Disney (DIS) has successfully fended off activist investor Nelson Peltz in his quest to secure board seats at the company, officially ending a highly contested proxy battle that has plagued the entertainment giant and its CEO Bob Iger for months.
The company said Wednesday at its annual shareholder meeting that the current Disney board will remain intact following a shareholder vote that gave the company’s slate a win “by a substantial margin.” About 75% of retail shareholders voted in favor of Disney’s current board, according to a source familiar with the situation.
The results represent a win for Disney in the short term as it ends months of uncertainty and distraction for Iger and the company’s management team. But it also means Disney’s board will face much more pressure to deliver results as the company attempts to navigate consumers’ shift away from traditional cable packages into mostly unprofitable streaming services.
Along with its defeat of Peltz, who had fought for seats for himself and former CFO Jay Rasulo, Disney also defeated activist Blackwells Capital, which had urged shareholders to add its three nominees to the current board.
Disney’s stock traded lower following the results, with shares closing down more than 3%.
“Trian and Blackwells have added urgency to the turnaround, but not substance,” Needham analyst Laura Martin wrote in a note to clients ahead of the results. “DIS will remain under pressure to drive shareholder upside going forward.”
Disney had received support from high-profile proxy firm Glass Lewis, in addition to the backing of notable names like JPMorgan CEO Jamie Dimon; filmmaker and “Star Wars” creator George Lucas; the grandchildren of Walt Disney and his brother Roy; and Laurene Powell Jobs, the widow of former Apple CEO Steve Jobs and a longtime investor in the company.
Prior to the vote, Peltz secured the backing of influential proxy advisory firm Institutional Shareholder Services (ISS), along with notable shareholders like the California Public Employees’ Retirement System (CalPERS), the country’s largest public pension fund; Neuberger Berman, a global asset manager; and fellow activist Ancora.
Peltz said at the shareholder meeting prior to the announcement of the results that regardless of the outcome of the vote, Trian would be watching the company’s performance.
“The long-term track record still remains disappointing,” he said.
How we got here
Peltz’s hedge fund Trian Fund Management, which owns $3 billion of common stock in Disney (including the shares owned by former Marvel Entertainment chair Ike Perlmutter) renewed a push to shake up Disney’s board last year as the stock price hit multiyear lows.
The activist was looking to replace two existing board members — former Mastercard executive Michael Froman and WE Family Offices CEO Maria Elena Lagomasino — with himself and Rasulo.
In its fight, Trian cited the loss of tens of billions in shareholder value, a drop in consensus earnings estimates for the next two years, and disappointing studio content as some of the reasons for its board push.
Succession was also a key issue for Peltz’s backers following the messy ousting of former CEO Bob Chapek in 2022.
Disney pushed back against many of Trian’s claims, saying it’s made “significant progress” in turning around its business. Some changes have included the implementation of an ad-supported tier for its streaming service Disney+ in addition to price increases on its streaming services and theme parks and password-sharing crackdowns.
The company has maintained that it is “actively engaged in the high-priority work of succession planning.” Bob Iger’s contract is set to expire at the end of 2026.
Investors have reacted positively to the changes. Disney’s stock, up about 35% so far this year, was the best year-to-date Dow performer in the first quarter. Shares are currently hovering at 52-week highs.
Correction: A previous version of this article said Disney’s stock is trading at record highs. It’s since been corrected to reflect trading levels at 52-week highs. We regret the error.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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