Mitchell in Disney's world

SUN JOURNAL

Critics: Not everyone is thrilled with the former senator's role in trying to save the company.

March 05, 2004|By Bill Atkinson | Bill Atkinson,SUN STAFF

George J. Mitchell, the former U.S. senator from Maine, has thrust himself into some of the most politically untenable situations imaginable.

He spent nearly two years listening to feuding factions in Northern Ireland, and prevailed in brokering the peace agreement known as the Good Friday accord in 1998. In 2000, he headed President Bill Clinton's fact-finding committee that launched the Middle East peace process.

Now, the man known for his integrity, patience, resolve and judgment is once again in the middle of a storm. This time he is trying to save the Walt Disney Co., loved around the world for Mickey Mouse, the ambassador of childhood innocence. Disney is under attack from angry shareholders and threatened with a hostile takeover by Comcast Corp., the country's largest cable operator.

Oddly enough, the man who has prevailed over sectarian hatreds now finds himself the target of unaccustomed criticism and may soon realize that corporate politics is even more treacherous than the bitterest international fight.

On Wednesday, after a raucous and unprecedented annual meeting in Philadelphia, Disney's board unanimously named Mitchell as the chairman of the company, stripping Chief Executive Officer Michael D. Eisner of the position.

The move came at the end of a frenzied day in which stockholders of 43 percent of Walt Disney Co. withheld their votes at the company's annual meeting, opposing Eisner's re-election as chairman.

Never before in American corporate history has a successful company experienced such a powerful revolt among shareholders.

Although Eisner, who ran the company single-handedly for the past 20 years, will continue as chief executive, he will report to Mitchell and to the board.

Not everyone is pleased with Mitchell's appointment. He has been on the board of directors since 1995, and critics say his ties to Eisner are perhaps too tight for the task before him. They want a chairman who will confront Eisner and prevent him from running roughshod over the board. They don't want someone Eisner will dominate.

They also criticize Mitchell for receiving consulting frees from the company. And, they say, Mitchell was chairman of a law firm that Disney paid more than $2 million for legal services.

"His hands are not clean," says Cynthia Richson, corporate governance officer at the Ohio Public Employees Retirement System, a large owner of Disney stock. "We think he's a wonderful diplomat and a wonderful former senator, but we are talking about business expertise and ties to Mr. Eisner ... and we are talking about at least the appearance of impaired independence."

`The best guy?'

Shareholders expressed a similar sentiment at the annual meeting when 24 percent of holders withheld their vote for Mitchell as a director.

"The question becomes: Have you really got the best guy ... as chairman of the board?" asks Lynn E. Turner, director of research at Glass, Lewis & Co., a San Francisco-based independent proxy adviser and the former chief accountant of the Securities and Exchange Commission. "Given the track record at Disney, given the obvious inherent conflict of interest ... how could anyone think he could be a real independent chairman of the board?"

No two people are more upset with Mitchell's appointment than Roy E. Disney and his partner, Stanley P. Gold. The two resigned from Disney's board three months ago and single-handedly whipped up shareholders to withhold their votes in opposition to Eisner, Mitchell and two other directors.

Yesterday, they attacked Mitchell's promotion.

"His selection as chairman is a terrible choice by this board," Gold said in a statement. "Mr. Mitchell has a checkered history as a corporate director and lacks the business acumen, independence and credibility to serve as chairman of the Walt Disney Co."

Aside from occasional political sniping, such attacks on Mitchell are unprecedented. Most people like and respect him. An Irish writer, Deaglan de Breadun, lamented that the "biggest difficulty in researching an article about George Mitchell is finding anyone with a bad word to say about the guy."

Mitchell, 70, has been called a "miracle worker" and compared with major American statesmen, such as former Senate majority leader Mike Mansfield, who was solicited by presidents from both parties for his counsel. He was knighted by the queen of England in 1998 for brokering the peace treaty in Northern Ireland and nominated for the Nobel Peace Prize.

"Senator Mitchell's role was indispensable to the success of the negotiation process and to the securing of the Good Friday agreement," Gerry Adams, the leader of Sinn Fein, once said. "There can be no doubt that without his patience and stamina the outcome could have been very much different."

An excellent reputation

His reputation and his expertise are so widely respected that Major League Baseball considered him a likely candidate to become commissioner and solve the game's seemingly intractable problems.

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