Disney CEO Bob Iger and Nelson Peltz, founder of the investment firm Trian Partners, have been embroiled in a heated proxy battle over the last three months for control of two seats on the media giant’s corporate board.
The final showdown is set to take place Wednesday during Disney’s annual shareholders meeting, when investors will cast their votes for the board.
Disney announced its 12 board nominees in January, including Iger. A few days later, Trian Partners — which controls a $3.5 billion stake in Disney — formally nominated Peltz and ex-Disney chief financial officer Jay Rasulo for board seats. That kicked off a fierce proxy fight over the company’s future.
Here’s what to know before it comes to a head.
Who is Bob Iger?
Disney CEO Bob Iger has become the face of team Disney in this contest for shareholder votes. Iger, who has been with the media giant for four decades, served as CEO of the company from 2005 to 2020. He was elevated to executive chairman before retiring in 2021.
Iger returned to the company just a year later to serve a two-year term. His eventual succession has become a key sticking point in this proxy fight.
Who is Nelson Peltz?
Nelson Peltz is the co-founder and CEO of the alternative asset management firm Trian Partners, which controls about a $3.5 billion stake in Disney. He has previously waged successful proxy battles at Procter & Gamble and Heinz. This is Peltz’s second attempt at getting a seat on Disney’s board after a failed campaign in 2023.
Why does Peltz want a seat on Disney’s board?
Peltz’s bid is rooted in his argument that under Iger, Disney’s business is in decline. “[D]espite its many advantages, Disney has lost its way. Disney fell from its #1 position at the box office, was late to enter the streaming business and doubled down on linear TV at the wrong time,” Trian said in a letter sent to Disney shareholders this month.
The firm released a 133-page paper in late March outlining Peltz’s plans for the company, which include completing a successful CEO succession, aligning performance-based compensation with shareholder value, and developing a strategy to reach margins similar to Netflix’s 15-20% by 2027.
What does Disney have to say?
The media giant is trying to defend itself from a Traian takeover. Disney has launched a website asking shareholders to not vote for the investment firm’s candidates. “Nelson Peltz has a long history of attacking companies to the ultimate detriment of shareholder value,” the company said in a video on the website.
Most recently, the company said that oversight from an “81-year-old hedge fund manager with no creative experience” would it impede the company’s creative progress. The comments were made in response to an interview in which Peltz criticized the track record of Marvel Studios President Kevin Feige. He specifically took shots at two of the studio’s movies, The Marvels and Black Panther.
Who’s endorsing who?
Team Disney has received endorsements from some of the biggest names in entertainment and finance including JPMorgan Chase CEO Jamie Dimon, George Lucas, and some members of the Disney family.
Team Peltz has received endorsements by tech proxy advisory firms Institutional Shareholder Services (ISS) and Egan-Jones. Peltz also has the backing of Ike Perlmutter, the former chairman of Marvel Entertainment and one of Disney’s biggest independent shareholders. In March 2023, Perlmutter was let go from Disney as part of a cost-cutting campaign, but he’s said publicly that he was actually fired.
How is Wall Street reacting to the Disney fight?
Disney stock has risen more than 30% to about $122 per share since Peltz announced his plans to seek seats on Disney’s board in November. It’s up 35% so far this year.
“The incessant Disney-related news flow ahead of the proxy vote has dominated investor considerations since last quarter’s earnings, and we expect this to continue helping the stock near term,” Barclays analysts wrote on Monday as they upgraded Disney stock from equal weight to overweight.
Barclays also raised its price target for Disney stock from $95 per share to $135 per share. The analysts said that after the proxy battle is over, Disney’s board will likely focus on transitioning Iger out (assuming that the CEO does retire in 2026).
A potential long-term plan and guidance introduced ahead of Iger’s departure could help boost the stock, the analysts added. Barclays also took a bullish stance on streaming profitability, with the analysts saying they expect Disney to break even “potentially a quarter or two earlier than” the company’s expectations of the final quarter of 2024.
Raymond James reiterated its outperform rating on Disney stock in a note to investors Monday, and raised its price target from $122 per share to $128.
More Disney news
The biggest players in Disney’s big board fight — and which side they’re on
Disney bashes Nelson Peltz as an ‘81-year-old hedge fund manager with no creative experience’
Nelson Peltz says the Disney board fight isn’t about Bob Iger at all