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Disney Success
-Chariman & CEO: Michael Eisner
-CEO: Frank Wells -
President -FRANK WELLS
-Wells worked at Disney from 1984-1994
-Wells died in a helicopter crash, prematurely forcing the company to consider his replacement. -
CEO- MICHAEL EISNER
-Eisner promoted the candidacy of his long time friend Michael Ovitz -
Disney Compensation Comitee
-Ovitz insisted on an employment agreement (OEA): If Disney fired Ovitz for any reason other than gross negligence or malfeasance, Ovitz will be entitled to a Non-Fault Termination payment (NFT) Septmeber 26,1995
All Comitee members received a spreadsheet with
different alternative assumptions and approved the terms
of the OEA prepared by compensation expert Graef Crystal -
New President- MICHAEL OVITZ
-Ovitz had no experience as President, his experience was in the entertainment business -Ovitz acepted an employment package $23.6 millios per year, plus bonuses and stock options
(First 5 years) -Ovitz was hired on October,1995 -
Ovitz Inappropriate demands
-Ovitz failed to integrate himself in the group of executives in a corporate retreat in Walt Disney World in Orlando.
-Ovitz was a little elitist for the egalitarian Disney. -
Ovitz' Failure to Adapt
-Eisner Spoken with several directors about Ovitz's failure to adapt to the company's culture. -
Ovitz's Termination
-In December 1996, Ovitz was officially terminated by action of Eisner alone.
-Eisner concluded that Ovitz's was terminated without cause, requiring Disney to make the costly Non-Fault Termination Payment (NFT)
