The Walt Disney Company has formally rejected activist investor Nelson Peltz’s nominations for board seats, setting the stage for a showdown at the upcoming annual shareholder meeting. Disney nominated 12 directors, none affiliated with Peltz, indicating the company plans to oppose his efforts to reshape the board.
Disney Nominates 12 Directors, Snubs Activists
Disney put forth its slate of board nominees in a proxy filing on January 16th, 2023. The 12 nominees did not include Peltz or any representatives of his investment firm Trian Partners, nor other activist investors pressing for change like Daniel Loeb’s Third Point.
Disney stated the nominated directors “have the expertise, experience and commitment to represent shareholders’ diverse perspectives, guide The Walt Disney Company’s growth strategy amid a rapidly evolving media ecosystem and deliver outstanding shareholder value in the years ahead.”
The move signals Disney intends to fight rather than negotiate with activist investors seeking board seats to push for new strategies. CEO Bob Iger has shown unwillingness to add dissidents to the board since returning to the helm in November.
Disney’s Board Nominees
| Director | Background |
|---|---|
| Michael Froman | Vice Chairman and President, Strategic Growth at Mastercard |
| Mark Parker | Executive Chairman at Nike |
| Safra Catz | CEO at Oracle |
Disney urged investors to reject the three candidates put forward by Trian, including Peltz himself, at the upcoming shareholder meeting. Analysts expect a contentious proxy vote followed by longer-term campaigns from activists seeking changes.
Iger’s Total Compensation Doubled to $31.6 Million in 2023
Disney also revealed Bob Iger saw his total compensation double to $31.6 million for the recently-ended 2023 fiscal year. The package reflects bonuses tied to Iger’s return as CEO and Disney’s business performance between October 2021 through September 2022.
Iger took over from previous CEO Bob Chapek in November 2022, but served as Executive Chairman with oversight before formally returning as CEO. His fiscal 2023 compensation included:
- $1 million base salary
- $10 million cash bonus
- $20 million in stock awards
Former CEO Bob Chapek, who was ousted in late 2022, received $16.5 million in compensation for the portion of 2023 he remained CEO before Iger took over.
Experts say the bump in Iger’s pay shows Disney’s board rewarding him for stabilizing leadership at the company during a rocky stretch. It also gives incentive to guide Disney through ongoing challenges around streaming losses, succession planning, and activist investor pressure in coming years.
What Comes Next in Disney’s Proxy Battle
Most analysts expect Nelson Peltz and Trian to vigorously campaign against Disney’s board slate and in favor of its own nominees in coming weeks and months.
Disney will likely argue the board and management deserve more time to execute the restored growth strategy under Iger. But Peltz contends fresh perspective is needed urgently on issues like succession planning, cost management, and streaming.
Possible Next Steps
- Trian publishes presentation making case for board change
- Disney makes additional filings defending performance
- Both sides seek to rally shareholder votes
If Peltz wins board seats, he could push for major changes around spending, executive leadership, and dealmaking. If Disney prevails, it may fuel activist efforts to continue pressing from the outside.
The drama will come to a head at Disney’s 2023 annual meeting, likely held this spring. Disney delayed its 2022 meeting due to the ongoing proxy fight, buying more time to make its case. Most experts expect a close shareholder vote.
Conclusion
Disney rejecting activist board nominees sets up a high-stakes showdown with Nelson Peltz and Trian Partners to determine the entertainment giant’s future direction. The coming proxy battle pits Peltz’s demands for cost cuts, strategy changes, and oversight against Disney leadership’s moves to revive growth under CEO Bob Iger.
Most analysts expect a vigorous weeks-long campaign from both sides to win over shareholders ahead of Disney’s 2023 annual meeting. The vote on board seats will establish whether activists like Peltz gain influence or Disney gets more runway to execute its revamped plans under Iger. Whatever the outcome, the proxy fight fuels the ongoing drama around Disney’s management, performance, and strategy after several turbulent years.
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