Trian Fund Management has nominated Nelson Peltz for election to Disney’s Board of Directors at the Annual Meeting. The move comes after Trian launched a campaign called Restore the Magic that seeks to get Peltz on the Board against Disney’s wishes. Trian says that they have approximately 9.4 million shares of The Walt Disney Company worth approximately $900 million.
While Trian is complimentary of Disney’s “unrivaled global scale, irreplaceable brands, and opportunities to monetize its intellectual property”, they say that recent share price and performance is disappointing. They note that the shares are trading at a nearly 8-year low despite the return of Bob Iger as CEO. Trian says that they are not looking to replace Bob Iger at the helm, but simply place Peltz on the Board. Here are the top-level takeaways from Trian’s press release:
Disney has responded to Trian’s attempted placement of Peltz on the Board:
Trian Partners L.P. and Trian Partners Parallel Fund I, L.P., wholly owned subsidiaries of Trian Fund Management, L.P., along with other entities affiliated with Nelson Peltz (collectively, the “Trian Group”), have nominated Nelson Peltz for election as director at the Annual Meeting in opposition to the nominees recommended by the Board, and brought a proposal to amend Disney’s Bylaws.
The Walt Disney Company remains open to constructive engagement and ideas that help drive shareholder value. While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote FOR all the Company’s nominees.
The Walt Disney Company has had a long-term track record of financial and creative success, built on the ability to leverage its rich intellectual property and unparalleled storytelling across its many businesses, from theatrical, streaming and linear broadcast to parks and resorts, and one of the most resonant names in sports, ESPN. Mr. Iger’s mandate is to use his two-year term and depth of experience in the industry to adapt the business model for the shifting media landscape, rebalancing investment with revenue opportunity while bringing a renewed focus on the creative talent that has made The Walt Disney Company the envy of the industry. Mr. Iger has already taken decisive steps to realign content creation and distribution, and reposition Disney’s streaming platforms and linear broadcast and cable networks for enhanced profitability for the Company.
Under Mr. Iger’s first tenure as CEO from September 2005 through February 2020, the Company’s total shareholder return was 554%, which exceeded the S&P 500 total shareholder return of 244%. The company’s market capitalization grew nearly fivefold during his tenure from $48 billion to over $230 billion.
The Board of The Walt Disney Company has been continually refreshed, with a focus on directors whose industry experience is additive to the company’s strategic priorities. The average tenure of the current Board is four years, with three directors serving fewer than two years, and in addition the Board is led by an independent chairman.
The Company expects to file preliminary materials with respect to the 2023 Annual Meeting of Stockholders shortly and looks forward to communicating with its stockholders once definitive proxy materials are available. The date of the Annual Meeting has not yet been announced.
The Board is nominating for re-election at the Company’s Annual Meeting incumbent directors Mary T. Barra, Safra A. Catz, Amy L. Chang, Francis A. deSouza, Carolyn Everson, Michael B.G. Froman, Robert A. Iger, Maria Elena Lagomasino, Calvin R. McDonald, Mark G. Parker and Derica W. Rice.
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