Disney defeated a group of activist investors who fought for seats on the company’s board of directors in a fierce proxy war. For CEO Bob Iger, the shareholder vote was a win that would define his legacy.
Disney’s board defeated Trian Fund Management and Blackwells Capital’s nominees at its annual shareholder meeting by what the corporation described as “a substantial margin.”
Even though Disney’s stock has increased by almost 50% over the last six months, some investors, such as Blackwells Capital and Trian, had anticipated stronger returns and a more significant upheaval within the House of Mouse. Trian’s main goals were to increase the company’s profit margin, reestablish Disney’s supremacy at the box office, and match important executives’ compensation to their performance.
According to someone acquainted with the vote total, Iger defeated Trian’s Nelson Peltz and outclassed him.
The source claims Peltz’s bid for a board position garnered less than one-third of the vote or roughly 31%. According to the individual, Peltz’s bid was also lost by a significant margin by Jay Rasulo, the former head of Disney finance.
Retail investors, who own around 35% of Disney stock, cast 75% of the votes in favor of Disney’s candidates. Nevertheless, board members usually receive far larger totals than 75% of the vote, indicating that Peltz managed to garner some significant interest from regular investors.
Peltz invested a significant amount of money in the fight, thus it was unexpected that he didn’t come close to securing a board position.
“This is by far Peltz’s biggest setback in a proxy battle,” the vote-takers said.
In a statement following its loss, Trian expressed its disappointment with the result but expressed gratitude for “the support and dialogue we have had with Disney stakeholders.”
The statement stated, “We are proud of the impact we have had in refocusing this company on value creation and good governance.” “We’ll be keeping an eye on the company’s performance and its sustained success.”
Peltz’s campaign was fueled by his expression of political differences with Iger. Peltz attacked “The Marvels” and “Black Panther” films in a recent interview with the Financial Times for allegedly promoting what Republicans frequently refer to as a “woke” ideology.
“Why must I own an all-female Marvel team? It’s not that I’m against women, but why must I do it? Why am I not able to own Marvels who are both? Why is an all-black cast necessary? Peltz informed the Financial Times.
Disney is still one of the world’s most prosperous media conglomerates, but in recent years, several areas of its empire have faltered.
Many of its issues stem from the responsibilities of managing a large-scale media company in the 2020s: While streaming services, the potential alternative for linear TV, are burning through cash, the once-lucrative tent pole of linear TV is collapsing quickly. Aside from the negative effects of rising interest rates, moviegoers have been disenchanted with Disney’s more recent Marvel sequels and spinoffs.
“In a few aspects, the difficulties surpass my expectations,” Iger stated in a CNBC interview from the previous year.
A costly struggle for the board, Peltz and other shareholders have taken advantage of such blunders to mobilize support for reform. In a regulatory filing, Trian Partners stated that it anticipated spending roughly $25 million on its board seat campaign.
Iger’s standing as one of Hollywood’s most powerful figures would have taken a serious hit if the Trian group had been successful in obtaining board seats. Furthermore, it would have given the activists the chance to influence or thwart Iger’s plans for the corporate turnaround.
However, it was unclear how Peltz’s strategy, which essentially entailed increasing profit and linking CEO compensation to output, would differ significantly from Iger’s current practices.
A year prior, Iger declared he was going to pursue a restructuring plan to revitalize Disney’s key creative divisions while also laying off 7,000 employees.
Early indications point to the success of his turnaround strategy. Disney shocked investors in February when it revealed its first-quarter earnings and that it would increase earnings per share by 20% this year.
Iger probably has some time to concentrate on the expansion stage of his strategy now that he has repelled Peltz and Trian, at least until his contract expires in 2026, at which point he has pledged to stand away. The conflict, according to a former Disney official, is far from ended.
In an honest interview before the vote, the former executive said, “The fact that it has gotten this much traction tells you that there is a lot of dissatisfaction.”