A Battle-Proven, Blunt Director

Robert Matschullat sports his share of boardroom and takeover battle scars. Now he’s picking up more at Walt Disney Co.

Eleven years ago, the longtime investment banker was part of a palace coup at investment bank Morgan Stanley. Later, as Seagram Co.’s chief financial officer, he was immersed in a flurry of acquisitions as the company moved from liquor into entertainment.

Now he finds himself as an independent director at Disney, which faces a nearly $50-billion unsolicited takeover offer from Comcast Corp. and a dissident shareholder battle to oust Chairman Michael Eisner.

Those who know Matschullat describe him as a blunt, bare-knuckles player who could well play a pivotal role as the Disney story unfolds. They speculate that, based on his history, he could prove to be an important ally for Eisner or someone who could pose a formidable challenge.

“I told Michael, he’s a fantastic guy, but he’s his own guy,” said Seagram Co. heir Edgar Bronfman Jr., who endorsed Matschullat for the Disney board.

During a four-year tour as Seagram’s vice chairman and chief financial officer, he steered the company through a maze of deals, including a $10-billion purchase of PolyGram and a $4-billion sale of television assets to mogul Barry Diller.

Matschullat’s reputation for brash independence was reflected in the assessment of one of Eisner’s harshest critics, former Disney board member Stanley P. Gold, who resigned late last year along with his business partner, Roy E. Disney.

Gold singled out Matschullat and Northwest Airlines Corp. Chairman Gary Wilson as directors to watch if Comcast’s. bid for Disney ripened into a full-blown corporate siege. Gold’s comment came during a conference call with investors while lobbying shareholders to withhold votes from Eisner as director.

“I don’t want to prejudge where they are on the issue,” Gold said of Matschullat and Wilson. “But they are serious people who know how to take a look at this in a meaningful way.”

So far, the 56-year-old investor has remained conspicuously aligned with the Disney chief. Last week, Matschullat joined in a unanimous vote by the 13-member board in rejecting Comcast’s takeover offer as too low and giving Eisner a vote of confidence.

Earlier, Matschullat was at Eisner’s side during Disney’s recent roadshows, including an appearance at a three-day presentation to analysts in Orlando, Fla. He also helped lobby Institutional Shareholder Services on Eisner’s behalf. The advisory group ended up recommending that stockholders not vote for Eisner’s re-election as a Disney director at the company’s March 3 annual meeting in Philadelphia.

Matschullat was recruited to Disney’s board 14 months ago and put in charge of the audit committee in a series of moves to to counter criticism that the board lacked heft and independence. Former U.S. Sen. George Mitchell, already a Disney director, took charge of key governance issues.

A number of Matschullat allies spoke admiringly of his independence.

“One thing he’s very good at is knowing when to say no, “ said Tully Friedman, a 30-year friend who in 1977 brought Matschullat to Salomon Bros.’ San Francisco office and now counts him among the executive investors in his Friedman Fleischer & Lowe private equity firm.

“I’m a rather strong personality, but Bob has always been one to tell me what he thought. He’s never hesitated,” said Credit Suisse First Boston Chief Executive John Mack, the executive whom Matschullat supported in the power play at Morgan Stanley.

During the Morgan Stanley coup, Matschullat was one of six “inside” directors who largely controlled the firm. He had been boosted onto the board by Robert Greenhill, then president of the Wall Street firm.

The next year, however, Matschullat voted with four fellow directors to oust Greenhill, a star banker regarded as an inadequate manager.

Matschullat’s abrasiveness led to at least one major embarrassment during his tenure at Morgan Stanley.

In a 1992 article, the Wall Street Journal chronicled a conflict between Matschullat, then head of investment banking for the firm, and an analyst who said he had pressured her to raise her valuation of Safeway Stores Inc. shares. At the time, Morgan was co-managing the grocery firm’s public offering.

Matschullat challenged details of the analyst’s account. But that story, and an Institutional Investor magazine recap of the later coup, disclosed his inclination for the kind of hardball tactics that also have often marked Eisner’s tenure at Disney.

A 1965 graduate of Burlingame High School south of San Francisco, he told an interviewer from the yearbook that he planned to study dentistry.

After attending Stanford, however, Matschullat stayed on at the university’s business school. His fellow students included several future Wall Street stars, including former Merrill Lynch President Herbert M. Allison Jr. and Needham & Co. founder George Needham.

Matschullat first worked with Morgan Stanley in San Francisco, then jumped to Salomon, where he eventually ran the firm’s San Francisco office, before returning to Morgan to head its West Coast operation in the mid-1980s.

In what Friedman called a “remarkable” ascent, Matschullat leapfrogged over colleagues to head Morgan’s investment banking operation in New York. There, he worked with Paul Taubman and Steven Rattner, investment bankers who are advising Comcast in its Disney bid.

At Seagram, Matschullat worked closely with Lazard Freres & Co., where Rattner and yet another Comcast advisor, Felix Rohatyn, were then planted.

Since leaving Seagram, Matschullat, who lives in Greenwich, Conn., has become a power on several boards -- signaling perhaps a new willingness for companies to seek tough-minded directors in an era of corporate scandals.

In a move widely viewed as a model for good governance, Matschullat last month became the first non-executive chairman of Oakland-based Clorox Co., where he has been a director since 1999.

“He’s very independent,” said Clorox Chief Executive Gerald Johnston.

Disney’s critics, including Institutional Shareholder Services, have urged the company to take a similar action by splitting the chairman and CEO jobs.

Across the bay in San Francisco, Matschullat also heads the finance committee at healthcare supplier McKesson Corp., where he joined the board in 2002.

If McKesson Chief Executive John Hammergren’s experience is any indication, his counterpart at Disney can expect to hear from their mutual director. In Hammergren’s words: “You don’t have to ask Bob to share his opinion.”