Disney to Hold Vote on Controversial Activist Investor’s Proposals This Spring

The entertainment giant urged shareholders to nix Nelson Peltz’s effort to obtain a seat on Disney’s board at April 3 annual meeting

bob iger
Disney CEO Bob Iger (Getty Images)

Nelson Peltz will get his showdown on April 3.

That’s when Disney will hold its annual shareholder meeting, with the big question whether investors will accept the activist investor’s argument that the House of Mouse is not doing everything it can to maximize shareholder value.

Disney implored investors to reject Peltz’s proposals, which would give him the seat now held by longstanding board member Michael B.G. Froman, a Mastercard executive, and to vote against a proposal that would require the company to produce a report the company’s reliance on its operations in China.

In its letter to shareholders, Disney wrote Peltz “has demonstrated that he does not understand Disney’s businesses” and that he “lacks the perspective and experience to contribute to the objective of delivering shareholder value in a rapidly shifting media ecosystem.”

Peltz, CEO of Trian Fund Management, last week wrote an open letter to shareholders targeting Froman’s seat for himself and insisting that Disney needs new leadership to restore the stock’s value.

Trian, which owns about 9.4 million shares of Disney, is campaigning to “Restore the Magic” through the proxy fight, following a multiyear decline in the stock price and the elimination of shareholder dividends.

Disney shares were trading midday Tuesday down 30 cents, at $109.57. The stock is up about 23% since the start of the year, but still trading 44% below the peak $197.16 it hit in March 2021.

In the proxy statement sent to shareholders and filed with regulators, Disney warned shareholders to watch out for solicitation materials from Peltz and Trian, which may cause some confusion.

Shareholders will also vote on several other proposals, including Disney’s slate of board nominees and approving executive compensation for the next year.

The proxy materials show former CEO Bob Chapek, who was ousted in in a surprise move that brought his predecessor, Bob Iger, back to lead the company in November, took home $24.2 million in salary, bonuses and perks in 2022, including $5.7 million in stock awards. Iger took home $15 million, half of which was paid in stock awards.

“While remaining focused on the ongoing evolution of our core operating model, the Board gave Bob [Iger] a dual mandate for his two-year term to rebalance investment with return opportunity while retaining the focus on the creative talent that defines Disney and to assist the Board in ongoing leadership succession planning,” Disney’s letter to shareholders states.

“We are confident that Bob’s deep understanding of the Company and industry through his four decades of experience at Disney, including 15 years as CEO, positions him well to set the strategic direction for our continued value creation, which he has a strong track record of delivering.”

Iger is also working with the board to identify and develop a successor CEO, the letter stated.

Peltz, in his letter last week, charged that the current Disney board has failed to instill a “culture of accountability” by overpaying executives and failing to align incentives with shareholders by personally owning stock. He also criticized Disney’s succession planning, stating that the board failed to “properly plan for leadership succession by leaving the company unprepared to pivot to the next generation of executives when the need for change was evident.”