Los Angeles, CA – Disney shareholders voted on Wednesday to reject board nominees aligned with activist investor Nelson Peltz. This decision marked the end of a contentious proxy battle that revolved around Disney’s adaptation to the changing landscape brought on by the streaming era.
Instead of Peltz’s nominees, a majority of shareholders supported a 12-person slate of board nominees put forth by Disney at its annual shareholder meeting. Trian Partners, Peltz’s hedge fund, had used its position as one of Disney’s largest shareholders to lead a public campaign criticizing the company’s growth strategy and advocating for a plan for the succession of current CEO Bob Iger, who is 73 years old.
During a recent investor conference, Iger countered Peltz’s campaign by highlighting Disney’s strong stock performance and dismissing the activist investor’s efforts as a distraction. Despite disruptions in various business sectors, Iger emphasized the need for extensive knowledge, time, and focus to navigate through these challenges effectively.
Peltz, 81, aimed to secure board seats for himself and former Disney Chief Financial Officer Jay Rasulo. They sought to replace current board members Maria Elena Lagomasino and Michael Froman. The proxy battle unfolded amidst the media industry’s shift towards streaming, causing upheavals due to cord-cutting and declining movie theater attendance.
In response to the activist campaign led by Trian Partners, Iger acknowledged Disney’s ongoing transformation to address the challenges posed by the streaming landscape. Disney+, which launched five years ago, has garnered 111.3 million subscribers. However, the platform experienced a decline of 1.3 million subscribers in the final quarter of 2023, as indicated in the company’s quarterly earnings report released in February.
To mitigate streaming-related financial losses, Disney implemented cost-cutting measures, resulting in a $300 million reduction in losses over a three-month period. These efforts have facilitated a 23% increase in Disney’s stock price since October, although it remains 30% below its peak in March 2021.
Additionally, the issue of succession has been a focal point of contention in the proxy battle. Iger, who returned as CEO in 2022 under an agreement to step down after two years, later extended his contract through 2026. Trian Partners has urged Disney to clarify its succession process and conduct an exhaustive search for Iger’s successor, according to statements on their campaign website.
Reflecting on his contract extension, Iger underscored the importance of a seamless succession process. As Disney continues to evaluate potential internal and external candidates, Iger remains committed to ensuring a successful transition within the company.