Walt Disney Inc., the entertainment powerhouse, has successfully defended its board against activist investors Nelson Peltz and Ike Perlmutter. The entire board was reelected by shareholders, marking a win for Disney.
Both Peltz, former Marvel CEO, and Perlmuter aimed to secure seats on the board. However, during the annual shareholder meeting, it was announced that the existing board would remain, following a voting procedure which favored the current Disney board overwhelmingly. It was reported that around 75% of retail shareholders supported the standing board.
This resolution puts an end to an extended dispute, endorsing the board's decisions including CEO Bob Iger's reinstatement. Representing Trian Partners, Peltz attempted to displace two directors, Maria Elena Lagomasino and Michael Froman, attributing consistent underperformance in share value, an erroneous succession strategy, and substantial failed investments as his reasons.
However, Lagomasino won against Peltz by a good measure, with retail voters predominantly backing Disney. This resulted in Iger securing 94% of the total vote. Another Trian nominee, former Disney CFO Jay Rasulo, was defeated even more decisively.
In addition, Blackwells, another activist group, was also unsuccessful in acquiring board seats. Disney's victory provides short-term relief to the company's senior management, concluding months of uncertainty and disruption for Iger and his team. However, the company will need to deliver results, as they navigate the shift of consumers moving away from traditional cable packages to less profitable streaming services.
Interestingly, Disney's two largest shareholders, Vanguard and BlackRock, sided with the management in the events leading up to the shareholders' meeting. Disney had previously criticized Trian's proxy battle as being disruptive and damaging, hinting that Peltz's motivations might be more rooted in personal interests than in Disney's welfare.
