More Angry Words Lobbed at Disney CEO

Roy E. Disney’s war of words escalated Wednesday as he took his blistering campaign against Walt Disney Co. Chief Executive Michael Eisner to the company’s troops.

Disney fired off an e-mail to about 200 executives, friends and colleagues at the Burbank-based company, expressing sadness at leaving the institution his father, Roy O. Disney, co-founded with Walt Disney.

The 73-year-old this week rocked the board by resigning his seat and his post as vice chairman, saying Eisner effectively was forcing him out for voicing dissent and criticizing the company’s performance. He said Eisner was doing so under the guise of a newly enforced rule requiring directors to retire at age 72.

In the letter, he gave Eisner credit for leading a remarkable turnaround in the 1980s and early ‘90s but accused him of stifling the creative energy that was once a Disney mainstay.

“Michael Eisner has lost sight of the vision upon which the company was founded,” Disney wrote. “The focus has shifted to the chase for the quick buck instead of a dedication to new and high-quality ideas.”

The company declined to comment on the letter. In statements this week, the board dismissed claims made by Disney and his lieutenant, Stanley Gold, who also resigned. The board said the men were doing “a disservice to shareholders” by failing to recognize the company’s improved performance.

Disney’s e-mail was sent to friends and colleagues including executives in the feature animation and theme park divisions and Walt Disney Imagineering research and design group.

With a request to “please share this with your fellow cast members if you would like,” the letter spread like wildfire throughout the company and was warmly received by many.

“Like Roy himself, it was heartfelt,” said one executive who received the e-mail. “There’s strong sympathy for him.”

Some employees, however, were less enthusiastic about Disney’s letter, saying the feud will only hurt the company’s stock price and their own 401(k)s.

“I respect Roy, but as an employee, this public battle is doing us no good,” said Kathy Clark, vice president of corporate credit and collections.

So far, most investors and analysts have shrugged off the resignations, citing the company’s improved outlook. But one analyst, Jessica Reif Cohen of Merrill Lynch, called the boardroom developments “shocking” and “unsettling.”

“One potential investor concern ... following the departure of two such outspoken individuals is that the board could evolve into a greater ‘rubber stamp for entrenched management,’ ” she wrote in a research note.

Disney shares fell 73 cents to $21.85 on the New York Stock Exchange.

In his letter Wednesday, Disney said Eisner had been making it impossible for Disney to do his job. As an example, Disney said he had been barred from attending a department screening of three animation projects.

Disney indicated he wasn’t going quietly. “Although this is not how and when I would have liked to leave the Disney Company, I assure you that I view it not as an isolated and sad event, but as part of the process,” he wrote. “I hope it is not too late for the Disney board of directors to finally recognize that fundamental change is needed.”

Both he and Gold said they were embarking on a campaign to educate institutional investors about the company’s shortcomings with the ultimate goal of removing Eisner.

Disney and Gold have stopped short of saying they will wage a proxy fight. Disney is one of the company’s largest individual shareholders, but he and his family don’t own enough stock to mount a challenge to Eisner.