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It’s decision day for Walt Disney (NYSE:DIS) shareholders, as the company’s annual meeting arrives to settle a long-in-the-making battle over the board (and, by extension, the near-term future of the company).
Disney’s (DIS) annual meeting (including the vote for its 13-member board) is set to begin at 1 p.m. ET Wednesday; stay tuned on Seeking Alpha for live coverage in the afternoon. And it’s far from a by-the-books affair: Disney is facing the most expensive proxy fight for board seats in history, on two separate fronts.
Activist investor Nelson Peltz and his Trian Group have put forward Peltz and former Disney Chief Financial Officer Jay Rasulo for a pair of seats, with a full-court press for accelerating media profitability, reviewing the creative engine and clarifying long-term strategic focus — while saying the board has blown its biggest responsibility, CEO succession.
Meanwhile, Blackwells Capital is pursuing three board seats for Jessica Schell, Craig Hatkoff and Leah Solivan, to support media and content, real estate and strategic assets, and spatial computing and AI respectively. Blackwells has raised the prospect of splitting Disney (DIS) into stand-alone public companies, as well as objected to Peltz’s plans for the board: “Shareholders … do not have to accept the false dichotomy of Mr. Peltz or the status quo board.”
As of Wednesday morning, Disney management was in the driver’s seat after its biggest investor looked to back the company’s own slate. Vanguard Group holds some 8.3% of Disney, and it’s voting for Disney’s nominees, Bloomberg reported.
That means with more than 60% of votes counted, Disney’s nominees are leading the competing slates from Trian and Blackwells. Still, the final result will come down to a heavy retail voting presence, with advance votes accepted up until 11:59 p.m. ET Tuesday.
Among influential proxy advisory firms, Glass Lewis has backed Disney’s director slate, while Institutional Shareholder Services (ISS) has backed Peltz’s candidacy, but not Rasulo’s. Egan-Jones, meanwhile, is backing both Peltz and Rasulo in an eye for change.
What’s at stake? Notably, nobody’s looking for the ouster of Iger, who retook the helm as CEO from Bob Chapek in late 2022. But adding activist board members would serve as a distraction from the recovery plan he’s been pursuing for Disney (DIS), Iger has said.
“We’re at this hard every day,” Iger said at a spring conference appearance. “And when you go from fixing, which was significant and heavy lifting, to building — to really creating meaningful growth for our shareholders — the only way you achieve that is by focus. And this (proxy) campaign is, in a way, designed to distract us to take our eye off all those balls that we talked about … that are necessary to generate what we need to generate for the shareholders. It’s that simple.”
Succession will be job one for whatever board comes out on the other end, though, with Iger set to depart (again) by the end of 2026 — and Disney has been leaning toward key department heads to follow him: Jimmy Pitaro at ESPN, Josh D’Amaro at Parks/Experiences, or Dana Walden or co-chair Alan Bergman from Entertainment.
Since Iger’s return to the CEO chair in November 2022, Disney stock (DIS) has risen 25% to Tuesday’s close of $122.82. Much of that gain, though, has come since the end of October, when Iger foe Ike Perlmutter gave Trian power over his voting shares, raising Trian’s stake to 33M shares. Disney’s gained 53% since that point.
