April 13, 2024

The ongoing proxy battle between Disney CEO Bob Iger and activist investor Nelston Peltz just took another turn.

Peltz, co-founder of the asset management firm Trian Partners, has secured a major endorsement from the proxy advisory firm Institutional Shareholder Services (ISS) in his quest to get a seat on Disney’s board. The endorsement comes less than two weeks before Disney’s annual shareholder meeting on April 3, where investors will vote for the for company’s board of directors.

The firm suggested shareholders support Peltz along with 11 of Disney’s 12 nominees.

“Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around. He could also help evaluate future capital allocation decisions,” ISS wrote in a 34-page report obtained by Quartz that it shared with investors today.

The nod by the ISS is especially welcome news for Peltz: The group is remarkable effective in backing winning candidates for board seats. A 2023 report from Barclays found that about 75% of nominees endorsed by ISS end up getting elected.

Iger vs. Peltz

Peltz has been on a tear to snag himself — for the second time — and former Disney CFO Jay Rasulo a seat on the company’s board.

Trian Partners, which owns about $3.5 billion of Disney stock, released a 133-page paper this month outlining Peltz’s plans for the company, which include a restructuring of leadership, aligning performance-based compensation with shareholder value, and developing a strategy to reach margins similar to Netflix’s 15% to 20% by 2027.

“[D]espite its many advantages, Disney has lost its way. Disney fell from its #1 position at the box office, was late to enter the streaming business and doubled down on linear TV at the wrong time,” Trian said in a letter sent to Disney shareholders on Monday.

The investment firm Blackwells Capital has also nominated three candidates for the board.

But Bob Iger isn’t backing down yet. Iger and Disney’s nominees have received endorsements from another major proxy advisory firm, Glass Lewis, along with heavyweights like JPMorgan Chase CEO Jamie Dimon and nine Disney grandchildren.

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