April 3 will make a significant day in the history of the Walt Disney Company. It’s not the day a new movie or ride at Walt Disney World will be released.
Instead, April 3 will make the Walt Disney Company’s Annual Shareholder meeting. Most years, there isn’t much news coming out of that meeting, but this year, it will end a year-long proxy fight with activist investor Nelson Peltz.
Mr Peltz and his Trian Partners are one of Disney’s largest shareholders, and for the past year, he has waged a proxy fight against Disney’s Board of Directors and CEO Bob Iger.
This will come to a head this week with the Board meeting. So, who is Nelson Peltz, and what does he want from the Walt Disney Company?
So, here’s a look at Mr Peltz’s history with Disney and what exactly he’s after.
What Does Peltz Want?
Last February, billionaire investor Nelson Peltz tried to gain a seat on the Walt Disney Company’s Board of Directors. Eventually, he gave up his proxy battle when Disney CEO Bob Iger decided to eliminate 7,000 employees and save the company more than $5.5 billion in the process. But Peltz was looking for Disney to return the dividend to shareholders.
Disney CEO Bob Iger was able to defuse that situation earlier last year, but Peltz returned, and he owns even more of the Walt Disney Company.
Peltz’s Tiran Fund Management owns $2.5 billion or 1.6 percent of the company. A person familiar with Peltz’s thinking told the Wall Street Journal that Trian believes Disney’s shares are undervalued and the company needs a board that better aligns with shareholder’s values. Peltz has also teamed with former Marvel Studios boss Ike Perlmutter to allow Trian to control his shares.
Peltz is seeking two seats on the Disney Board of Directors, one for himself and one for former Disney CFO James Rasulo.
In response, Disney selected 12 people to sit on its Board, including Bob Iger, and urged investors to reject Peltz, claiming he has no media industry experience.
But then, last week, Blackwells Capital sued the Walt Disney Company, claiming that Disney had paid ValueAct Capital to back them in its proxy fight with Peltz.
The lawsuit comes from a January 3 announcement in which Disney said that ValueAct backed Bob Iger and his slate of directors. In exchange, Disney would “provide information to the investment firm and consult with ValueAct on strategic matters, including through meetings with the Disney Board and management.”
Blackwells Capital had backed Bob Iger in this fight but urged for new blood on the Walt Disney Company Board of Directors.
So, what do Peltz and his Trian Fund Management want? Other than the two seats on the Board, Peltz is looking for a change in direction for Disney.
This week, he gave an interview criticizing what he called Disney’s “woke agenda.” He complained that Disney and Marvel Studios made movies with an all-female and all-African-American cast. He specifically points to The Marvels (2023), which was Marvel’s biggest flop, and Black Panther (2018), which made $1.33 billion at the box office.
Disney’s Response
In response to the Proxy battle from Nelson Peltz and his Trian Fund Management, the Walt Disney Company has put out a full-court press to convince every shareholder to back Disney’s slate for the Board. Disney CEO Bob Iger has also received some high-profile endorsements.
Former Disney CEO Michael Eisner, who fought out his proxy battle in the 1980s, supported Iger and the current Disney Board of Directors. J.P. Morgan Chase CEO Jamie Dimon, Star Wars creator George Lucas, and Frozen’s Olaf, Josh Gad have all come out supporting Iger.
However, the most prestigious group back in Iger is represented by the grandchildren of Roy and Walt Disney, including Iger critic Abigail Disney. The nine Disney grandchildren sent a letter to shareholders, urging them to support Iger against what they called “hedge-fund billionaires.”
As the family of Walt Disney, we support the Walt Disney Company management and its board of directors, and oppose the nominations put forth by Nelson Peltz. There have been challenging times, but this current management has adjusted and grown through those challenges…What concerns us most about these hedge-fund backed opportunities is they have little or no knowledge of what Disney truly means to people like you.
To help alleviate some of the pressure on the company, Disney settled its lawsuit with Florida Governor Ron DeSantis and the Central Florida Tourism Oversight District this week. Both sides discuss the Walt Disney World Resort expansion plans in Central Florida.
More importantly, this will allow Iger to tell shareholders they no longer need to be concerned about the company’s flagship resort in Florida.
The Results
Before filing its lawsuit against the Walt Disney Company, Blackwells Capital filed a proxy statement with the SEC. It said:
The purpose of our campaign is simple: we want to ensure that Disney has the right collection of minds around the boardroom table, working constructively together to make decisions that will benefit ALL shareholders for decades to come. Disney may simply be too complex for any one successor to Mr. Iger to manage holistically, and Blackwells believes that it is the responsibility of the Board to oversee these types of analyses in the ordinary course.
Related: Too Big To Succeed: Disney’s Future Will Be As Three Separate Companies
Blackwells’ plan would divide Disney into three separate companies. One part deals with the “land” or theme parks Disney owns worldwide. The second would be for Disney’s various film production companies. The third would be for ESPN, taking it to a streaming-only platform.
The plan would sell off assets that do not fit into those three categories, including linear television networks like ABC, Disney Channel, and National Geographic.
Should Nelson Peltz and Trian Fund Management win their proxy battle, this is one possible plan for Disney. It would change the Walt Disney Company forever, and there’s no way of knowing if it will be for the best.
On the other hand, Disney has many problems, some of which are Iger’s doing. Changes will have to happen at Disney, and Iger is working on those now.
Either way, the Walt Disney Company will not be the same after April 3. Now, we just have to wait and see how it will go.
What do you think of Peltz’s proxy battle with Disney? Let us know in the comments.
Pelts is nothing more than a self centered narcissist who would willingly destroy what Walt Disney envisioned and built. It’s all for his own selfish gain and his need to control. People like him should be behind bars, not behind FAMILY businesses and parks
Change for change sake isn’t the right choice. Be careful what you wish for people.
If Peltz is for ending this “woke” nonsense then great, we need him. But if he is just another greedy rich elitist, then he is just as bad as what we have now.
The Disney greandchildren don’t impress me. I don’t believe they feel or have the same values as their greandfather Walt.