The former senator was appointed chairman of the board despite strong opposition.

NEW YORK (AP) – The Walt Disney Co.’s dissident shareholders gave a chilly reception Thursday to George Mitchell’s appointment as chairman, saying the selection of the longtime board member proves nothing has changed at the embattled media giant.

Mitchell got the job late Wednesday after the Disney board, reeling from a contentious shareholder meeting, decided it was no longer appropriate for chief executive Michael Eisner to also serve as chairman.

The board chose Mitchell, a former U.S. senator and diplomat, as a replacement – despite the fact that nearly a quarter of shareholders had voted Wednesday against re-electing him to the board.

That decision outraged critics, who believe Mitchell has done a poor job of speaking out against management.

“The board is thumbing their nose at shareholders,” said Greg Taxin, chief executive of Glass, Lewis & Co., one of the institutional investment research firms that had recommended withholding support from Eisner and Mitchell. “The notion that someone with a 24 percent withhold vote should be elevated to the role of chairman is a sad and laughable result.”

Disney had come under fierce attacks in recent months from shareholders angry about the company’s mixed financial results and what they perceived as its disregard for their rights. The dissatisfaction snowballed after two former directors, including the nephew of Walt Disney, mounted a campaign to oust Eisner, Mitchell and three other members of the board for poor performance and failing to make corporate governance reforms such as separating the chairman and chief executive positions.

Although Eisner was the chief target, Mitchell was also criticized for what some viewed as his too-cozy relationship with Eisner. Mitchell and Eisner are old friends, and Mitchell had previously been a consultant for Disney. Before his appointment as chairman, he had served nine years on the board and was its presiding independent director.

“He’s going to have to convince shareholders something new and meaningful has occurred here – and that’s going to be difficult with a board that has virtually the same composition and the same apparent leadership” as before, said Peter Clapman, a senior vice president and chief investment counsel at retirement system TIAA-Cref, which also had opposed Eisner and Mitchell’s re-election to the board.

Mitchell, who declined to comment Thursday, has repeatedly expressed his support for Eisner and the board. In a March 2 editorial in The Wall Street Journal, he said he considered his role as presiding director a “special responsibility” but noted that, “It is not the job of the board to run the company. That is the job of management.”

Mitchell, who left the Senate in 1994, is now a partner in the Washington law firm Piper Rudnick – though he has said he is not a full-time lawyer and has enough time to be an effective board member.

Besides Disney, he is a director at FedEx Corp., Staples, Inc. and Starwood Hotels & Resorts, and previously served on the boards of Xerox Corp., UnumProvident Corp., Casella Waste Systems, Inc., and Unilever.

But some question how much Mitchell can contribute to a corporate board, given his lack of business experience.

“A board member has the role of being an adviser to and monitor of a CEO,” said Steven Kaplan, a finance professor at the University of Chicago Graduate School of Business. “While (Mitchell) has experience on the advising side given his career, on the monitoring side where the big issue is – it’s much less clear” how qualified he is.

Stanley Gold and Roy Disney, the two former Disney directors who led the anti-Eisner and anti-Mitchell campaign, reiterated their criticism Thursday.

“This board just doesn’t get it,” the two said in a statement. “Once again, we see half measures, cosmetic changes and poor choices.”

Gold added, “Mr. Mitchell has a checkered history as a corporate director and lacks the business acumen, independence and credibility to serve as chairman of The Walt Disney Co. His selection as chairman is a terrible choice by this board. It is a grave disservice to their shareholders.”

CalPERS, the California pension fund that owns more than $235 million worth of Disney stock, declined to comment Thursday on Mitchell, saying it is focusing on getting Eisner out of office by the end of the year.

“We don’t think the company got it. All Disney did was change the titles of two people,” spokeswoman Pat Macht said. “There’s a mega-disconnect here between this company and shareholders.”

AP-ES-03-04-04 1811EST