Disney's directors had kin employed by company

SAN FRANCISCO — Walt Disney Co. said four independent board members had relatives who were employed by the No. 2 U.S. media company last year. That might not be allowed under new rules proposed for independent directors.

Disney's announcement came in a filing with the Securities and Exchange Commission (SEC). The New York Stock Exchange (NYSE) has proposed new standards of "independence" for corporate directors. With the changes, a director wouldn't be considered independent if a relative worked at the company in the past five years, NYSE spokesman Ray Pellecchia said in an e-mail.

The NYSE proposal also would require that a majority of a company's directors be independent from the company. At Disney, Chief Executive Officer Michael Eisner plans changes to the board to blunt criticism that it isn't accountable to shareholders, consultant Ira Millstein said in an interview in April. Eisner said last week that Disney will reduce the board's size.

"The board is currently reviewing appropriate steps to ensure ongoing compliance with applicable rules and corporate 'best practices' generally," Disney said in the filing.

Independent director Reveta Bowers' son, Craig, was a senior product manager at Disney's Internet group in the fiscal year ending in September 2001, Disney spokesman John Spelich said in an e-mail. He earned $81,863, Disney said in the SEC filing. Craig Bowers is no longer employed at Disney. Reveta Bowers is a Los Angeles school principal.

The daughter of independent director Stanley Gold, Jennifer Gold, is a senior marketing manager in Disney's consumer-products division, Spelich said

. She earned $85,111 last year, the company said. Stanley Gold manages the investments of company founder Walt Disney's family as chief executive of Shamrock Holdings.

Disney director Raymond Watson's son, David Watson, is executive director for new media at the Disney Channel cable-television network, where he earned $152,608 last year. Raymond Watson is vice chairman of Irvine, a Southern California real-estate developer.

The wife of independent director John Bryson, Louise Bryson, is executive vice president for affiliate sales and marketing for Lifetime Entertainment Television, a cable network that is 50 percent owned by Disney. Louise Bryson was paid $1.35 million last year. Her compensation isn't subject to the Disney's board's approval, the filing said.

John Bryson is chief executive of California power utility Edison International.

Disney has 16 directors, including Eisner and Disney President Robert Iger.

Disney also said in an SEC filing that Eisner and Chief Financial Officer Thomas Staggs filed sworn statements certifying the accuracy of Disney's financial reports.

The sworn statements are required under a new SEC rule. Chief executives are being required to take on more personal liability for their financial reports after companies including Enron and WorldCom issued misleading financial statements.

Shares of Disney rose 15 cents to $14.65 yesterday in NYSE composite trading. The stock has fallen 46 percent in the past year.

Disney is the second-largest U.S. media company after AOL Time Warner.