Ex-Director: Firing Was Up to Eisner
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GEORGETOWN, Del. — Walt Disney Co. Chief Executive Michael Eisner didn’t have to seek board approval to fire then-President Michael Ovitz in a way that allowed him to reap a hefty severance payment, a former director testified Monday.
But Irwin Russell also said directors on Disney’s compensation committee reviewed only an abstract of the terms of Ovitz’s initial employment agreement.
Russell, who is Eisner’s personal attorney and a former head of Disney’s compensation committee, indicated that directors deferred to Eisner on key moves.
“That was his decision to make,” Russell said of Eisner’s move to fire Ovitz. “The board of directors doesn’t have to pass on every legal settlement the company makes.”
Lawyers representing Disney shareholders are trying to establish that directors were lax in monitoring Ovitz’s hiring in 1995 and his firing 15 months later.
Ovitz collected a stock-option-and-cash severance package that plaintiffs’ lawyers argue was worth $140 million at the time, although Ovitz ultimately reaped only $109 million because some options expired.
Plaintiffs are seeking to recoup for Disney $200 million in severance payments and interest.
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