Disney has recently nominated a slate of 12 directors and has taken a firm stance against activist investor Nelson Peltz’s attempt to join its board. While it was widely expected that Disney would reject Peltz’s bid, the company did not seize the opportunity to appoint a more agreeable activist to its board.
In a proxy filing on Tuesday, Disney made it clear that it did not endorse Peltz as a director. The company stated that its decision was based on multiple factors, including the fact that Peltz had not presented any strategic ideas for Disney during his two-year quest for a seat on the board.
One notable point emphasized by Disney was Peltz’s close association with former Marvel Chairman, Isaac Perlmutter. Perlmutter has provided the majority of the approximately $3 billion position that Trian, Peltz’s investment firm, has amassed in Disney’s stock. However, Perlmutter’s relationship with Disney has been complicated, and he was dismissed from his position at the company last year due to restructuring efforts led by CEO Bob Iger.
Due to this complex history between Perlmutter, Disney, and its top executives, Disney expressed significant concerns about how this partnership would affect Peltz’s agenda as a director.
In addition to rejecting Peltz’s nomination, Disney also refused Trian’s proposal to appoint James “Jay” Rasulo, a former chief financial officer at the company who has joined Peltz in his proxy fight.
With its latest nominations and steadfast rejection of Peltz and his proposed director, Disney has made it clear that it will not be swayed by activist investors seeking to influence its board. The company remains focused on maintaining its strategic direction and continuing to uphold its position as a leader in the entertainment industry.
Disney Rejects Peltz, Questions About Board Independence Arise
Disney recently rejected the board nominees put forward by Blackwells Capital, provoking questions about the alleged lack of board independence. Surprisingly, Disney did not attempt to defuse the criticisms by appointing a more favorable activist member. The investment firm’s candidates were turned down on the basis of their inadequate directorial experience in large public companies.
To counter accusations of disregarding external feedback, Disney has formed an information-sharing agreement with activist investor ValueAct Capital Management. ValueAct is renowned for its strategic collaboration with management behind the scenes. Although this move may pacify some market concerns, it is unlikely to mark the end of Peltz’s campaign against Disney.
Peltz’s crusade against Disney began in January last year, where he raised concerns about the company’s expenses and demanded a board seat. Initially, his campaign halted temporarily when Iger introduced a $5.5 billion cost-cutting plan, later increased to $7.5 billion, resulting in 7,000 layoffs. At that time, Peltz expressed satisfaction with Disney’s willingness to fulfill their demands.
However, Disney’s stock performance has been lackluster since then. In premarket trading, Disney shares were down 0.5% at $92.61. Over the past 12 months, the stock has experienced a 6.1% decline, while Netflix’s shares have risen by 47% and Comcast’s by 11% during the same period.
Disney’s recent proxy filings unveiled that Iger’s total pay was valued at $31.6 million last year, a decrease from his previous full year of employment in 2021 when he received $45.9 million.