Nelson Peltz, the activist investor and co-founder of Trian Group, is making waves as he throws his support behind Disney’s CEO, Bob Iger. However, Peltz has clarified that the ongoing proxy fight is not about Iger but rather about the composition of Disney’s board and the need for change to improve the company’s financial returns.
Battling for Change
Peltz’s Trian Group has been aggressively campaigning to secure two seats on Disney’s board. In a recent statement, Peltz emphasized that their battle is not a dispute with Bob Iger but rather a push for board composition reform. Trian believes that the current board has not lived up to its responsibilities, particularly in CEO succession planning. They argue that the board’s decision to appoint and then later dismiss Bob Chapek as CEO without proper vetting demonstrates a lack of oversight. Ultimately, Iger had to be called out of retirement to fill the void.
Fanning the Flames
Disney has not taken Peltz’s campaign lightly, labeling it as “disruptive and destructive.” They claim that Peltz’s actions are driven by personal agendas, particularly from ex-Marvel Entertainment chairman Ike Perlmutter, who holds a significant stake in Disney through Trian. Disney terminated Perlmutter’s employment last year, further adding to the tensions. Despite Disney’s opposition, Peltz’s campaign has gained traction, with support from notable figures like George Lucas, Laurene Powell Jobs, and former Disney CEO Michael Eisner.
The Battle for Board Seats
Shareholders are now faced with the task of voting for either Disney’s lineup of 12 board members, two nominated by Trian Group (including Peltz and ex-Disney CFO Jay Rasulo), or three candidates from investment firm Blackwells Capital. Trian highlights that Disney, as a highly influential consumer entertainment company, has failed to live up to its potential, costing shareholders over $200 billion in value. They urge shareholders to vote for Peltz and Rasulo and withhold support for incumbent directors Maria Elena Lagomasino and Michael Froman.
The Need for Change
Trian believes that reelecting the current Disney board will lead to more of the same: questionable strategic decisions, poor compensation alignment, and suboptimal succession planning. They argue that the board lacks focus, accountability, and alignment, despite its members’ professional accomplishments. Trian points to the investment of $200 billion without any discernible return, the misalignment of executive compensation with shareholder value, and underwhelming financial results in recent years compared to five years ago.
Disney’s annual shareholder meeting is scheduled for April 3, where these rival board candidate slates will be put to a vote. It remains to be seen if Peltz’s advocacy for change will prevail.
For more information, you can read the full letter from Trian Group here.