The Magic Kingdom is becoming the land of disenchantment–at least for some major stockholders in Walt Disney Co.
Last week, more than a half-dozen large public pension funds said they would withhold their votes from Disney boss Michael Eisner at the company’s annual meeting Wednesday in Philadelphia.
Because he is running unopposed, Eisner needs only one vote to be re-elected to the board. But if opponents can muster 35 percent withheld votes, Disney could be subject in 2005 to a proposed federal rule allowing shareholders to nominate candidates for a competitive election.
However, that would require the votes of the 26 largest shareholders, excluding Eisner, and analysts say it’s unlikely that enough mutual funds that own Disney stock will join the crowd.
“We don’t feel Mr. Eisner has done anything to stop the cyclical rebound we have been expecting,” said Janna Sampson, co-manager of the AmSouth Select Equity Fund and director of portfolio management at Lisle-based Oakbrook Investments. The funds control about 558,000 Disney shares.
Watch for: Eisner to prevail after Wednesday’s vote is tallied. Shares of Disney have jumped more than 14 percent this year, compared with about a 3 percent gain in the Standard & Poor’s 500 index.
