Technology
Thursday, January 18th, 2024 4:20 pm EDT
Key Points
- Trian Fund Management, led by activist investor Nelson Peltz, formally nominates Peltz and former Disney CFO Jay Rasulo to Disney’s board of directors.
- The proxy filing outlines initiatives and performance targets, including completing a successful CEO succession, addressing CEO Bob Iger’s retirement delays, and aligning management pay with performance.
- Trian aims to achieve “Netflix-like margins” of 15% to 20% by 2027, positioning Netflix as Disney’s major competition. The proxy battle coincides with Iger’s efforts to streamline Disney, rein in spending, and make Disney+ profitable, involving broad restructuring and layoffs. Peltz criticizes Disney’s board oversight, emphasizing the need for change, although Disney has rejected Peltz’s board nomination. Peltz also focuses on ESPN’s future, aiming for a detailed payback period and business plan, and calls for a board-led review of studio creativity to restore leadership accountability and reclaim Disney’s leading box office position. Peltz and Rasulo propose a clear vision for Disney’s theme parks, targeting high-single digit operating income growth. Peltz’s recent visit to Disney World prompts positive remarks about the experience and employees’ attitudes.
Activist investor Nelson Peltz, through his Trian Fund Management, has formally nominated himself and former Disney CFO Jay Rasulo to Disney’s board of directors. In a proxy filing, Peltz outlined several initiatives and performance targets they plan to pursue if elected. One key focus is ensuring a successful CEO succession, addressing the prolonged retirement delay by current CEO Bob Iger. Trian aims to align management pay with performance, criticizing Iger’s $31.6 million pay package amid Disney’s underperformance compared to the S&P 500 in 2023. Peltz identifies achieving “Netflix-like margins” of 15% to 20% by 2027 as a goal, considering Netflix as Disney’s major competition. While Iger attempts to streamline Disney and make Disney+ profitable, Peltz emphasizes his belief in the current board’s poor oversight. The proxy filing also highlights the future of ESPN as a priority, seeking a detailed payback period and business plan. Peltz calls for a board-led review of studio creativity to restore leadership accountability and regain the company’s leading box office position. Additionally, the filing outlines a clear vision for theme parks, targeting high-single digit operating income growth. Despite Disney’s rejection of Peltz’s board nomination, he reiterates his dissatisfaction with the current board’s media experience and emphasizes the need for change. Peltz and Rasulo’s proposed initiatives cover a wide spectrum, aiming to address corporate governance, financial performance, competition, and strategic planning across various Disney segments, from streaming services to theme parks and studio creativity.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/18/disney-proxy-fight-nelson-peltz-states-case-for-board-seats.html
