updated 3/23/2004 8:48:00 AM ET 2004-03-23T13:48:00

Six of the country's largest and most influential public pension funds on Monday requested a meeting with directors of The Walt Disney Co. to discuss performance and governance concerns.

The investors, including the California Public Employees' Retirement System (CalPERS), the nation's largest pension fund, sent a letter to Disney Chairman George Mitchell requesting an immediate meeting.

"We remain deeply concerned that our investments and the future of this company are in jeopardy," the letter said. "In our view, such a meeting would send a necessary signal to the marketplace that the Disney board is willing to engage in a constructive dialogue regarding our mutual interests as fiduciaries and shareowner representatives."

Mitchell, the former U.S. senator from Maine, and board member Judith Estrin have offered over the past few weeks to meet with pension funds to discuss their concerns.

"We look forward to hearing your questions and to sharing with you details on the performance of The Walt Disney Company," Mitchell wrote in a letter sent Monday to the pension funds, offering to meet. "We remain confident in the company's strategic positioning and future growth potential."

The funds say the future of Disney's chief executive, Michael Eisner, is not on their agenda for the meeting.

In a separate statement, New York State Treasurer Alan Hevesi, representing the New York State Common Retirement Fund, said the group had dropped its demand that Eisner be fired.

"We have explicitly agreed to give the company some time to improve its performance and not to ask for Eisner to be replaced at this time," Hevesi said.

But CalPERS, which organized the letter on behalf of the funds, said it stands by its earlier call for Eisner to leave, although it would not press the issue at a meeting with the board.

"We believe this is a dire situation," CalPERS spokesman Brad Pacheco said. "Putting Eisner aside, we want to meet face to face to talk about it."

CalPERS called for Eisner's resignation by the end of the year following a March 3 Disney shareholder's meeting at which investors withheld 43 percent of votes cast for Eisner's re-election to the board.

Immediately following that meeting, Disney's board split the roles of chairman and chief executive — one of the key issues pressed by CalPERS and other institutional investors.

The other funds asking for a meeting, with combined assets of more than $500 billion, include the Connecticut Retirement Plans and Trust Funds, the California State Teachers' Retirement System, the Ohio Public Employees Retirement System and the North Carolina Retirement Systems.

Shares of Disney have risen steadily over the past year as the company's financial performance has improved. Disney reported stronger-than-expected first quarter growth on higher attendance at its theme parks and a rise in revenue at its movie studio.

But investors say they are concerned about the longer-term performance of the stock.

"The company has lost more than 20 percent in stock value over the last five years — nearly five times more than the losses incurred by the Standard & Poor's 500 index for the comparable period," the six pension funds said in their joint statement.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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