Walt Disney Co.’s activist investor Nelson Peltz has been engaged in a months-long struggle for a board overhaul at the company. The outcome of a shareholder vote to elect board members is anticipated to be disclosed at Disney’s annual stockholders meeting on Wednesday. Although voting formally concludes on the day of the meeting, sources have indicated that enough votes have been cast as of Tuesday evening to likely thwart Peltz’s efforts.
Disney’s three largest institutional investors—Vanguard, BlackRock, and State Street—hold significant sway in this struggle. Reports suggest that BlackRock and Vanguard have sided with Disney’s existing board, while State Street’s stance remains undisclosed.
T. Rowe Price, a smaller Disney shareholder, has also voiced support for the company’s current management. “We are confident that management has a viable plan to address the important matters facing the company,” a spokesperson for the investment firm stated.
This showdown arrives at a crucial juncture for Disney as it grapples with the shift in consumer preferences towards streaming services, as well as questions regarding succession, with CEO Bob Iger’s contract set to expire in 2026.
Peltz, who recently garnered support from influential proxy advisory firm Institutional Shareholder Services (ISS), aims to secure board seats for himself and former Disney CFO Jay Rasulo. Trian Fund Management, Peltz’s hedge fund, holds $3 billion worth of common stock in Disney.
Peltz seeks to replace two existing board members, citing reasons such as substantial shareholder value loss, a decline in earnings estimates, and underwhelming studio content.
In response, Disney has defended its current board members, asserting their value and engagement. The company claims to have made significant strides in revitalizing its business, including introducing an ad-supported tier for Disney+, hiking prices across streaming services and theme parks, and cracking down on password sharing.
Investors have responded positively to these changes, propelling Disney’s stock up by over 30% this year.
Succession planning remains a contentious issue, particularly in light of past leadership turmoil. ISS emphasized the need for tangible progress in this area to instill investor confidence in Disney’s future stability.
Outside of ISS, Peltz has garnered support from various shareholders and activists, while Disney has received endorsements from prominent figures like George Lucas and Laurene Powell Jobs.
Amidst the proxy battle, Disney also faces pressure from activist Blackwells Capital, advocating for the election of its three nominees to the board.
