Disney Reinstates Dividend, Amends Bylaws Amid Push By Nelson Peltz For Board Seat

Disney today announced a cash dividend of $0.30 per share for the second half of its fiscal 2023, its first such payout since the dividend was halted three years ago during Covid.

It will be payable January 10, 2024 to shareholders of record at the close of business on December 11. The company had said back in February that it planned to bring back the dividend this year.

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“This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth,” said Mark Parker, Chairman of the Board. “As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company’s future and prioritize meaningful value creation.”

The dividend move comes as activist investor Nelson Peltz, backed by big Disney shareholder and former Marvel boss Ike Perlmutter, is seeking to join the board of the media giant — saying today he would bring the fight “directly to the shareholders” after Disney rejected his offer and named two new directors instead. This push by the founder of Trian Partners has led Disney to restate and amend its corporate bylaws that deal with outside candidates seeking board seats.

Shareholders elect directors at a company’s annual meeting. Companies list their nominated directors in a proxy statement ahead of the gathering and provide shareholders with a list of the names on proxy cards. Stockholders can also present other, outside candidates for director, not endorsed by the company, as Peltz says he intends to do. It’s not clear how many board seats he is gunning for. Disney’s fiscal year ends in September and its annual meeting is usually in sometime March. It was held a bit later this year, on April 3, as the company battled Peltz for the first time in the early part of the year. He withdrew from the fight in February, before the meeting. Prior to that, he had set up a dedicated website called Restore the Magic that detailed what he saw as Disney’s failings. Not clear yet what he’ll do this time around. Disney said earlier today that Perlmutter has a “longstanding personal agenda” against Iger.

The amendments laid out by Disney in an SEC filing today do the following:

-“Address recently adopted amendments to Rule 14a-19 under the Securities Exchange Act of 1934, as amended, by requiring that any person soliciting proxies in support of a director nominee other than the Board’s nominees provide a representation that such person will comply with Rule 14a-19 and deliver reasonable evidence to the Company that the Rule 14a-19 requirements have been met.”

This SEC rule from last year (14a-19) requires all parties use a “universal” proxy card that lists all director nominees presented by both management and shareholders for election at the annual meeting. It was meant to make it easier to get outside shareholders candidates on the ballot so some companies (not just Disney) have been amending their bylaws to make it not quite so easy,

-“Require that any person directly or indirectly soliciting proxies using its own proxy card use a proxy card color other than white.” The white card is typically used by management.

-“Enhance the procedural mechanics and disclosure requirements relating to…director nominations made by stockholders, including by requiring: certain additional background information, disclosures and representations regarding any proposing stockholders, any proposed director nominees and business and any other persons related to a stockholder’s solicitation of proxies; and any notice of director nomination be accompanied by all written questionnaires required of the Company’s directors completed and signed by any proposed director nominees.”

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