WALT DISNEY CO. Eisner gets bonus despite criticism

Disney's CEO got a $5 million bonus for preparing a comeback.
LOS ANGELES -- Despite enduring the harshest criticism ever of his leadership, Walt Disney Co. Chief Executive Michael Eisner got something he didn't get a year earlier: a bonus.
Disney's proxy statement released Tuesday showed Eisner received a $5 million stock bonus for Disney's fiscal year ended Sept. 30 -- on top of his $1 million annual salary -- even though Disney's stock has languished and the company's profits were hurt by the sluggish theme park business and problems at its ABC network.
"It wasn't a great year for him," said executive compensation expert Graef Crystal, who once consulted Disney on Eisner's pay. "My own taste would have been to give him zero."
Here's why
According to the proxy, Disney's compensation committee rewarded Eisner for leading the company "in a difficult economic environment that challenged all of the company's major businesses" and laying the groundwork for a comeback. That, the document says, includes developing a new theme park strategy, cost controls in such areas as the company's film unit and expanding Disney's international business.
It was Eisner's decision to take the bonus in stock, according to the document. Eisner received 298,775 shares at Disney's closing price of $16.735 a share on Monday. According to the proxy, the shares vest at the end of Eisner's contract, which runs through 2006. He did not receive stock option grants during the year.
A spokeswoman for the Burbank-based company declined to comment except to say the proxy statement spoke for itself.
No great shakes
But Crystal said that though Disney's stock outperformed the Standard and Poor's 500 for one of the few times in the past decade (a decline of 17.9 percent compared with a drop of 20.5 percent) "that's hardly the occasion for dancing in the streets of Burbank."
Disney's last fiscal year was one of the bleakest the company has endured in a decade, mainly because of the steep falloff in tourism and weak ratings at its ABC television network. The company's stock price has lagged, and its credit rating was downgraded. Operating income fell 33 percent to $2.8 billion.
Shareholders, board criticize
Eisner also came under intense criticism from shareholders and even members of his board of directors, notably Vice Chairman Roy Disney and his chief lieutenant, Stanley Gold. Sources said that Gold and Roy Disney have voiced internally their unhappiness at the bonus. Both men declined to comment Tuesday.
Separately, Disney President Robert Iger received a $3 million cash bonus, a $1 million stock bonus and 1.75 million stock options.

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