Beyond Disney: Rising Investor Clout ; as Corporate Proxy Season Begins, More Shareholders Than Ever Appear to Be Asserting Themselves, as in the Eisner Saga

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When 43 percent of stockholders withheld their votes Wednesday in Michael Eisner's uncontested bid to remain at the helm of Walt Disney Co., they sent a no-confidence message that will resound in boardrooms far beyond the one that runs Mickey's realm.

Shareholders - especially big institutional ones who manage other people's money - are mad. And with the new proxy season now under way, they appear set to act on their anger, experts say.

"You'll see this in other companies," says Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. "The day of easy shareholder approval of a company that's had governance and performance issues is really over, and I think boards need to be mindful of that."

Signs of the latent power of shareholders can be seen in leadership changes that came in advance of the season of shareholder meetings, which roughly runs from March through May.

Philip Watts, head of Royal Dutch Shell, resigned Wednesday. Shareholders have been simmering since January about Shell's downward revising of its stated oil and gas reserves. Last month's announcment by Douglas Daft, Coca-Cola's chief, that he would retire at year's end came amid federal scrutiny following charges by former executives that the company overshipped ingredients to bottlers to pump up financial results. Four years ago, a shareholder lawsuit reportedly made similar charges.

After the Disney vote, the company's board met a key demand of the protesters by stripping Mr. Eisner of his chairman's position, but handed it to his close ally, George Mitchell. Eisner remains Disney's chief executive officer.

While shareholder revolts almost never win majority support, they can attract enough attention to change corporate behavior. "It's a blunt instrument to send a message," says Gerald Davis, professor of organizational behavior at the University of Michigan. But "I think we're seeing the fruition of some long-term trends."

A confluence of events from corporate scandals and mismanagement to rule changes is pushing mutual funds, insurance companies, and pension funds to take a more activist approach in voting their shares. Experts call it a new era of accountability.

"I think there's no question that what's happened over the past three years or so has shortened the fuse for institutions," says Beth Young, a lawyer and research associate at The Corporate Library, an independent online source of corporate governance information. "There used to be a sentiment that you give people a fair amount of latitude, you give CEOs and boards a lot of time.... There's a sense now that that attitude really allowed mismanagement and corruption and wrongdoing to flourish."

Professor Davis points to developments over the past 15 years or so that he says have made it much easier for institutional investors - and small ones, voting their proxies - to wield real influence over the way boards do their work. …