Mixed Reaction to Disney Proxy

Published January 10, 2005

By C. W. Oberleitner

Reaction to information contained in the Walt Disney Company's 2005 proxy statement, filed last Thursday with the Securities and Exchange Commission, was swift in coming, almost as swift as the date for this year's Disney shareholders' meeting. Analysts and individual shareholders alike were caught more than a little off guard by what, at first glance, appears to be a short dating of the meeting by Disney.

The Same, Only Different

Last Thursday, January 6, the Walt Disney Company filed a proxy statement for its 2005 shareholders' meeting with the Securities and Exchange Commission (SEC). The statement included an announcement of the date and time for this year's meeting. The meeting is to be held February 11 at the Minneapolis Convention Center in Minneapolis, Minnesota.

The announcement, coming as it did just 35 days prior to the meeting, caught the few sharp-eyed observers and Disney shareholders who saw or heard about it off guard.

"What are they trying to pull?" asked one entertainment industry executive, who asked not to be identified. "They must be trying to hide something," said another industry analyst.

The initial reaction to Disney's announcement of the meeting date was generally one of surprise and shock at the seemingly "unprecedented" short period of time between the announcement and the date of the meeting.

"The time between this year's announcement and the meeting date is exactly the same as last year's," a Disney Company spokesman said. And, indeed, he was technically correct.

On January 27 of last year, Disney filed their proxy statement for their 2004 annual shareholder's meeting. The time and place for last year's meeting was March 3, in Philadelphia. The time between the filing date of that proxy statement and the 2004 annual shareholders' meeting was also 35 days.

One year ago, however, in a press release dated January 6, 2004 entitled

DISNEY BOARD OF DIRECTORS ENHANCES GOVERNANCE GUIDELINES, PERFORMS ANNUAL INDEPENDENCE REVIEW

Disney included a mention of the date and location for the 2004 shareholders meeting.

The media immediately picked up information contained in the press release, along with the announcement of the March 3 shareholders' meeting in Philadelphia, thereby giving shareholders and interested parties an additional 21 days, for a total of 56 days, to prepare and make plans for attending last year's meeting.

Prior to filing this year's proxy statement with the SEC on January 6, the Disney Company offered no statements regarding the time and place for the 2005 annual meeting. As of press time, there have been no media releases from Disney regarding this year's shareholders' meeting either.

Cold Turkey

THE COLD WAS bone-chilling in the Pond ice rink in Anaheim. This was the home turf of Disney's hockey team, the Mighty Ducks. But on February 25, 1997, more than ten thousand shareholders gathered here for Disney's annual meeting. No one expected the normally cheerful mood to prevail…

[Excerpted from The Keys to the Kingdom, by Kim Masters, published by Harper Collins.]

The Disney Company seems to favor the cold for its annual meetings. Their 2003 annual meeting was held during a March snowstorm in Denver, Colorado that forced many shareholders to cancel plans to attend the meeting. In 2002, a blizzard in Hartford, Connecticut led to what one observer called "the lowest attendance I've ever seen at a shareholder's meeting of any kind."

Last year, things were a bit different. The annual shareholders' meeting was held in Philadelphia, Pennsylvania on March 3, during a week of unseasonably warm weather. The daily average temperature the week of the meeting was seventy-four degrees.

It's not known if it was the warm weather or the campaign waged by former Disney directors Roy Disney and Stanley Gold to persuade shareholders to withhold votes from then Chairman and CEO Michael Eisner and several other board members, but more than 3,500 shareholders, guests, and media attended the 2004 annual meeting.

Regarding the Disney Company's pattern of scheduling its annual shareholders meetings in cities not known for their hospitable winter climates, one freelance journalist who regularly covers Disney events said, "It's enough to make you think they don't want people to show up at these things."

The 1997 annual meeting was also the last year the Walt Disney Company would hold an annual shareholders meeting anywhere near its Southern California corporate headquarters.

Regarding this year's choice of Minneapolis for a February 11, annual shareholders meeting a Disney spokesman had this to say: "We continue to pursue a policy of holding our annual meetings in cities where we have large concentrations of shareholders." He went on to point out that there are over 8,000 shareholders with over 25 million shares of Disney stock living in and around Minneapolis.

"It's one of the easiest cities in the country to get in and out of at this time of year," he said. "Minneapolis never shuts down in the winter. They must have one snow plow for every person living there."

Minneapolis is also home to the largest concentration of Disney-owned radio stations in the country. According to this Disney Company spokesman, "There are six Disney radio stations in the Minneapolis, Saint Paul area."

Voting by the Numbers or the Mouse

In addition to filing their 2005 proxy statement with the SEC, process and delivery of the more than 2.4 million 2005 Walt Disney Company annual report and proxy statement packages also began on January 6. According to Disney, it will take the company hired to distribute these packages between seven to ten days to get them all out. This will provide shareholders unable to attend the meeting in Minneapolis with 28 to 25 days to read their materials, make their selections, mark their proxy cards, and return them to the company.

If you are a registered shareholder (that is, if you hold your stock in certificate form or participate in the Walt Disney Investment Plan or Employee Stock Purchase Program), you can vote by telephone or electronically through the Internet. You will still have to wait until you receive your proxy card to receive instructions on how to do this.

If your shares are held in "street name" (that is, through a broker or other nominee), you will also have to wait until you have received your proxy card, or you can contact your broker or nominee to determine whether you will be able to vote by telephone or electronically. The deadline for voting by telephone or electronically is 11:59 p.m., Eastern Standard Time, on February 10, 2005.

Even after you have submitted your proxy, you can revoke or change your vote at any time before the proxy is exercised by filing with the Corporate Secretary of the Company by either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will be suspended if you attend the meeting in person and so request a proxy suspension, although attendance at the meeting will not by itself revoke a previously granted proxy.

Past and present Disney employees enrolled in company investment plans can provide voting instructions to Fidelity Management Trust Company by completing and returning the proxy card accompanying their proxy statements. The trustee will vote their shares in accordance with their duly executed instructions if received by February 9, 2005.

For More Information

Anyone may download PDF copies of the 2005 Walt Disney Company Annual Report and Proxy Statement from the Disney.com website. Either Adobe Acrobat Reader or Mac OS X Preview is required to read these documents. This version of the proxy statement is for reference only and does not include the proxy card required for voting.

Walt Disney Company shareholders of record can contact the company by mail at the following addresses:

MAILING ADDRESS

Disney Shareholder Services
PO Box 11447
Burbank, CA 91510-1447

STREET ADDRESS

Disney Shareholder Services
611 N. Brand Blvd. Suite 6100
Glendale, CA 91203

To contact Disney Shareholder Services by phone, dial 818 553-7200. If you would like to speak to a Shareholder Services Representative, press the star key (*) at anytime during the recorded messages. Representatives are available Monday - Friday, 7:30 a.m. - 4:30 p.m. PST, excluding observed holidays.

The phones at Disney Shareholder Services are busiest at the beginning of the week and during the morning hours between 7:30 - 11:00 AM. Disney Shareholder Services suggests that callers phone during their least busy hours, which are in the later afternoon and later in the week.

this business of show

The Walt Disney Company 2005 Annual Report.

Walt Disney Company corporate headquarters in Burbank, California.