Press Release
For Immediate Release – March 1, 2001
Contact: Betsy Leondar-Wright,
(617) 423-2148 x13

Shareholders Ask Disney to Spread the Wealth

Company urged to limit shares for top officers

At the Disney shareholder meeting on Tuesday, March 6, in Fort Worth, Texas, shareholders will vote on a resolution calling on the company to limit the number of stock options the company may grant to executive officers.

Michele McGeoy, Disney shareholder and member of Responsible Wealth, will attend the meeting to present the resolution. It would limit any executive to no more than 5% of the total options granted in a given year, and the executive officers as a group to no more than 10% of total options. Disney was singled out for this resolution because of the company's practice of concentrating large numbers of stock options in the hands of a few executives. Last year, Disney's top five officers (representing 0.004% of Disney's workforce) controlled 18.6% of outstanding options.

The company argues that such large stock option grants provide the incentive for executives to perform well. While Disney's compensation policies have led to CEO Michael Eisner becoming one of the highest paid CEOs of all time, in recent years the company has delivered only a mediocre performance to shareholders. In 1996, Eisner received a grant of 24 million stock options. Since then, in the four fiscal years ending September 30, 2000, Disney stock significantly trailed both the broader stock market and its industry peers. In that time, Disney's stock rose just 85.6%, compared to a 255.2% return for its self-designated peer group, listed in the company's proxy statement. The S&P 500 Index rose 130.8% over the same period.

"We believe that stock options do provide a powerful incentive, one that should be extended to all employees," McGeoy stated, pointing to such leading companies as Bristol-Myers Squibb, Citigroup, and Microsoft where all employees are owners. "We believe Disney has failed to deliver the superior performance promised by its generous stock option plan. It is time for a change."

In another vote at the annual meeting, shareholders will consider a new stock option plan that limits any individual to 30 million options over five-years. This represents more than 10% of the total options available.

Business Week has criticized the generosity of executive compensation at Disney. "With three-year pay of $636.9 million, the Disney chief is dead last in shareholder return vs. return to the corner office," the magazine reported in its annual executive pay issue last April.

When questioned by Ms. McGeoy at last year's annual meeting, Mr. Eisner stated he did not support granting stock incentives to parking lot attendants and other front-line workers. Ms. McGeoy followed up on that meeting by nominating two individuals to Disney's Board of Directors: Corey Rosen, Founder and Director of the National Center on Employee Ownership and Jeff Gates, former chief counsel of the Senate Labor Committee and author of The Ownership Solution. Though Disney added directors in 2000, they did not contact Mr. Gates or Mr. Rosen.

In addition to the resolution at Walt Disney, Responsible Wealth members have introduced resolutions on executive pay issues at 11 other firms, including Exxon Mobil, AT&T and Raytheon. A complete list of resolutions can be found at Responsible Wealth's website: www.responsiblewealth.org.

Responsible Wealth is a growing network of over 450 businesspeople, investors and affluent individuals in the top 5 percent of income and wealth working to reverse the trend towards economic inequality. It is affiliated with United for a Fair Economy, a national nonprofit organization that spotlights the growing wealth gap and advocates shared prosperity.