By: Evan Pondel

March 2, 2004, Los Angeles Daily News

Walt Disney probably never envisioned that a name synonymous with the happiest place on Earth would one day provoke discontent among a growing number of shareholders.

Even the company itself admits that at least 30 percent of voting shareholders are likely to withhold support from Michael Eisner when the tally is revealed this morning in Philadelphia.

Ill sentiment toward the 61-year-old executive has grown infectious, and no matter what the outcome of the shareholders' vote, change is almost inevitable for the Burbank-based company.

That's why Sy Marks decided to scrutinize his proxy statement this year. The retired Granada Hills meat-cutter has owned Disney stock for nearly four decades. He can remember a time when Walt Disney would conduct the annual shareholders' meeting at the Burbank studios. Children would attend with their parents to catch a glimpse of Mickey Mouse before the executives began talking business. And as extra incentive, the company passed out complimentary tickets to Disneyland.

"Walt would turn over if he found out what was going on right now," said Marks, who owns more than 400 shares of the company. "I am hoping that somewhere along the way somebody will kick this guy Eisner out of there. The company was built by Walt as the happiest place on Earth. It wasn't built to be a big business entity."

So Marks withheld his vote for Eisner's re-election to Disney's board of directors. Unlike previous years when voting via proxy didn't carry the same emotional weight, Marks said mailing in his voting form was rather cathartic this time around. Other shareholders' are exhibiting behavior much like the 74-year-old.

There is a certain degree of disenchantment that shareholders no longer want to harbor. Shares of Disney certainly reflect investors' lack of enthusiasm and some believe the company's inability to discuss those weaknesses is yet another sign of instability.

"Eisner's not for the people. And he's been at Disney too long. What we need is a younger man with new ideas," said Albert Naccarelli, 76, who once attended Disneyland four times a year when prices were about $3.95 a ticket. "Sure, that was a long time ago. But these days it's almost too expensive to take my grandchildren."

Naccarelli of North Hills owns about 1,000 shares of Disney and intends to hold his position until the stock shows improvement. He wasn't impressed by this year's glossy, color voting materials.

A poster of Mickey Mouse and the company's recent achievements enveloped a note addressed to shareholders reading, in part: "We hope you are pleased with the strong recent results of your company and the outlook for our future. ... Send a strong signal that you are for continued improvement by voting FOR all directors standing for re-election."

Historically, shareholders' votes are meaningless since most vote in line with the board of directors' recommendations. "Pure economics would tell you that voting is silly, unless you happen to be that marginal voter who sways the results," said Thomas Lys, a mergers and acquisitions professor at Northwestern's Kellogg School of Management. "Do I suspect that more people are likely to vote because of Eisner? Well, emotions make people vote."

Many people find themselves emotionally connected to their investments, but that's especially true of Disney, Lys said. Perhaps Disney's product has made it a lot easier for shareholders to stomach Eisner for this long, he added, but the deep-seeded animosity people have for Eisner will continue to garner more attention.

And if 30 percent of shareholders dislike Eisner, "it becomes a riot mentality in which more and more people will position themselves against the guy."

But not everyone is at odds with Eisner.

Peter Brown, a 51-year-old actor from Sylmar, agrees with the executive's approach to the business. Though he owns a relatively small position in the company, Brown said Disney has always been a long-term investment for his portfolio.

"I think Eisner has done good work with Disney. He has been able to sublimate personal glory for the good of the company," Brown said. "And Michael hasn't been operating in a vacuum. The board was chasing dollars to address the needs and wants of the marketplace."

Brown is also highly critical of Roy E. Disney, Walt Disney's nephew and former board member who has blogged his distaste for Eisner's leadership. "Roy Disney voted in favor of the board governance rules implementing a mandatory retirement age of 73. But the problem is Roy didn't want the policy to apply to himself," Brown said.

Regardless of Disney's fate, few would argue that Eisner has not learned a lesson. "A big lesson, for that matter. And that would be, if you play king for too long you don't realize how truly vulnerable you are," Lys said.