Walt Disney Financial Analyis Essay

Words: 4489
Pages: 18

Executive Summary The Walt Disney Company (DIS) has a long and prestigious history in the entertainment business covering a period of greater than 75 years. The DIS objective is to be the world leader in production of entertainment using their diversified portfolio to differentiate its brands including Walt Disney Parks, ESPN, PIXAR, MARVEL, and ABC. The financial goals are to maximize cash flow, maximize earnings, and capital profits that will drive longer-term shareholder value (The Walt Disney Company, 2012). The DIS conglomeration offers brand recognition although DIS faces high sunk costs including updates of their parks. Although DIS is faced with a number of industry competitors, it remains the industry leader with a …show more content…
The organized effort urged shareholders to vote against the board members involved in the regression to the combined roles of Chairman and CEO (Lieberman, 2012). The same groups aimed to derail the increase of Robert Igners salary from $26 million to $20 million as he steps into the regression model (Palmeri, 2012) of combined roles. During Mr. Igners reign a $100 investment in 2005 would now be worth $171 (Lieberman, 2012) both of the initiatives gained approval. Although the shareholders settled the dispute, the weakness is in the precedent and public perception. Mr. Igner’s compensation ignores the public sensitivity to excessive executive compensation. There is also the question regarding the balance of power as Walt Disney had previously struggled with the separation of the two roles in 2004 when then CEO Michael Eisner created the impression of a rubber stamp (Lieberman, 2012) Board of Directors. The board will be left with the decision to recombine the roles or deciding if this is merely a transitional succession plan (Palmeri, 2012) but more importantly is this too much power and when does it ignore the stakeholder of the shareholder? The board’s decisions are private, closed sessions citing private company information although the employee and public perception that Walt Disney is ignorant of the current economic