April 20, 2024

The outcome of the months-long and expensive proxy battle between Disney, led by its CEO Bob Iger, and activist investor Nelson Peltz will be revealed Wednesday at the media giant’s annual shareholders meeting.

The two sides have faced off in a fierce showdown over the control of two seats on Disney’s board and the future of the 100-year-old company.

Disney announced its 12 board nominees in January, including Iger. A few days later, Trian Partners — which owns a roughly $3.5 billion stake in Disney — formally nominated its co-founder Peltz and ex-Disney CFO Jay Rasulo for board seats.

Trian Partners released a 133-page paper in March outlining Peltz’s plans for the company, which include completing a successful CEO succession, aligning performance-based compensation with shareholder value, and developing a strategy to reach margins similar to Netflix’s 15-20% by 2027.

Disney responded to his bid by launching a website asking shareholders to not vote for the investment firm’s candidates. “Nelson Peltz has a long history of attacking companies to the ultimate detriment of shareholder value,” the company said in a video on the website.

The company further bashed Peltz in March. “The surest way to impede our creative progress is oversight from an 81-year-old hedge fund manager with no creative experience,” Disney said in response to comments Peltz made in an interview with The Financial Times.

Peltz criticized the track record of Marvel Studios President Kevin Feige in the interview, while specifically taking shots at the studio’s movies The Marvels and Black Panther.

He went on to say, “Why do I have to have a Marvel 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?”

A referendum on Iger’s leadership

The proxy battle, which The Wall Street Journal reports could be the most expensive in history, has also become referendum on Iger’s leadership.

Iger, who has been with the media giant for four decades, served as CEO of the company from 2005 to 2020. He was elevated to executive chairman before retiring in 2021. Iger returned to the company just a year later to serve a two-year term, which has since been extended. His eventual succession has become a key sticking point in the proxy fight.

JPMorgan Chase CEO Jamie Dimon, Star Wars creator George Lucas, and even some Disney heirs have all endorsed the company’s candidates while praising Iger.

In a statement last month, Trian said it “supports Mr. Iger as a candidate for the Board and as CEO.” The firm added that “this campaign is not about Mr. Iger, nor is it a referendum on his leadership.” Despite that statement, CNBC reports that Trian has withheld its votes for Iger.

Who shareholders are voting for

The investment firm BlackRock, the company’s second-largest shareholder, has cast its votes for Disney’s picks. BlackRock owns about 78 million shares in the company, or the equivalent of $9.5 billion.

Baltimore-based money manager T. Rowe Price — which owns 9.3 million Disney shares — also said it would support Disney, joining Lucas, former Disney CEO Michael Eisner, and Laurene Powell Jobs.

Peltz and Rasulo have received votes from the nation’s largest public pension fund, the California Public Employees’ Retirement System (CalPERS), and the global asset manager Neuberger Berman.

This is a developing story and will be updated.

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