Disney chief loses bonus: European losses responsible for failure to meet target

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The Independent Online
WASHINGTON (Bloomberg and agencies) - Huge losses at Euro Disney have cost Walt Disney's chairman, Michael Eisner, his annual bonus.

A statement filed with the Securities and Exchange Commission over the new year break shows that Mr Eisner was paid dollars 750,000 in the year to 30 September 1993, but no bonus. In 1992 his bonus amounted to dollars 6.69m.

The president, Frank Wells, earned a salary of dollars 400,000 but also received no bonus. The company said that bonuses were dependent on its net income exceeding a return on stockholders' equity of 11 per cent. Disney's return last year was 6 per cent.

However, Mr Eisner exercised stock options for 5,424,572 shares in 1993 that made him a gain of dollars 202.3m based on his exercise price. He continues to have beneficial ownership of 1.31 per cent of Disney's stock.

The SEC filing does not say which day's stock price was used to value the options Mr Eisner exercised. But separately the document said Mr Eisner still held unexercised stock options that had a value of dollars 161.2m on 30 September.

Disney did not specifically link Mr Eisner's missing bonus to the European theme park's troubles. However, the Euro Disney losses were the primary reason the company's financial performance lagged and it failed to meet the bonus targets set out in Mr Eisner's 1989 employment agreement.

That contract, which runs until 1998, calls for Mr Eisner to receive a 1993 bonus equal to 2 per cent of the amount by which the company's 1993 net income exceeded a return on stockholders' equity of 11 per cent.

Mr Eisner is credited with turning a moribund Disney round after taking the reins in 1984. Under his leadership earnings increased sixfold, reaching a peak of dollars 824m in 1990 before sliding back to dollars 637m in 1991 and dollars 817m in 1992.

He has consistently been among the highest-paid executives in the US.