Personal or Family Holdings Also Increased : Disney Chairman Paid $2.12 Million for Year

Michael D. Eisner received total cash compensation of $2.12 million for his first full year as chairman and chief executive of Walt Disney Productions, according to a proxy statement to the entertainment company’s shareholders.

The 43-year-old executive also increased his personal or family holdings of Disney common shares by 28,450 shares during the past year. Although Eisner has been granted stock options to acquire 510,000 shares at $57.43 per share, or roughly half the current market price, the chairman said in a telephone interview Thursday that “every share I own I bought on the open market.”

Eisner noted that under his six-year contract, only 20% of the options could be exercised this year. According to last year’s proxy statement, Eisner’s contract also entitles him to borrow “reasonable” amounts to facilitate his exercise of Disney stock options.

Eisner’s compensation included a paid cash bonus of $687,000 and a deferred cash bonus of $687,000, in addition to his salary of $750,000. His contract calls for an annual bonus equal to 2% of the dollar amount by which the company’s net income exceeds a 9% return on stockholders equity.

15% Return on Equity

For the year ended Sept. 30, 1985, Disney reported a 15% return on stockholders equity, up from 8% in the previous year.

Frank G. Wells, president and chief operating officer, received cash compensation of nearly $1.09 million, in the form of a $400,000 salary and deferred cash bonus of $687,000. Wells’ contract entitles him to an annual bonus equal to 1% of the amount by which the company’s net income exceeds a 9% return on stockholders equity.

As of Dec. 1, 1985, Wells had not increased his Disney holdings of 13,500 shares from the previous year. Under his employment agreement, Wells has been granted stock options on 460,000 shares at a price of $57.43 each.

The Eisner-Wells team was installed at Disney in September, 1984, after a turbulent eight-month period when the Burbank-based company fought off two unwanted suitors and welcomed the Bass family of Fort Worth as friendly investors.

The Bass stake peaked at 25% in October, 1984. As of Dec. 23, 1985, the group held 23.5% of Disney’s common shares and has disclosed plans to sell 376,234 shares within 10 days.

Raymond Watson, Eisner’s predecessor as chairman for 16 months, received an additional $188,000 last year, bringing his employment agreement settlement to a total of $1.96 million, according to the proxy statement. That marks the “final, total payment,” Wells said in a brief telephone interview.

Watson, a former Irvine Co. president who now heads his own real estate development company, has served on the Disney board since 1974 and is chairman of Disney’s executive committee.

To Buy Back Shares

Disney announced plans in November, 1984, to buy back slightly more than 10% of its outstanding shares. According to the proxy, the company had 32.37 million shares outstanding on Dec. 13, 1985, down from 33.75 million shares a year earlier.

No new candidates were proposed for the 14-member Disney board. The annual meeting is slated for Feb. 6 in Boca Raton, Fla., with Dec. 13, 1985, set as the date of record.