You know things in the Magic Kingdom have changed when Walt Disney's (DIS) chief executive is delayed on his way into the annual meeting by a shareholder planting a big, wet kiss on his cheek. Of course, this is Bob Iger—not Michael You-Know-Who.
Let's face it: In the last few years before Iger took over, Eisner would have been smart to have his security guards check shareholders for tomatoes on their way to their seats. This time around, the lovefest—held Mar. 8—started for Iger when perpetual gadfly Evelyn Davis, 75, who dogs most of the higher-profile CEOs at their annual meetings, insisted on posing for pictures with the Disney head guy and bussed his left cheek.
The fact that Iger agreed to the messy show of affection—although he rightfully grimaced through it—says a lot about the new spirit at Disney. This is the Disney that wants to be nice, compliant, even beloved by shareholders. Not that that's a bad thing, but rarely has a company tried so hard to be so low-key at its big shareholder show of the year. Start with the fact that Disney executives held their meeting in New Orleans—a wonderful demonstration of support for the city recovering from Katrina, but one heck of way to minimize press coverage. (There were two other national reporters there.)
Times Have Changed
Heck, even Steve Jobs didn't see fit to attend what would have been his first annual meeting since the company spent $7.5 billion to buy Pixar from him. Jobs, who owns 6.7% of Disney's stock, was apparently too busy to hop on Apple One and head to the Big Easy. As for Disney's big announcement? A hot new animated film to be released in 2009 and set in New Orleans. Yawn.
What a contrast to the Eisner era, when annual meetings were moved around the country only when shareholders started getting restless and were filled with off-the-cuff comments from the CEO that usually made tons of news. At various times, Eisner mused about starting an Internet portal, launching a cable news channel to compete with CNN (TWX), and sized up the competition from animation startups like DreamWorks (DWA), launched by former Disney studio chief Jeffrey Katzenberg.
Of course, the most memorable news toward the end of Eisner's tenure was the bad kind: being met with stony silence from shareholders, the noisy rally calling for his head, and nasty questions about the pay package of former executives. A kiss from a shareholder? In Eisner's dreams.
Animated Face Time
Indeed, the last vestiges of the Eisner era are now gone. At this year's meeting, Reverend Leo O'Donovan, a 12-year board veteran, retired, eliminating the last board member with a personal Eisner connection (O'Donovan was president of Georgetown University, where the former CEO's kids went to college). And while Eisner always seemed to dominate the meeting, Iger seemed to delight in turning center stage over to someone else. Among the scheduled speakers, it was John Lasseter, the former Pixar guru who is Disney's chief creative executive and head of its fabled animation unit, who got the most face time with the audience.
All of these changes are great for the company. Times have changed since a single guy— and that would be Walt himself—could lord over a company like Disney, which last year had $34.3 billion in revenues and net income of $3.4 billion. Iger is aware that Lasseter knows more about animation than he does, as he is well-aware that the folks who grease up the rides at Disneyland know more about the theme park business than he could ever learn. It is the mark of a good corporate executive to understand exactly what he knows and what he doesn't, and he isn't afraid to stay out of the spotlight.
So give Iger some credit for learning his lesson well at what he calls "The Tom Murphy School of Management." Murphy is the fabled former chairman of CapCities/ABC, who elevated Iger at that company and is renowned as a guy who knew how to hire good people, give them some freedom, and let them perform.
Loose Cannon in the Big Easy
Ego wasn't in Murphy's vocabulary, and apparently it isn't in Iger's, either. And so far, at least, the Iger approach is working. The company last year saw earnings per share jump 34%, and its stock has returned 29.5% to its shareholders (that includes a hefty dividend on top of its 21% increase in share price), per Disney Chief Financial Officer Tom Staggs. That figure compares well to the 10.8% gain for the Standard & Poor's 500-stock index overall.
Of course, we all know that where Disney is concerned, the tide can turn oh so quickly. A nasty stretch of box-office bombs, a Pixar pic that disappoints Wall Street, or the all-but-inevitable decline in ABC's prime-time ratings—and nobody's going to be throwing kisses Iger's way. Indeed, even amid the lovefest in New Orleans, there was some discord to be heard.
The meeting ran long, complained one shareholder in the audience. "We don't need a lesson in animation," she barked half-through Lasseter's presentation. The disgruntled audience member? None other than gadfly Davis, who two hours earlier had rushed to plant that wet one on the CEO's cheek.