Disney Fends Off Nelson Peltz After Bitter Proxy Fight As Shareholders Back Company Board

Jill Goldsmith
·4-min read

Disney has succeeded in barring Nelson Peltz from its board of directors as shareholders at the company’s hotly anticipated annual meeting today voted in its slate of 12 nominees, fending off outsiders. It was a months-long bitter and costly fight.

The numbers are preliminary with official results still to be announced, but Disney said its full board slate was elected “by a substantial margin” over the nominees of Trian Group and Blackwells. Trian, Peltz’ investment firm, nominated the activist investor along with former Disney executive Jay Rasulo for the board. Another firm, Blackwells, had three nominees that never got much traction.

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According to a few stats Disney provided, this was Peltz’ biggest-ever loss in a proxy fight — and he’s engaged in a few. Peltz received less than 31% of the vote. CEO Bob Iger, also on the board of course, had 94% support.

Peltz lost to Disney director Maria Elena Lagomasino by two to one, and Rasulo lost to her by 5 to 1. Trian had advised shareholders to withold votes from Lagomasino.

In a key show of support, some 75% of Disney’s large retail shareholder base backed the company’s slate. Disney has a few big institutional investors but some 40% of the stock is owned by individuals, a big swing factor here.

“I want to thank our shareholders for their trust and confidence in our Board and management. With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” said Iger.

Most voting closed last night. Reports this week had Disney ahead but there were times earlier when the race felt close. The official victory is a massive relief to the board, to Iger and to Disney, which spent about $40 million convincing shareholders to keep Peltz away as the two sides went after each other with videos, town halls, white papers, graphics, phone calls, emails, mailings and SEC filings.

Disney insisted Peltz brought nothing to the table strategically and would be a big distraction for management at delicate moment for the company and in a complex media landscape. It also slammed Peltz’ ties with Ike Perlmutter, who contributed his significant stake in Disney to Trian’s efforts. Disney said the businessman who sold Marvel to Disney had clashed with Iger, was fired, and had a personal grudge against Iger.

Peltz pushed back on all of it. His best argument was that the board needed oversight on succession planning as it looks for new CEO after a botched job last time. Disney says the search is on and going well. Peltz had also tried halfhearted and unsuccessfully to position his campaign as one against the board, not against Iger, who, as the number today shows shows, has broad support.

“We are immensely grateful to our shareholders for their investment in Disney and their belief in its future, particularly during this period of great change in the broader entertainment industry. We are fortunate to have a highly qualified Board of Directors who possess a profound commitment to the enduring strength of this company and an enormous amount of experience and expertise, including succession planning. I’m thankful for Bob and his exceptional management team, as well as Disney’s employees and Cast Members around the world, for continuing to deliver for consumers and shareholders throughout this distracting proxy battle,” said Disney chairman Mark Parker.

Along with Parker, Iger and Lagomasino, the Disney board includes Mary T. Barra, Safra A. Catz, Amy L. Chang, D. Jeremy Darroch, Carolyn N. Everson, Michael B.G. Froman, James P. Gorman, Calvin R. McDonald and Derica W. Rice.

This was Trian’s second tussle with Disney. It started a proxy fight before last year’s annual meeting but backed down. This time it went the distance. Speaking before results of voting were announced, Pelt said that “Regardless of the outcome of today’s vote, Trian will be watching the company’s performance.”

After the results. he said Trian was “disappointed.” But he also took some credit for “a host of new operating initiatives and capital improvement plans” during his firm’s re-engagement with Disney. The company has said all decisions were organic, nothing to do with Peltz.

Disney’s stock is down more than 2% after the vote.

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