CalPERS Won’t Vote in Favor of Disney CEO

The California Public Employees’ Retirement System, the largest public pension fund with $180 billion in assets, said Wednesday that it opposed reelecting Walt Disney Co. Chief Executive Michael Eisner to the company’s board.

CalPERS Senior Investment Officer Christianna Wood said the fund won’t vote its 9.44 million Disney shares in favor of Eisner. It will support the reelection of Disney’s other directors, including Chairman George J. Mitchell and President Robert Iger. Burbank-based Disney, the second-largest media company, is holding its annual meeting Friday in Minneapolis.

The decision echoes CalPERS’ move last year when it and at least seven other state pension funds withheld votes for Eisner’s reelection, citing Disney’s “dismal” performance during the last five years. CalPERS’ decision signals that some investors may remain active in pushing for Eisner to step down sooner than planned.

“We wanted to send a message that he needs to move on,” Wood said.

Disney spokesman John Spelich declined to comment.

Eisner said in September that he would step down as chief executive when his contract expires in 2006. The company has begun a search for his replacement and plans to name a new CEO by June.

Former CalPERS President Sean Harrigan said in September that it wasn’t clear how a “two-year lame duck CEO” would benefit shareholders.

Sacramento-based CalPERS’ stake in Disney represents about half of 1% of Disney’s stock.

Rob Feckner succeeded Harrigan as interim president in December. The fund is headed by Chief Executive Fred Buenrostro.

Disney shares fell 49 cents to $29.35 on the New York Stock Exchange. They have risen 23% in the last year.

Dissident former directors Roy E. Disney and Stanley P. Gold said Tuesday that they would withhold their votes for the company’s entire board because they were dissatisfied with its search for a successor to Eisner.

The two said in a statement that the board’s “credibility is in question due to reports that they have yet to interview a single outside candidate.” Roy Disney directly owns 16.5 million Disney shares, making him the company’s largest individual holder.

Glass Lewis & Co., a San Francisco-based proxy advisor, said last week that it was urging shareholders to withhold their votes for Mitchell because of “continuing concerns” about his independence. Mitchell has been a consultant to Disney, and his law firm has received fees from the company, Glass Lewis said.

Glass Lewis recommended that Disney shareholders vote to reelect all other directors, including Eisner.