LOS ANGELES – Walt Disney Co. chief executive Michael Eisner, who successfully fought off a shareholder attempt to oust him, has unexpectedly offered his resignation from the entertainment company he has led for two decades. But he will go in his own time.
In a letter to Disney’s board dated Thursday, Eisner, who helped transform the company into a media powerhouse whose performance has lagged in recent years, said he intends to step down when his contract expires on Sept. 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,” Eisner wrote.
The timing of the announcement came as a surprise to investors and many of the company’s top executives. It set off a guessing game about possible successors and raised questions about whether the move will silence his critics.
Eisner, 62, did not say whether he would seek to retain his board seat.
Disney’s chairman, former Sen. George Mitchell, said the board would continue its ongoing process to identify a successor “even as Michael continues to lead the company to achieve its goals.”
Critics called for Eisner to step down sooner and resign his seat on the board as well.
“It is not clear to us how a two-year lame duck CEO will benefit share owners, and his continued presence on the board would prevent the company from the clean break that is needed to restore investor confidence,” Sean Hannigan, president of the California Public Employees Retirement System, the nation’s largest pension fund and a Disney investor, said in a statement.
Eisner has strongly endorsed Disney President Robert Iger as a potential successor. But the board could look to other executives within the company or even former Disney executives who now lead their own companies.
Iger is well respected, but his fate is seen as tied to that of the ABC Television network, which he has vowed to return to profitability. ABC sank to fourth place among the major networks in recent years and continues to struggle.
“For better or worse, whatever happens at ABC will have an important effect on how he is perceived by investors and the board,” said Harold Vogel of Vogel Capital Management.
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