Disney wins boardroom showdown with activist investor
Disney saw off a boardroom coup on Wednesday, defeating a bid by one of corporate America’s most renowned activist investors to overhaul its management.
The entertainment giant announced at its annual shareholder meeting that it had secured enough votes by a “substantial margin” to defeat a campaign launched by the billionaire Nelson Peltz, who has spent months demanding change at the Magic Kingdom and excoriating its top executives.
Peltz received a late endorsement from Elon Musk, who has become a vocal critic of Disney in recent months after it joined an advertising boycott of his social network X, formerly Twitter.
As of Tuesday evening, however, enough votes had been cast to put Disney’s proposed boardroom candidates safely ahead of those put forward by Peltz’s Trian Fund Management, Reuters reported, citing sources familiar with the matter.
Shareholders in the firm voted ahead of its annual meeting. Ahead of the vote Bob Iger, Disney’s veteran CEO, had secured the backing of the company’s founding family and top names including the Star Wars creator George Lucas, the JP Morgan CEO, Jamie Dimon, and Laurene Powell Jobs, the widow of Pixar and Apple CEO Steve Jobs.
Trian kicked off a high-profile proxy battle last year and proposed that Peltz and Jay Rasulo, the group’s former chief financial officer, replace two candidates on its board. Disney has “lost its way over the past decade”, Trian argued, blaming this on “a board that lacks focus, alignment and accountability.”
The company is estimated to have spent $40m fighting off Peltz. “With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said in a statement.
Iger, who previously led Disney from 2005 to 2020, was summoned out of retirement in 2022 amid concern on Wall Street over problems inside the House of Mouse.
Losses from an expensive foray into streaming were mounting, as lackluster returns at the box office raised questions over the strength of its output. On top of this, Disney had been sucked into America’s culture wars.
Under Iger the conglomerate has sought to curb investors’ fears, cutting 7,000 jobs, reducing costs and reorganizing the ranks. Since October, when Peltz announced his campaign, shares in Disney have rallied by almost 50%.
Disney pushed back hard against Peltz, questioning his media industry experience and ability to work constructively with Iger. It advised shareholders to reject Rasulo’s campaign for a board seat, too, arguing the sector had “radically changed” since he left the firm in 2015.
But some, including Musk, have suggested Peltz would be a welcome addition to Disney’s board. “He would help reform the company, improve the quality of product and generally serve in the best interests of shareholders, as he has done at many other companies,” Musk said on Wednesday, claiming Peltz’s appointment would “significantly improve Disney’s share price”.
Acknowledging that he does not own any shares in Disney, Musk said he would “definitely” invest if Peltz joined the board. “His track record is excellent.”
He was responding to a post on X by the hedge fund tycoon Bill Ackman, who criticized the “inappropriateness” of leaking early vote returns to the media. “Companies of the caliber of Disney and/or its advisors should not behave this way,” he wrote.