LOS ANGELES – Walt Disney Co.'s (DIS) board of directors on Wednesday raised the annual dividend 14 percent and appointed Fred Langhammer, the former chief executive of cosmetics company Estee Lauder (EL), as a director.
Disney raised the dividend to 24 cents per share from 21 cents, and Chief Executive Michael Eisner (search), who had signaled the move in recent months, said in a statement that Disney aimed to continue "moderate, sustainable dividend increases over the coming years."
The board, which has spent the year regaining respect from many investors who had accused it of blindly following Eisner's lead, said it would add one more independent director within 12 months.
Three-quarters of the board will be independent, with Langhammer's election, although two corporate governance analysts said Langhammer had been on boards that ranked poorly on some governance issues.
"It is a shame that with all the lessons they've learned about corporate governance [at Disney], they still have a few left to go," said Nell Minow, a corporate governance expert at the Corporate Library (search).
Disney Chairman George Mitchell said Langhammer's experience building and protecting the Estee Lauder (search) brand overseas led to his appointment at the media and theme park conglomerate, which sees foreign expansion as a key growth opportunity.
Langhammer, who will join the Disney board in January, is chairman of global affairs at Estee Lauder Cos. Inc. and served as chief executive, as well as on the board. The German-born executive has worked abroad for Lauder. Disney executives have said that one of their primary goals is expansion outside the United States.
Minow said that she was concerned about the compensation committee at Gillette Co., on which Langhammer serves, as well as Langhammer's possible overcommitment. Minow said his international experience was good news for Disney, however.
Langhammer is still a director at Gillette and Spanish retailer Industria de Diseno Textil SA, as well as serving other groups.
"I was really looking for them to bring in someone who had high credibility with the shareholder community, and I don't think they've done that," Minow said.
Executive compensation is a topic currently center stage at Disney as shareholders sue over a 1996 severance package to former President Michael Ovitz.
Institutional Shareholder Services spokesman Pat McGurn said that the record of the Estee Lauder board was poor, largely because of family-control issues.
"We would love to hear something from this director himself. The heritage of corporate governance at the Estee Lauder is hardly a strong endorsement," he said.
Representatives of former board member Roy Disney, who sparked the fight early this year to oust Eisner that led to the board stripping him of the chairmanship in March, were not immediately available for comment.
Roy Disney and allies have backed away from threats to run an alternate slate of directors after the board said it would aim to find a new CEO by next June. The dissidents could still nominate a slate in the next few days, but investors and analysts have said their chances of victory would be slim.
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