WALT DISNEY COMPANY 4
directors across the globe including Australia. In the final case determination, both the
courts ruled in favor of Disney’s directors. The plaintiff made various allegations on the
compensation culture of Walt Disney. The allegations included; Michael Eisner who
serves as Walt Disney’s CEO hired Ovitz based on the personal friendship between
them. In a similar vein, Irwin Russell who serves as the chairperson of the
compensation committee influenced the recruitment of Ovitz. The committee in charge
of compensation failed to carry out an adequate investigation on the terms proposed for
Ovitz employment agreement (OEA). Additionally, the board together with the
compensation committee failed to pay sufficient attention to the proposed terms of Ovitz
employment agreement (Godfrey 2007).
The cases raised revolved around Disney’s compensation culture, the execution
of duties and responsibilities by the CEO, Eisner and the board of directors. This case
opened a Pandora’s Box for employees from Australia and globally to sue Walt Disney
Company. Additionally, the company’s directors in Australia were party to the case and
the case outcome would affect their activities directly. In case the plaintiff won the case
against Walt Disney Company, they would be dealt a second blow by the state as they
would have gone against the state regulations on ethical practices. This would lead to
consequences such as revocation of operating license. Further, these cases can
damage the reputation of the company as they focus on portraying Eisner and the
directors as inept. Additionally, the board and the CEO would be considered to serve in
the company while having a conflict of interest. Taking into consideration, tChancellor
Chandler’s submission during the trial, he pointed out areas of concern that were raised
by the plaintiff. In the defense of Walt Disney Company, it was realized that the

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Impact of Legislative Frameworks on Walt Disney Company

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