Eisner Buys $10 Million Worth of Disney Stock

Michael Eisner is putting his money where his mouse is.

The Walt Disney Co. chief executive, under fire for Disney’s lagging stock price, said Thursday that he bought $10 million in company stock this week on the open market as a show of support for Disney’s prospects.

Disney said the 725,700 shares were bought for $13.55 to $14.49 a share.

A Disney spokesman said Eisner did not want to comment on the purchase. But in a statement, Disney said Eisner’s investment “demonstrates his personal confidence in the company’s direction and prospects for growth over the long term.”

Eisner has been under growing heat with Disney’s stock hitting an eight-year low last week, theme park attendance lagging and, in particular, poor ratings continuing at the ABC TV network. Within the last two weeks, tensions have built between the CEO and Disney’s board of directors, especially Vice Chairman Roy E. Disney and his lieutenant, Stanley P. Gold.

A spokesman for Roy Disney and Gold declined to comment on the purchase.

Executive pay expert Graef Crystal, a former consultant to Disney on Eisner’s pay package, said Eisner’s move appears aimed at defusing the tensions by sending a message to board members and institutional investors that he believes the company will rebound.

“He’s saying, ‘I know that the company’s in trouble, but I have confidence in my management and I wouldn’t put my money in it if I didn’t think I’d get a good return,’ ” Crystal said.

“Cynics will say he’s Humpty Dumpty about to be pushed off the wall. It’s a gutsy move on his part.”

With the stock purchase, Eisner now owns nearly 14 million shares and has options for 21 million more. All of the options are underwater, with 15 million exercisable at $21.10 a share and 9 million exercisable at $26.38 to $42.20 a share.

Disney’s stock closed Thursday at $15.15, up 65 cents, on the New York Stock Exchange.

Eisner is the second-largest individual shareholder, behind Roy Disney. Roy Disney holds 17.5 million shares.