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The Honolulu Advertiser

Posted on: Friday, February 27, 2004

More groups to boycott vote on Disney chief

By Michael McCarthy
USA Today

The drive against Walt Disney Chairman and CEO Michael Eisner yesterday gained five state pension funds and a mutual fund that will withhold votes for his re-election at the annual meeting on Wednesday.

New York state Comptroller Alan Hevesi, chief of the nation's second-largest pension fund, called on the Disney board to replace Eisner "as soon as possible," while splitting his chairman and CEO posts.

The California Public Employees' Retirement System and California State Teachers Retirement System said earlier this week that they'll withhold their votes.

The growing anti-Eisner wave could also ratchet up pressure on the Disney board to open talks with Comcast regarding its $47 billion hostile takeover bid.

Announcements yesterday:

• Hevesi, who is in charge of the New York State Common Retirement Fund, said Eisner's "tight control over Disney decision-making" and his dual leadership role "call into question his commitment to corporate governance reforms." The fund owns 8.7 million shares at Disney.

• The Massachusetts Pension Reserves Investment Management Board, with a $32 billion fund and 1.6 million shares at Disney, is concerned about "mismanagement," according to a statement issued by state Treasurer Tim Cahill.

• The Connecticut Pension Fund, with 537,000 shares, is disturbed by the dual jobs held by Eisner. "Management should report to the board, not the other way around," spokesman Bernard Kavaler said.

• At the New Jersey Division of Investment, director Peter Langerman said he'll join the protest with 8 million shares to "send a forceful message about management and governance."

• The $38 billion Virginia Retirement System said it follows recommendations of proxy advisory firm Institutional Shareholder Services, which has urged a vote against Eisner.

• T. Rowe Price's Media & Telecommunications, with funds representing about a million shares, said it will withhold votes for the whole board.