It’s official: Disney shareholders shot down activist investor Nelson Peltz’s effort to win seats on the Mouse House’s board of directors. Investors voted to reelect all 12 of the company-backed board members, including CEO Bob Iger, ending the most expensive corporate proxy fight in history.
The voting results for Disney board candidates were announced Wednesday at the company’s 2024 meeting of shareholders, held virtually. Peltz, who heads investment firm Trian Partners, failed to get enough votes in his favor to clinch a board seat (as did Trian’s other nominee, ex-Disney Jay Rasulo).
Horacio Gutierrez, Disney’s senior EVP, chief legal and compliance officer, who oversaw the proceedings at the meeting, said that the preliminary vote tabulations showed Disney’s 12 directors had won reelection by a “substantial margin” over the candidates nominated by Trian and a smaller investment firm, Blackwells Capital. (See the full list below.) He said the final vote counts will be disclosed in subsequent meeting minutes.
According to the preliminary results, Iger won reelection with 94% of the votes cast in his favor — while Peltz got just 31% and Rasulo got even less. Maria Elena Lagomasino, the incumbent Disney director whom Trian had urged investors to kick off the board (along with board member Michael Froman), received twice as many votes as Peltz and five times as many as Rasulo.
Disney’s shares closed down 3.1% Wednesday after the shareholder meeting, amid a slight uptick in the broader S&P 500 and Nasdaq Composite market indexes.
In a prepared statement, Disney chairman Mark Parker said, “We are immensely grateful to our shareholders for their investment in Disney and their belief in its future, particularly during this period of great change in the broader entertainment industry. We are fortunate to have a highly qualified board of directors who possess a profound commitment to the enduring strength of this company and an enormous amount of experience and expertise, including succession planning.”
Parker also thanked Iger, “his exceptional management team” and Disney’s employees “for continuing to deliver for consumers and shareholders throughout this distracting proxy battle.”
Iger said in a statement following the vote results, “I want to thank our shareholders for their trust and confidence in our board and management. 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.”
Peltz’s Trian had campaigned on a platform of urgently needed change to Disney’s board, citing the media company’s stock underperformance over the last several years and the board’s “botched” succession planning with former CEO Bob Chapek (Iger’s hand-picked successor who was ousted after less than three years). In response, Disney said its board already is conducting a diligent CEO selection process “led by successful CEOs with recent, highly praised succession experience.”
Peltz’s defeat is a vote of confidence in Iger and the current board. And it’s certainly a relief for Iger, who must have been dreading the prospect of dealing with Peltz directly as a board member. Iger commented on Peltz’s proxy fight at a Morgan Stanley conference last month, saying, “This campaign is designed to distract us. I am working really hard to not let this distract me, because when I get distracted everybody who works for me gets distracted, and that’s not a good thing.”
That said, Peltz’s insurgency has drawn attention to Disney’s CEO succession plan — and the question of who will be named to replace Iger when his contract expires at the end of 2026. Influential advisory firm Institutional Shareholder Services had recommended shareholders elect Peltz to the Disney board (but not Rasulo) citing in part Disney’s “failed” CEO succession planning process.
Disney has struggled to find someone to take over the CEO job from Iger. In 2019, Iger announced that he planned to leave two years later when his then-contract expired. Iger quipped at the time, “I was going to say, ‘This time I mean it,’ but I’ve said that before.” The board reinstalled Iger as chief executive in November 2022 after firing Chapek.
Trian, in a statement following the shareholder vote, said: “While we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders. We are proud of the impact we have had in refocusing this company on value creation and good governance. Since we reengaged with the company in late 2023, Disney has announced a host of new operating initiatives and capital improvement plans.” Trian also noted that Disney’s board has been “refreshed” with two new directors — Morgan Stanley executive chairman James Gorman and former Sky CEO Jeremy Darroch.
Trian’s statement continued, “Over the last six months, Disney’s stock is up approximately 50% and is the Dow Jones Industrial Average’s best performer year-to-date. We thank Trian’s investors for the confidence they have placed in our efforts. And, we wish the best for all of the company’s stakeholders, including Disney’s board and management team. We will be watching the company’s performance and be focusing on its continued success.”
Disney had lobbied shareholders to reject Peltz and Rasulo for the board (along with the Blackwells nominees). The company said Peltz “brings no media experience and has presented no strategic ideas for Disney” and called Trian’s proxy fight “disruptive and destructive,” fueled by Peltz’s “vanity” and a personal grudge against Iger held by ex-Marvel Entertainment chief Ike Perlmutter (who had pooled his shares with Trian’s holdings in the proxy fight).
In agitating for a board seat, Peltz argued that Disney’s directors weren’t adequately holding Iger accountable in key areas. One of the recommendations in Trian’s lengthy white paper analyzing Disney’s operations was that the board require management to develop a “clear” streaming strategy with “tangible goals that will achieve Netflix-like margins of 15%-20% by 2027.” Trian also urged Disney to take more “shots on goal” and increase creative risks outside of its core franchises to achieve a better return on its streaming content (similar to Netflix).
Peltz, in a recent interview with the Financial Times, questioned Disney’s “woke” Marvel films featuring Black and women superheroes — including “Black Panther,” which grossed $1.35 billion at the worldwide box office — asking rhetorically, “Why do I have to have a Marvel [movie] 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?” Trian’s white paper had recommended that Disney’s board initiate a “comprehensive… review of studio operations and culture, including leadership, processes and workflow” and “prioritize new intellectual property to reignite the ‘flywheel’ and drive Disney’s long-term growth.”
Iger, speaking last fall at the New York Times’ DealBook Summit, acknowledged that Disney productions should focus on storytelling rather than advocating particular agendas. “Creators lost sight of what their No. 1 objective needed to be. We have to entertain first. It’s not about messages,” Iger said.
On Wednesday, in response to a shareholder-submitted question asking, “Is it possible for Disney to stay out of political and social agendas and just provide entertainment?”, Iger responded: “Our job is to entertain first and foremost and by telling stories… I’ve always believed that we have responsibility to do good in the world. But we know our job is not to advance any kind of agenda. So as long as I’m in the job, I’m going to continue to be guided by a sense of decency and respect. And we will always trust our instincts.”
In the end, the majority of Disney’s shareholders decided to stick with the current board — no doubt helped by a turnaround in the Disney stock price. For the 2023 year-end quarter, Disney showed improvements in cost containment, while investors also appeared to rally around new strategic initiatives like the company’s investment in Epic Games and Iger’s announcement that the stand-alone streaming version of ESPN in set to launch in 2025.
Not unreasonably, Trian has argued that “the pressure of our proxy contest pushing Disney to perform” has contributed to the stock’s recent rise. Peltz in January 2023 had threatened a proxy fight with Disney. However, by Feb. 9, Peltz suspended his hunt for a board seat after Disney unveiled a broad restructuring with Iger’s return as CEO.
Peltz, in his comments to Disney shareholders Wednesday prior to the voting results being revealed, noted that the board battle was Trian’s “second go-round with this” and said, “We hope that this time will be our last, and that shareholders will not be let down like a year ago.” He added, “Regardless of the outcome of today’s vote, Trion will be watching the company’s performance.”
The showdown is believed to be the priciest proxy fight in U.S. history. Disney disclosed that it expected costs for the board battle to be in around $40 million, given its get-out-the-vote effort to sway individual investors (who hold more than one-third of the company’s shares). Trian estimated it could spend upwards of $25 million and Blackwells expected to spend around $6 million.
Prior to the votes being tallied at the meeting, Disney gave Peltz three minutes to present his case to shareholders. He reiterated previous points (saying Trian’s objective is to help turn around companies that have “perhaps stumbled”) and praised the company as having “some of the greatest brands in entertainment.” Blackwells declined Disney’s offer to provide a statement the meeting, according to Gutierrez.
Blackwells said in a statement following the announcement of the preliminary shareholder vote results, “Blackwells’ primary objective was achieved – keeping Nelson Peltz out of the Disney boardroom. The company would have benefited from any one of our candidates for the hard work needed over the next few years to advance this iconic company, but we respect the will of the shareholders and the outcome. Disney, for its part, showed that it needs to be more focused on transparency and truly acting in the best interests of all its shareholders.”
Blackwells added, however, that it will continue to pursue its litigation against Disney alleging the company has a potential conflict of interest with investment firm ValueAct Capital. Disney and ValueAct announced an “information sharing” deal in January, along with ValueAct’s support for the company’s recommended slate of board nominees. According to the Blackwells lawsuit, filed March 28 in Delaware chancery court, ValueAct was responsible in 2022 for managing more than $350 million in Disney pension fund assets and was paid “perhaps as much as $95 million in fees for its money-management services to Disney.” A Disney spokesman called Blackwells’ allegations “baseless” and a “desperate attempt to gain attention for their slate of director candidates,” saying ValueAct does not currently manage any of Disney’s pension funds (nor did it when Disney and ValueAct announced their agreement earlier this year).
With the vote Wednesday, all 12 current Disney directors were reelected:
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Disney CEO Bob Iger
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Mark Parker, chairman of the Disney board and executive chairman of Nike
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Mary Barra, chair and CEO of GM
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Oracle CEO Safra Catz
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Amy Chang, former senior executive at Cisco Systems and Google and current director of Procter & Gamble
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Carolyn Everson, former senior executive at Instacart, Meta and Microsoft and a current director of the Coca-Cola Co. and Under Armour
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Michael Froman, president of the Council on Foreign Relations and former vice chairman and president, strategic growth at Mastercard
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Maria Elena Lagomasino, CEO and managing partner of WE Family Offices and a former senior executive at JP Morgan Private Bank and Chase Manhattan Bank and a current director of the Coca-Cola Co.
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Calvin McDonald, CEO of Lululemon Athletica
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Derica Rice, a former senior executive at CVS Health and Eli Lilly & Co. and a current director of the Carlyle Group, Bristol-Myers Squibb and Target
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Morgan Stanley executive chairman James Gorman
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Former Sky chief Jeremy Darroch
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