Disney’s showdown with activist investor and Trian Fund Management founder Nelson Peltz at the entertainment giant’s 2024 annual meeting is set for April 3. Shareholders of record as of the close of business on Feb. 5 will be entitled to vote at the meeting.
Disney said in its notification to shareholders on Thursday that it has the “right strategy to drive profitable growth and value creation,” touting its “substantial progress” in making the business more efficient and effective, including a sharpened focus on its brand and franchises, a continued commitment to cutting costs and a reinstatement of the company’s dividend.
“The Company, its management and the Board remain focused on this building plan, which will position our streaming businesses for sustained growth and profitability, reinvigorate the Company’s film studios, fortify ESPN for the future and turbocharge growth in Disney’s Experiences business,” Disney added.
In addition to Trian, the activist firm Blackwells Capital has offered three of its own nominees to stand election: former Warner Bros. and NBCUniversal executive Jessica Schell, Tribeca Film Festival co-founder Craig Hatkoff and TaskRabbit founder Leah Solivan.
Disney’s board of directors said it does not endorse Peltz, Rasulo, Hatkoff, Schell and Solivan, arguing that they “do not not possess the appropriate range of talent, skill, perspective and/or expertise to effectively support the Board’s ongoing efforts to drive profitable growth and shareholder value creation in the face of continuing, industry-wide challenges.”
Instead, they believe that their 12 nominees for the board are the best candidates to “create sustainable shareholder value.” Its proposed slate includes Disney CEO Bob Iger, Mary Barra, Safra Catz, Amy Chang, Carolyn Everson, Michael Froman, Maria Elena Lagomasino, Calvin McDonald, Mark Parker and Derica Rice, as well as recent appointees James Gorman and Jeremy Darroch.
Peltz, who controls approximately $3 billion of Disney stock, has said that the entertainment giant has “woefully underperformed its peers and its potential” and set several goals for the company, including:
Adopting best-in-class governance; finally complete a successful CEO succession; and align management pay with performance
Targeting and achieving Netflix-like profit margins of 15-20% by fiscal year 2027
Commiting to a reasonable, defined payback period and return profile on ESPN Flagship DTC and communicate it in detail prior to launch
A board-led review of creative processes and structure to restore leadership accountability and reclaim #1 box office position with leading economics
Executing on a clear vision for parks targeting at least high-single digit operating income growth to ensure adequate returns on about $60 billion of capital expenditure
On Wednesday, Trian said it would seek to oust Froman and Lagomasino from their seats.
The firm argued that Froman has “no experience as a public company director outside of Disney” and “has spent most of the past 25 years of his career in fields which appear largely unrelated to Disney’s businesses: working as a federal trade representative, a national security advisor, and a financial executive.”
It also said Lagomasino’s wealth management background also appears “largely unrelated to Disney’s businesses,’ adding that she and Froman only have “one skill central to Disney’s strategy,” and that she’s “overseen a number of misaligned compensation practices” at Disney and other companies where she’s served on their compensation committees.
In its own proxy statement, Disney argued that Froman’s previous experience as the Assistant to the President and Deputy National Security Advisor for International Economic Policy, and as the United States Trade Representative provides the board with “strategic insight” on “complex international affairs.”
It also noted his work overseeing strategic growth and technology at Mastercard enables him to “offer guidance to the company on international markets in which we participate, factors affecting international trade and the balance of risks and opportunities in a dynamic marketplace, including digital governance issues and cybersecurity risks.”
Meanwhile, it noted that Lagomasino is “an expert in the field of governance and social thought leadership,” touting her roles as the founder of the Institute for the Fiduciary Standard and advisory board member of the Millstein Center for Global Markets and Corporate Ownership.
It added that she has “deep wealth management, investment and fiduciary expertise and extensive experience in leading complex organizations and evaluating businesses in a variety of industries with varying size and complexities” from her experience as an executive leader in private banking and a member of the Council on Foreign Relations.
Disney shares, which are up 7% year to date but down 14% in the past year, closed at $97.06 apiece at the end of Thursday’s trading session.
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