LOS ANGELES, April 4 - When the board of the Walt Disney Company convenes for a two-day corporate retreat at Disneyland later this month, directors are expected to debate how powerful they should become in light of the recent shareholder revolt that led to Michael D. Eisner losing his chairman's title.
Some board members, including Judith L. Estrin, remain unwaveringly loyal to Mr. Eisner, who retains his post as chief executive, and are betting that a projected turnaround in the company's fortunes will prove that the push to oust him was poorly conceived, according to several people who have talked to the directors. Other board members, including Robert W. Matschullat and Gary L. Wilson, want the newly appointed chairman, George J. Mitchell, to expand that office and take a more activist role in defining Disney's priorities and strategic vision.
Depending on which viewpoint prevails, it could affect not only how much of a hand Mr. Eisner, 62, has in naming his successor but also whether he leaves before his contract ends in 2006, these people say. What has emerged is a board forced to take action because shareholders are demanding it, these people say, but one that has yet to decide how much power should be wrested from Mr. Eisner as the positions of chief executive and chairman are split.
"There are different views about how powerful they should become," said one person who has talked to several directors but insisted upon not being identified. "What Michael is going to see is a new world in action."
Disney's critics and supporters agree that the board has to restore investor confidence after an overwhelming 43 percent no-confidence vote from shareholders in March for Mr. Eisner, who has reigned at Disney nearly 20 years. Mr. Mitchell was named chairman despite his own no-confidence vote and has said the board would be more involved in corporate strategy. But he has also told friends and colleagues that he does not want to remain chairman for long. Mr. Mitchell, the former United States senator, was reluctant to accept the job.
Mr. Eisner declined through a spokeswoman to be interviewed regarding the board. And several Disney directors - including Ms. Estrin, Mr. Matschullat, Mr. Mitchell and Mr. Wilson - either did not return calls or declined to be interviewed.
But Ms. Estrin and company will be crucial in the discussion about what to do about Mr. Eisner and a successor. According to two people who have talked to board members, directors are expected to discuss several possibilities, though it is unlikely they will make a decision then.
One option could be to bring in a new president to succeed Robert A. Iger (if they do not agree to give him the top spot) to be groomed as chief executive. The board could also consider whether Mr. Eisner should leave in September 2006 when his contract ends and announce his resignation this year so the search for a successor can begin. Or the board could do nothing, hoping a turnaround will assuage shareholders. According to the two people, the board has not yet discussed these options.
Ms. Estrin, the chief executive of Packet Design who joined the board in 1998, is among those who are most friendly toward management, say people who know her, and is outspoken on Mr. Eisner's behalf. Stanley P. Gold, the dissident former board member who sought Mr. Eisner's ouster, said in a recent interview that Ms. Estrin, along with a fellow director, Monica P. Lozano, was against splitting the jobs of chief executive and chairman when the idea came up last year. And her brusque defense of Mr. Eisner rubbed some Disney executives and board members the wrong way, he said.
Two people close to the company said that Ms. Estrin was perceived as not being critical enough of Mr. Eisner, blaming his problems on perception, not performance. Ms. Estrin did not return calls seeking comment; she said at the Council of Institutional Investors meeting last month that the perception that the board was controlled by Mr. Eisner was "just plain wrong."
While Ms. Estrin has taken a more pro-Eisner approach, other directors want to give more power to Mr. Mitchell and the chairman's office. The board's personal loyalty to Mr. Eisner is shifting, analysts say; three new independent directors have been appointed in the last two years and none are personal friends of Mr. Eisner. Disney directors are also being singled out by disgruntled shareholders and could face even more trouble in next year's board election.
Two directors - Mr. Matschullat, the former chief financial officer at Seagram and the current chairman of the Clorox Company, and Mr. Wilson, a former chief financial officer of Disney who is chairman of Northwest Airlines - want to greatly expand the chairman's responsibilities, said the people who have talked to the directors.
Both men have significant business experience and are said to be pragmatic in their approach to Disney's problems. Mr. Wilson led the buyout of Northwest Airlines in the late 1980's and has been on the board for 18 years.
But his relationship with Mr. Eisner is complicated, say people who know them both. Mr. Gold said that while Mr. Wilson has long supported his former boss, he also wanted Mr. Eisner to give up the chairmanship last year. At the board meeting in Philadelphia after Disney's annual meeting on March 3, Mr. Wilson, along with Mr. Matschullat, was mentioned as a potential candidate for the chairman's job.
Mr. Matschullat, a no-nonsense former mergers and acquisition banker who has spent his career in boardrooms, has been a director for 15 months. He, like Ms. Estrin, has been meeting with institutional investors since Roy E. Disney, the nephew of Walt Disney, quit the board and began his campaign to oust Mr. Eisner. Mr. Matschullat attended Disney's investor conference in Orlando in February, huddling first with Mr. Eisner after Comcast made its $54 billion hostile offer for Disney and later chatting up analysts at cocktail parties.
According to one person close to the board, Mr. Matschullat, like Mr. Mitchell, could prove a persuasive force in any board vote because some directors like his direct, analytical approach.
"He is straightforward and totally understands the dynamics of the board," Christopher Dixon, an independent media analyst, said.
Any transition of power away from Mr. Eisner will probably be uncomfortable. But with the Comcast bid still looming and critics agitating for Mr. Eisner's ouster, analysts say the board will have to act. And if there was any question whether Mr. Disney would stop his campaign, he is not. Recently, Mr. Disney offered to share information with disgruntled state pension funds in a continuing bid to remove Mr. Eisner.
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