Disney has scored a huge victory in a proxy battle against a group of activist investors who were coveting seats on the company’s executive board.
The shareholder vote at Disney’s annual shareholder meeting saw nominees put forward by Trian Fund Management and Blackwells Capital defeated by a substantial margin over Disney’s board of directors, in what was described as a defining victory for Disney CEO Bob Iger.
Despite the company having increased its market dominance by nearly 50 percent in the last six months, some investors, Trian in particular, had aimed to secure even higher returns and an intensive internal reshuffle within the organization in an effort to elevate Disney to its former glory.
However, according to an internal source, Trian’s executive of choice, Nelson Peltz, was crushed by Mr. Iger in the vote count, having received less than a third of the vote alongside former Disney finance chief Jay Rasulo, who colluded with Mr. Peltz in an effort to dethrone Mr. Iger.
The proxy battle, which was widely regarded as a referendum on Mr. Iger’s tenure, saw the biggest challenge from Trian. The shareholder had nominated Mr. Peltz, an 81-year-old industry veteran alongside Jay Rasulo to the board.
Although retail shareholders voted overwhelmingly for Disney’s candidates, the overall consensus appeared to be lower, indicating Mr. Peltz’s popularity with conventional stockholders. Retail shareholders hold just over one-third of Disney’s stock.
Nonetheless, the battle proved costly for Mr. Peltz, who reportedly spent large amounts of money on his campaign, which led to some surprise about his ultimate defeat.
“This is by far Peltz’s biggest loss in a proxy fight,” according to the insider, as reported by CNN.
Trian issued a statement afterwards, expressing disappointment at the result while commending the support and dialogue with the company’s shareholders.
“We are proud of the impact we have had in refocusing this company on value creation and good governance,” the statement read. “We will be watching the company’s performance and be focusing on its continued success.”
Mr. Iger, who is currently serving his second stint as the company’s Chief Executive, said after the vote that attention can now be focused on the company’s foremost priorities.
“With the distracting proxy contest now behind us, we’re eager to focus 100 percent of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” he said.
Mr. Peltz previously stated that political differences with Mr. Iger motivated his campaign, which was largely centered around issues surrounding the “woke agenda” Disney has purportedly been pushing in some of its movies, including “The Marvels” and “Black Panther.”
“Why do I have to have a Marvel that’s all women? Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?” Mr Peltz previously told the Financial Times in an interview.
Despite its global success that has spanned decades, Disney has had its fair share of problems in recent years.
Some of this appears to be related to the rise of streaming services, which has replaced much of traditional TV, in addition to a volatile economy and growing disinterest from viewers on Marvel sequels and spin-offs.
“In some ways, the challenges are greater than I anticipated,” Mr. Iger told CNBC last year.
In this regard, Mr. Peltz’s and other shareholders’ approach could have facilitated a turnaround in the company had their campaign been successful. Trian had previously estimated to spend around $25 million on the campaign, which could have marked the end of Mr. Iger’s quest for a corporate turnaround.
However, a change in strategy initiated by Mr. Iger last year saw the layoffs of thousands of Disney employees and a complete departmental reshuffle in an effort to reinvigorate profits.
The change in tactics has resulted in significant growth in the company’s first-quarter earnings, with earnings projected to increase by 20 percent per share in 2024, which can work in Mr. Iger’s favor at least until his contract ends in 2026.
