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Disney Wins Board Vote Against Trian Fund Management, Blackwells Capital

Disney and CEO Bob Iger have survived a shareholder revolt from Trian Fund Management and Blackwells Capital. The company’s shareholders on Wednesday voted “by a substantial margin” to elect Disney’s full slate of nominees to the board, according to chief legal and compliance officer Horacio Gutierrez.

The decision, made at Disney’s annual meeting Wednesday, ends a months-long proxy campaign by activist investors to replace some Disney board members and push Iger to accelerate initiatives to improve Disney’s stock price and overall financial performance.

Trian had nominated its co-founder Peltz and former Disney Chief Financial Officer Jay Rasulo to stand election. For its part, Blackwells nominated former Warner Bros. and NBCUniversal executive Jessica Schell, Tribeca Film Festival co-founder Craig Hatkoff and TaskRabbit founder Leah Solivan.

According to the preliminary results, Iger won with 94% of votes cast in his favor, while Peltz received less than a third of that at just 31%. Maria Elena Lagomasino, a current board member Trian was attempting to oust, beat Peltz by twice as many votes and Rasulo by five times as many votes. About 75% of retail shareholders voted for the Disney slate. Disney has approximately 1.83 billion outstanding shares.

“This is the biggest loss ever for Nelson Peltz in a proxy fight,” an individual familiar with the matter told TheWrap.

In addition to the board election, shareholders also rejected Trian’s proposal to repeal amendments made to Disney’s bylaws in November and Blackwells’ proposal to increase the size of the company’s board.

“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,” Iger said after the vote.

The official results will be released in an 8-K filing with the U.S. Securities and Exchange Commission within the next four business days. Each director holds office for a term of one year.

During Wednesday’s meeting, Peltz made a final appeal to shareholders in a three-minute address in which he noted that Trian had invested more than $3.5 billion in Disney.

“All we want is for Disney to get back to making great content and delighting consumers, and for Disney to create sustainable long term value for all its shareholders,” Peltz said. “While the last few months have been great for the stock, the longterm track record still remains disappointing. We continue to believe that the board bears responsibility for this track record.”

In a statement after the vote, Trian said it was disappointed but “proud of the impact we have had in refocusing this Company on value creation and good governance.”

“We will be watching the Company’s performance and be focusing on its continued success,” the firm added.

In its statement, Blackwells said its “primary objective was achieved – keeping Nelson Peltz out of the Disney Boardroom.”

Blackwells added that Disney “showed that needs to be more focused on transparency and truly acting in the best interest of all its shareholders.” The firm noted that the Disney board’s “ongoing refusal” to publicize details around its information-sharing agreement with ValueAct Capital “remains a serious issue.”

Blackwells said it would continue to pursue litigation “to ensure there is a resolution that benefits shareholders and enforces governance best practices.”

Disney’s board had previously rejected Trian and Blackwells’ nominees, arguing they lacked the “appropriate range of talent, skill, perspective and/or expertise to effectively support Disney’s building priorities in the face of continuing industry-wide challenges.” The board also said Peltz and Rasulo had a “track record of value destruction.”

Instead, it urged shareholders to vote for its own slate of 12 nominees, including Iger, Lagomasino, Mary Barra, Safra Catz, Amy Chang, Carolyn Everson, Michael Froman, Calvin McDonald, Mark Parker, Derica Rice and recent appointees James Gorman and Jeremy Darroch.

“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,” Disney board chairman Mark Parker said in a statement. “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.”

The House of Mouse’s recent strategy has focused on restoring the company’s cash dividend, increasing that payment by 50%, announcing a $3 billion share buyback program for fiscal year 2024, and investing $60 billion in its theme parks over the next decade. Disney also says it is on track to meet or exceed $7.5 billion in cost savings, reach streaming profitability and deliver $8 billion in free cash flow by the end of fiscal year 2024.

Disney is also buying out Comcast’s minority stake in Hulu for at least $8.61 billion, officially launched a Hulu and Disney+ combined app offering, inked an $8.5 billion deal with Mukesh Ambani’s Reliance Industries for a joint venture that will combine Viacom18 and Star India, and plans to launch a fully direct-to-consumer version of ESPN in fall 2025 along with a sports streaming joint venture with Fox and Warner Bros. Discovery this fall. On the content side, it obtained the streaming rights to Taylor Swift’s Eras Tour concert film, announced sequels to “Moana” and “Zootopia” and took a $1.5 billion stake in “Fortnite” creator Epic Games with plans to create a Disney content metaverse.

Iger, who has extended his contract as CEO through the end of 2026, has previously said he will “definitely step down” at the end of that term, and that a “robust” succession process is underway.

In addition to the Trian and Blackwells proposals, shareholders voted approve the appointment of PwC as the company’s independent registered public accountants, Disney’s executive compensation packages, and its amended and restated 2011 stock incentive plan, which would increase the number of shares of Disney common stock authorized for issuance by 115 million shares.

They also rejected a proposal that the Disney board must seek shareholder approval on golden parachutes with an estimated total value exceeding 2.99 times the sum of an executive’s base salary plus target short-term bonus.

Disney shares, which fell over 3% following the announcement, are up 31% year to date and 49.8% in the past six months.

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