Disney - Succession Problems in the Magic Kingdom?
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Case Details:
Case Code : HROB079
Case Length : 19 Pages
Period : 1984-2005
Pub. Date : 2006
Teaching Note :Not Available
Organization : The Walt Disney Company
Industry : Media, Entertainment, and Gaming
Countries : USA
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"The timing of Mr. Eisner's exit gives Disney's board plenty of time to set in place an orderly succession plan." 1
- Katherine Styponias, Prudential Equity Group analyst, in September 2004.
"He (Eisner) had been in charge of Disney for a decade, long enough, you'd think, for him to develop a crop of up-and-comers. Yet, by his own account, he had failed to do so." 2
- James Surowiecki, Staff Writer at The New Yorker, in October 2004.
Introduction
On March 4, 2004, Michael Eisner (Eisner), Chairman and Chief Executive Officer (CEO) of The Walt Disney Company (WDC), faced a revolt when 43% of shareholders withheld their votes for his re-election to the Board. As a result, the WDC Board split the roles of Chairman and CEO.
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Former U.S. Senator George Mitchell (Mitchell) was unanimously elected Chairman;
Eisner, however, continued as CEO. Eisner had been the second-longest serving
Chairman of WDC, after Walter Elias Disney (Walt Disney) and the second-longest
serving CEO of WDC, after Roy O. Disney (Roy Sr.). Later during an interview on
ABC Network,3 Eisner said he planned to carry on as WDC's chief executive till
his contract expired in 2006. The posts of Chairman and CEO were separated
following intense criticism and demands from the shareholders and from former
WDC director Roy E. Disney4 (Roy) and Stanley P. Gold (Gold) for Eisner's ouster.
Ironically, it was Roy and Gold who had brought in Eisner after the ouster of
Ron Miller5(Miller) as CEO in 1984.
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Following the board meeting in March 2004, Mitchell announced that finding a
successor to Eisner was the next important activity for the Board.
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There was a
lot of media speculation and many prominent names were thrown up: Bob
Iger (Iger) - President and Chief Operating Officer (COO) of WDC, Steve
Jobs (Jobs), Chairman and CEO of Pixar Animation Studios (Pixar),6 Mel
Karmazin (Karmazin), COO of Viacom,7 and Peter Chernin (Chernin),
President of News Corp.,8
among them. In October 2004, the WDC Board hired Heidrick & Struggles,
an executive search firm, to find a suitable candidate to replace Eisner
as CEO. According to some industry analysts, one of the key reasons for
the shareholders' revolt against Eisner was his failure to re-establish
the creative soul of WDC which stood for technological innovation in
animation and creative story telling. |
Disney - Succession Problems in the Magic Kingdom?
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