Disney, Ovitz’s contract has been the subject of much speculation.

Unlike Eisner and the late Disney president, Frank Wells, Ovitz’s bonus will be determined by the compensation committee of Disney’s board rather than through a performance-based formula.

Sources said Ovitz does not have a formula because it is unclear for now exactly what kind of financial performance to expect from the company in the wake of the Cap Cities deal. They speculated that he may have one in the future.

Crystal said Ovitz undoubtedly is the highest-paid second-in-command in the country; he called the contract “clean and huge.” But given the elaborate spending in Hollywood, Crystal said--such as stars who make $20 million a film--it isn’t that exciting.

“By Hollywood standards, this is a yawn,” Crystal said.

There are a handful of unusual clauses in the agreement, including “the right but not the obligation to use the executive’s name or likeness for any publicity or advertising purposes.”

It says Ovitz will devote “his full time and best efforts exclusive to the company” as long as it doesn’t preclude him from charitable and community affairs, managing his personal passive investments and continuing to serve as a board member of computer publisher Ziff-Davis Holdings, which is being acquired by Japan’s Softbank.

The contract also says that Ovitz recognizes that “his services herunder [sic] are of a special, unique, unusual, extraordinary and intellectual character giving them a peculiar value, the loss of which cannot be reasonably or adequately compensated for in damages.” In the event Ovitz breaches his contract, the document says, Disney is entitled to seek legal remedies.

According to the document, the second-highest-paid corporate executive at Disney in the last fiscal year was Senior Executive Vice President Sanford M. Litvack, who made $2.2 million, including a $1.6-million bonus.

Disney’s new chief financial officer, Stephen F. Bollenbach, who was recruited from Host Marriott, received 150,000 shares of restricted stock to join the company.