US Markets
Wednesday, April 3rd, 2024 7:40 pm EDT
Key Points
- Disney shareholders reelected the entire board, delivering a significant defeat to activist investors Nelson Peltz and Ike Perlmutter, who sought change within the company, affirming the board’s decisions and CEO Bob Iger’s efforts to reinvigorate the media conglomerate.
- Despite significant mobilization of resources by Peltz-led Trian Partners and Blackwells, including support from proxy advisors and smaller institutional investors, Disney’s retail voters overwhelmingly backed the company, resulting in Peltz’s largest defeat ever. The proxy fight, characterized by substantial spending, ultimately secured backing from Disney’s largest shareholders, Vanguard and BlackRock.
- While Disney’s shares have surged since Peltz’s campaign began, the company still faces challenges, including ESPN’s subscriber decline, financial losses in its streaming business, and the search for a successor to Iger, further complicated by the board’s botched succession history, which Peltz leveraged against the company. Despite these challenges, Disney’s recent strategic moves, including exclusive streaming deals and investments, have garnered investor support, resulting in a 23% increase in its shares since the fiscal first-quarter earnings report.
Disney shareholders have reelected the entire board, securing a significant win against activist investors Nelson Peltz and former Marvel CEO Ike Perlmutter, who sought change within the company. The victory reaffirms the board’s decisions, including the reinstatement of CEO Bob Iger and his efforts to revitalize the media giant. Peltz’s Trian Partners aimed to remove directors Maria Elena Lagomasino and Michael Froman, citing share underperformance, a flawed succession process, and misdirected investments. Despite significant support from proxy advisors and smaller institutional investors, Peltz lost to Lagomasino by a considerable margin, marking his largest defeat to date. Additionally, Blackwells, another activist group, failed in its attempt to secure board seats. Disney mobilized considerable resources during the proxy fight, garnering support from influential figures like George Lucas, Jamie Dimon, and Laurene Powell Jobs. Although Peltz and his firm won’t join the board, they claimed credit for Disney’s share rebound. However, Disney spent an estimated $40 million to fend off Peltz’s challenge, ultimately securing backing from its largest shareholders, Vanguard and BlackRock. While Peltz’s campaign led to significant gains in Disney’s shares, challenges remain, particularly regarding ESPN’s subscriber decline and the search for Iger’s successor. Major proxy advisors expressed concerns over Disney’s succession planning, despite the company’s efforts to address operational and financial weaknesses. Disney’s recent strategic investments and exclusive streaming deals, including Taylor Swift’s concert film and a partnership with Epic Games, have bolstered investor confidence, leading to a 23% increase in Disney’s shares since its fiscal first-quarter earnings report.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/03/disney-annual-meeting-shareholders-vote-on-nelson-peltz-and-bob-iger.html
