Disney Shareholders Protest Exclusion of Resolution

Press Release
For Immediate Release - February 18, 2000
Contact:Betsy Leondar-Wright
Phone: (617) 423-2148 x13

Disney Shareholders Protest Exclusion of Resolution

Company urged to make all employees shareholders

Disney shareholders will not be allowed to vote on a shareholder resolution calling on the company to establish a universal employee ownership plan and fund it annually with an equivalent number of shares as are given to the company's top officers.

After the resolution was filed, Disney petitioned the Securities and Exchange Commission that it dealt with "ordinary business." The SEC ruled that Disney could exclude the resolution from their proxy statement. Disney shareholders will not have the opportunity to vote on it at the February 22 annual shareholder meeting in Chicago.

Michele McGeoy, Disney shareholder and member of Responsible Wealth, will attend the meeting along with other shareholders' representatives to challenge CEO Michael Eisner on his decision to exclude the resolution. Meanwhile, protesters outside wearing Mickey Mouse ears will distribute an illustrated storybook describing the problems of concentrated wealth and the benefits of broad-based employee stock ownership.

McGeoy, one of five members of Responsible Wealth, a project of United for a Fair Economy, who filed the shareholder resolution believes that all of Disney's employees should benefit from the security of stock ownership and share in the wealth created by the company.

Disney did not award a bonus to its CEO, Michael Eisner, this year because the company failed to meet net income targets. Luckily for him, Eisner could exercise almost $50 million in stock options awarded in previous years to supplement his $750,000 base salary. Hourly Disney workers have no such options.

In 1998, Eisner was the highest paid employee in America, receiving $575 million, and he has exercised stock options that have netted him more than $1 billion since 1992. If only half of Eisner's options had been distributed evenly among Disney's worldwide employees, each of them would have received $4,200, while still leaving Eisner with $500 million.

Companies with broad-based ownership increase their revenues 8 to 11 percent faster than similar firms without broad-based ownership. They also generated stock price returns 40 percent higher than broad market indices between 1992 and 1997, according to the National Center for Employee Ownership.

"Employee ownership is a business strategy that works. There is no better way to increase success than to give employees a stake in what they build and run," said McGeoy, CEO of RH Solutions, a California software company. "Shared ownership makes sense for the company, the employees, the customers and the economy. Everybody wins." McGeoy has made a commitment ensuring that her employees eventually own a majority of the company.

Responsible Wealth members have filed similar resolutions at American Home Products, Citigroup, and MBNA calling on the companies to report on employee ownership and to limit CEO pay. The resolutions are part Responsible Wealth's campaign to make corporations more responsive to workers' and communities' needs.

United for a Fair Economy is a national nonprofit organization that spotlights growing economic inequality and advocates shared prosperity.

Responsible Wealth, a UFE project, is a growing network of over 400 businesspeople, investors and affluent individuals in the top 5 percent of income and wealth working to reverse the trend of growing economic inequality.