Disney Slams Activist Investor Nelson Peltz Nominee’s ‘Track Record of Value Destruction’

The company ramps up its proxy battle defense by criticizing Peltz and Blackwells Capital in a letter to shareholders

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Disney CEO Bob Iger and activist investor Nelson Peltz (Credit: TheWrap/Chris Smith/Getty Images)

Disney swiped at dissident shareholder Nelson Peltz and his fellow nominee for the company’s board in a sharply worded letter to its stock owners posted late Monday.

Disney used the letter to slam Peltz’ sale of a portion of Trian Asset Management’s shares of the company last year, which caused his clients “to miss out on
the recent appreciation of Disney’s stock price,” and questioned the qualifications of former Disney CFO Jay Rasulo, who Trian is backing for a board seat.

“Rasulo, the letter said, “has a track record of value destruction – during his tenure on the Board of Directors of iHeartMedia, the stock price declined by 87%.”

Meanwhile, the entertainment giant said, the two directors that Trian targeted for replacement outshine Peltz and Rasulo, the letter said.

The letter defended Maria Elena Lagomasino, founder of the Institute for the Fiduciary Standard, a think tank and CEO of WE Family Offices, noting that her business managements $14 billion in assets, while Peltz’ Trian “manages roughly half that amount.”

It also hailed Michael Froman, a former Mastercard executive and White House adviser who is currently president of the Council on Foreign Relations, as someone who “provides invaluable insights on complex geopolitical issues and associated risks and opportunities with our international parks, distribution licenses and international markets and other key issues surrounding our global operations.” Neither Petlz nor Rasulo “have any such experience or qualifications in this vitally important area,” the letter said.

The letter is the latest salvo between Disney, Trian and Blackwells as the annual meeting approaches. In addition to the personal jabs over Trian’s nominees, it also offered a point-by-point challenge to various claims from Peltz, noting that it restored investors’ dividends as of January, targets $3 billion in stock buybacks this year and is on track to meet or exceed $7.5 billion in cost cutting by the end of its fiscal year – $2 billion more than initially targeted.

Disney also repeated that it expects its streaming service to be profitably by its fourth quarter and deliver double digit profit margins in the future, and that it is investing $60 billion over 10 years in its parks and cruise line.

The entertainment giant also criticized Blackwells Capital, which on Monday pitched heavier investment in artificial intelligence and spatial computing as part of the answer to turning Disney’s fortunes around, criticizing its spending in these areas as “anemic.”

Blackwells has its own slate of nominees for Disney’s board: Tribeca Film Festival co-founder Craig Hatkoff, former Warner Bros. and NBCUniversal executive Jessica Schell TaskRabbit founder Leah Solivan, but has told shareholders to ignore Peltz’s nominees.

In its letter, Disney called Blackwells “a recent investor in Disney” with “just 157,131 shares” and maintained that its nominees “are also unqualified for election to Disney’s Board.”

“Its financial engineering ‘program’ largely consists of spinning off our land and hotels into a separate real estate investment trust and breaking up the remainder of the company into separate entities, demonstrating a complete misunderstanding of Disney’s strengths derived from the synergies across our businesses,” the letter said.

Shareholders have been targeted for the past few months with various appeals for their votes from the company, Trian and Blackwells. Proxy cards for all three slates of directors used for voting at the virtual annual meeting have been sent out, and the appeal are becoming more urgent as the meeting, and the final count, approaches.

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