Michael Eisner Letter, September 9, 2004
Excerpt from the Michael Eisner letter, taken from the Disney website:

LETTER DATED SEPTEMBER 9, 2004 FROM MICHAEL D. EISNER, CHIEF EXECUTIVE OFFICER OF THE WALT DISNEY COMPANY TO MEMBERS OF THE BOARD OF DIRECTORS

As we approach the end of the fiscal year and my 20th anniversary as CEO, I would like to share with you some personal observations about our Company. I have been honored and proud to be the Chief Executive Officer of this remarkable company for that length of time. Let me touch on what we have accomplished, what we have to do, and some of my personal plans.

Putting last things first, I plan to retire from my role as Chief Executive Officer of the Company upon the conclusion of the term of my employment agreement on September 30, 2006. Until then I shall continue to exert every effort to help the company achieve our goals, to assist the Board in selecting the new Chief Executive Officer, and to make the transition expeditious, efficient, and smooth and easy....

Most of you were not part of the Company as we grew and prospered, both domestically and internationally since Frank Wells and I came aboard in September 1984.

(OE comment: in other words, you don't have the wisdom to question my decisions.)

Statistics only tell part of the story, but let me throw out a few: Total number of employees - from 28,000 to 117,000; Revenues from $1.7 Billion to a projection of roughly $30 Billion for this fiscal year; Enterprise Value from $2.8 Billion to $57 Billion. This, of course, is an outgrowth of the seven new parks, 28,458 new hotel rooms, 70 new cable channels around the world, and 800 new movies we created.

Our major acquisition, CapCities/ABC, in January 1996 (whose value has gone from a net cost of $16 Billion to an estimated analyst value of $39.1 Billion-$53.3 Billion), was most important to the continued growth of our Company, in an era of consolidation of media, of production and distribution, and vast technological change.

Along the way, I have been well rewarded for my efforts and the Company's performance.

(OE comment: True.)

I have reinvested a substantial portion of those proceeds into Disney stock (14 million shares). That and my strong feelings for the Company are the incentive to make the Company even more successful and to be sure this success continues beyond my tenure as CEO....

I expect the next two years will be critical to the future of our Company and that we must take advantage of the positive projections we anticipate. The momentum has changed. But in a sense, it is harder to manage a Company in success than in failure. We now have to continue the teamwork and selflessness that marked the last couple of years. We have to maintain that spirit as the spotlight will find us more and more in the winners' circle.

It has been a fantastic Disney ride for the past twenty years. Ups and downs to be sure, but filled with great satisfaction in building this wonderful creator of classic American culture into one of the premiere entertainment oriented companies in the world. My affection for Disney will never retire. And, like our campaign, suggested by Jane in 1986 that seems to resonate for so many, I can only conclude by telling you what I am doing next. "I'm going to Disneyland!"

Needless to say, there was a ton of reaction at savedisney.com. For starters, it referenced a statement from CalPERS:

Sean Harrigan, President of the California Public Employees' Retirement System (CalPERS) issued the following statement today about the retirement of Michael Eisner, Chief Executive Officer of The Walt Disney Company:
"Eisner's resignation as CEO is the right move for shareowners. We believe he should resign from the board as well. It is not clear to us how a two-year lame duck CEO will benefit shareowners, and his continued presence on the board would prevent the company from the clean break that is needed to restore investor confidence.

On behalf of CalPERS, I want to renew our call for the Disney Board to reveal as soon as possible their CEO succession plan. Working with the coalition of public pension funds on Disney issues, we intend to closely monitor further developments and will continue to engage constructively with the Board of Disney on all the issues related to long-term performance."

The (UK) Times Online also had views on the matter:

It took a tempest to dislodge Mr Eisner as the Disney chairman. He was relieved of the position, which he had held for 20 years, in March after 43 per cent of shareholders withheld support for his re-election.

A period of quiet contemplation appears to have persuaded him of the wisdom of quitting the chief executive position, also held since 1984....His decision follows not on the heels of a shareholder rebellion, although many continue to call for his resignation, but a set of well-received results. Disney last month announced third-quarter profits up 20 per cent at $604 million, comfortably ahead of analysts' forecasts.

So the foundations, at least, have been set for a Disney-style happy ending to an Eisner reign....

If Mr Eisner can repeat in his last two years the kind of success he inspired in his early spell, when Disney's revenues jumped from $1.65 billion to $22 billion in 13 years and its market value from $2 billion to $67 billion, he will deserve a fairy tale send off. His decision also allows the company to engineer the smoothest of transitions.

Yet there are at least three strong reasons for him to go sooner. The first would be to appease the many shareholders who desire his complete exit from the Disney boardroom. Mr Eisner's 24-month walk to the door will seem inordinately long to those who wanted him to go years ago.

The second would be to reduce any fear of a loss of discipline among senior staff, who have so far remained remarkably loyal to Mr Eisner but, with the top spot up for grabs, may reassess their interests. Disney may face, as well as rebellious shareholders, spirited managers jockeying for leadership of the succession race and must ensure they compete on terms of divisional performance and not internal politics.

(OE comment: when does an executive NOT compete on terms of internal politics?)

The third would be to find out quite how Mr Eisner became the executive he did. While he has written a book on the importance of his experiences at summer cap in Vermont in the 1950s to his business thinking, publication of the tome was shelved in June. He lacked, apparently, the time to promote it.

In retirement he will have all the time in the world to explain how canoeing and campfires relate to corporate achievement, and, in particular, the rises and falls of the world's most famous media empire.