Bob Iger Wins, Handing Nelson Peltz Defeat

In a win for The Walt Disney Co. and CEO Bob Iger, Disney says that all of its director nominees have been elected by shareholders, rebuffing the activist investor Nelson Peltz, who had been running a high-profile campaign to put himself and former Disney CFO Jay Rasulo on the company’s board.

Disney announced the preliminary result at the end of its annual shareholder meeting Thursday, noting that final results will be filed with the SEC later.

Peltz’s Trian Partners had been seeking to oust Disney directors Maria Elena Lagomasino and Michael Froman, replacing them with Peltz and former Disney CFO Jay Rasulo.

A source says that Iger secured 94 percent of the vote for his board seat. Lagomasino beat Peltz by a margin of about two to one, with the activist securing about 30 percent of the vote for his seat. Rasulo lost his vote by a margin of five to one.

Disney has more retail shareholders than most public companies, which is why the campaign was so public. A source says that retail shareholders voted by a margin of about 75 percent to 25 percent to support Disney’s board.

In comments after the voting was closed, Iger said that he wanted to “take a moment to thank our shareholders for your trust and confidence in the Disney board and management and the ambitious strategy we’re implementing across our businesses to build for the future.”

“Now that this distracting proxy process is behind us, we’re here to focus 100% of our attention on our most important priorities, growth and value creation for our shareholders and creative excellence for our consumers,” he continued.

Peltz launched his activist campaign in January, nominating himself and Rasulo to be board members of the company. Peltz’s Trian Partners had previously led a proxy fight against Disney last year, but abandoned it in February after Iger announced a wholesale restructuring of the company, causing Disney’s share price to pop.

As the proxy fight went on, it became increasingly personal, with Disney releasing a political ad style video framing Trian as being disruptive to its turnaround plan. Trian subsequently released a statement saying the company was not taking on Iger, but the company’s board, though leaks revealed that Trian voted against Iger in its board vote.

Meanwhile, another activist, Blackwells Capital, also proposed its own slate of directors, though its relatively modest Disney holdings, and its focus on attacking Peltz (Blackwells founder Jason Aintabi has clashed with Peltz in the past) meant that they were not a factor in the proxy battle.

Peltz took aim at Disney’s sagging stock price (though it has been rising this year), and released a 130-page whitepaper outlining changes he wanted to make at the company, including “right-sizing” the film and linear TV businesses, and achieving Netflix-like margins in streaming as soon as possible. Trian also proposed to scale down ESPN’s direct-to-consumer ambitions.

But Peltz also told the FT that he had some issues with Disney content, telling the publication “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?”

During Disney’s shareholder meting, Peltz noted that Disney’s share price had been on the rise in recent months, and that the company had made positive changes, but that he still had issues with the board’s leadership.

“All we want is for Disney to get back to making great content and delighting consumers and for Disney to create sustainable long term value for all of its shareholders,” Peltz said. “We believe the board needs to continue to improve its focus alignment and accountability. And we hope it will.”

He added that Trian “will be watching the company’s performance.”

In the end, both sides secured significant backers, with Disney securing public statements of support from the likes of George Lucas, Michael Eisner, Laurene Powell Jobs, and perhaps most notably the families of Walt and Roy Disney, who called the activists “wolves in sheep’s clothing.”

Trian, meanwhile, secured a reccommendation from the influential advisory firm Institutional Shareholder Services, as well as California’s pension administrator CalPERS. However, that support was not enough for the activist.

“I want to thank our shareholders for their trust and confidence in our Board and management,” said Iger in a statement. “With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers.”

“While we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders,” Trian said in a statement. “We are proud of the impact we have had in refocusing this Company on value creation and good governance. Since we re-engaged with the Company in late 2023, Disney has announced a host of new operating initiatives and capital improvement plans. The Board has been refreshed with two new directors. Over the last six months, Disney’s stock is up approximately 50% and is the Dow Jones Industrial Average’s best performer year-to-date.”