Disney Shareholders Meeting: CEO Bob Iger Rejects Challenge from Activist Investor Nelson Peltz, Seats Allies on Disney Board

Disney shareholders on Wednesday rejected board nominees allied with activist investor Nelson Peltz, ending a months-long combative proxy battle focused on navigating the company into the dawn of the streaming era.

Instead, a majority of shareholders voted in favor of a slate of 12 board nominees submitted by Disney, the company announced at its annual shareholder meeting.

Trian Partners, the hedge fund founded by Peltz, took advantage of its position as one of Disney’s largest shareholders to run a high-profile campaign critical of the company’s growth strategy and insisted on a plan for a successor to the current one. 73 years old. Bob Iger, CEO.

Addressing the activist push at a Morgan Stanley investor conference earlier this month, Iger touted a strong recent performance in stocks and dismissed Peltz’s campaign as an effort “designed to distract us.”

“Obviously many of the companies are experiencing the effect of disruption,” Iger added. “It’s something that requires not only a significant amount of knowledge, but also an enormous amount of time and concentration.”

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Peltz, 81, sought board positions for himself and former Disney CFO Jay Rasulo. They asked shareholders to give them the seats currently occupied by María Elena Lagomasino and Michael Froman.

Through a website dedicated to the activist campaign, titled “Restore the Magic,” Trian Partners calls on Disney management to “develop and articulate” a clear streaming strategy that can achieve “Netflix-like margins.”

Outlining a series of reforms, the website calls for cost cuts for the streaming business, a complete overhaul of the creative process and an emphasis on acquiring new intellectual property.

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Disney+ has amassed 111.3 million subscribers in about five years since its launch, although the platform lost 1.3 million subscribers in the final three months of 2023, February quarterly earnings showed.

The company said in the earnings report that it reduced streaming-related financial losses by $300 million over the three-month period, staying on track to cut $7.5 billion in costs by the end of fiscal 2024.

The cost cuts have helped boost Disney’s share price by 23% from a recent low in October, but the price is still 30% below the high reached in March 2021.

The issue of succession is another key point of contention in the proxy fight.

During Iger’s first stint as Disney CEO, from 2005 to 2020, he managed to delay his departure several times. He returned to the position in November 2022 under an agreement to leave again after two years, but months later the company announced a contract extension until 2026.

Trian Partners has urged the company to clarify its succession process and launch a thorough search for Iger’s replacement, the activist campaign website says.

Upon receiving his contract extension almost a year ago, Iger emphasized in a statement his commitment to a smooth succession.

“The importance of the succession process cannot be understated, and as the Board continues to evaluate a highly qualified list of internal and external candidates, I remain intensely focused on a successful transition,” Iger said.

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