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Disney Corporate's Mouse Droppings

Stanley Gold, a key ally of former Walt Disney Co. vice chairman Roy E. Disney, resigned from the media and entertainment conglomerate's board Monday, becoming the second vocal opponent of chairman and chief executive Michael Eisner to quit in two days.

Gold issued a long rebuke to Eisner and the board, seconding complaints made Sunday by Roy Disney and further criticizing the board as being a rubber stamp to senior management.

Gold also repeated Roy Disney's calls for Eisner to resign.

"It is clear to me that this board is unwilling to tackle the difficult issues I believe this company continues to face — management failures and accountability for those failures, operational deficiencies, imprudent capital allocations, the cannibalization of certain company icons for short-term gain, the enormous loss of creative talent over the last years, the absence of succession planning and the lack of strategic focus," Gold wrote.

On Sunday, Roy Disney, 73, stepped down from the board of directors and resigned as chairman of Walt Disney Animation and called on Eisner, 61, to resign.

"It is my sincere belief that it is you that should be leaving and not me," Roy Disney wrote to Eisner in a scathing letter.

Gold's resignation comes as the Disney company's board begins two days of meetings in New York.

The board is scheduled to discuss the report of its governance and nominating committee, which recommended that Roy Disney and two other directors not be renominated because they exceed the company's mandatory retirement age of 72.

Gold, 60, played a key role along with Roy Disney in 1984 to save the company from a takeover attempt and install Eisner as chairman. He heads Shamrock Holdings, which manages Roy Disney's investments.

But Gold's role has been diminished over the past two years as he has become more of a critic of Eisner's performance. Last year, the board adopted new corporate governance guidelines that removed Gold's status as an independent investor and cut his influence.

Gold blasted a statement made Sunday by another Disney board member, former Sen. George Mitchell, defending the board's decision to enforce new corporate governance guidelines.

Mitchell said in a statement Sunday that he regretted Roy Disney's actions and confirmed that the governance and nominating committee recently informed the vice chairman that the age-limit rule, instituted last year, should apply.

"It is unfortunate that the committee's judgment to apply these unanimously adopted governance rules has become an occasion to raise again criticisms of the direction of the company, and calls for change of management, that have been previously rejected by the board," Mitchell wrote.

On Monday, Gold wrote, "The real reason for the committee's action is that Roy has become more pointed and vocal in his criticism of Michael Eisner and this board. This is yet another attempt by this board to squelch dissent by hiding behind the veil of 'good governance.'"

Financial analysts said before news of Gold's resignation that Roy Disney's comments would probably not have a long-term effect on the company because they come at a time when its fortunes are on the rise.

"While Roy's complaints are, I'm sure, heartfelt and he's serious about it, he just doesn't carry as much weight as he used to in the company," said Harold Vogel of Vogel Capital Management in New York.

"This is unpleasant for everybody. But as long as the company's stock price stays up, as long as the trends are on the mend, there's no reason to believe there would be anything different."

Most analysts surveyed by Thomson First Call expect Disney to increase its earnings in 2004 by 30 percent to 86 cents per share and by another 18 percent to $1.02 per share in 2005. The company's theme parks have seen slight improvements as tourism increases and its troubled ABC Television network has seen some rise in ratings and advertising revenue.

Shares of Disney were up 8 cents to $23.17 in late afternoon trading Monday on the New York Stock Exchange.

Roy Disney is the last family member active in the company, founded in the 1920s by his uncle Walt and his father, Roy O. Disney.

In January, the board announced three other resignations in an attempt to shrink the board to a more manageable size.

One of those directors was another Eisner critic, Andrea Van de Kamp.

While the board's actions since January eliminate four directors known to be Eisner allies and add several new independent members, they also effectively rid the board of all known opposition to Eisner and his management team.

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