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. Last Updated: 07/27/2016

Pressure on Disney's Eisner Mounts

NEW YORK -- Two former directors of the Walt Disney Co., including a nephew of the company's founder, aggressively pursued their campaign to oust Michael Eisner, Disney's chairman and chief executive, and three other directors.

The action occurred as the annual shareholders meeting is set to take place Wednesday in Philadelphia.

The two former directors, Roy Disney and Stanley Gold, in a letter to Disney shareholders, reiterated their call for votes to remove Eisner and cited a growing list of public and private investors who have said publicly that they do not intend to support him.

The Ohio Public Employees Retirement System, the nation's 10th-largest state pension system, on Monday joined the list, saying it would withhold its votes for Eisner at Disney's annual meeting. The Ohio retirement system owns 4.7 million shares of Disney stock valued at more than $125 million. It has assets of $58.7 billion.

On Friday, Ohio's state teachers' retirement fund said it would send a "no-confidence" message by withholding its vote at the shareholders meeting. The teachers' fund has 3.9 million Disney shares. The Walt Disney Co. has about 2 billion shares outstanding.

The list of those who do not support Eisner also includes the California Public Employee Retirement System, the nation's largest public pension fund, as well as those from New York state, North Carolina, New Jersey and Connecticut. T. Rowe Price, the big mutual fund company, has also said it would withhold its support for Eisner.

In their letter, Roy Disney and Gold, who resigned from the board last fall, urged shareholders who had not yet cast their ballots to do so, or to change a vote that has already been made, as is allowed.

"We believe that the record of the Walt Disney Co. over the last eight years speaks for itself," the letter said. "Shareholders are entitled to better management. Michael Eisner has failed to deliver for all Disney shareholders over this long period."

The Disney Co. has acknowledged that as many as 30 percent of its shareholders may withhold their support for Eisner.

The company has stood behind Eisner. In a statement issued Monday, Zenia Mucha, a company spokeswoman, noted that Disney's stock had increased 60 percent in the last year. "Disney is a well-managed company with world-class governance," her statement said.

It is unclear how shareholder sentiment would influence the thinking of the Comcast Corp. Last month Comcast stunned Disney and the entertainment industry when it made an unsolicited $54 billion bid to take over Disney. Eisner and Disney's board rejected that bid, saying it was too low.

Analysts said a big negative vote by Disney shareholders could conceivably encourage Comcast to sweeten its offer to buy the company. But Brian Roberts, Comcast's chief executive, has said he has no intention of raising his bid.

"Based on what we understand of the Comcast offer, we think Disney made the right decision to turn them down," said Cynthia Richson, corporate governance officer at the Ohio Public Employees Retirement System.

"We would like to see the jobs of chief executive and chairman split," Richson said.

"We think there should be an independent chairman. At this point in time, it is up to the board to decide if Eisner stays or goes."