Disney board “did the right thing” in Ovitz contract

The $140 million employment contract that Michael Ovitz (left) got from the Walt Disney Company was actually not as generous as those given to other similarly situated executives, a management compensation consultant told a Delaware jury Wednesday. Ovitz’s contract is the subject of a protracted shareholder derivative action that has already gone on for more than seven years. Plaintiffs’ lawyers claim that the Disney board of directors acted wrongly when it agreed to the contract, and then compounded the problem by giving Ovitz a no-fault termination.

Consultant Graef Crystal pointed out that Ovitz had been making $25 million a year as Hollywood’s biggest talent agent—which would have amounted to $125 million over the five-year period of his contract with Disney. Crystal said that the option vesting provisions of the deal were actually more severe for Ovitz than those of many entertainment executives.

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