Disney (DIS) has efficiently fended off activist investor Nelson Peltz in his quest to safe board seats on the firm, officially ending a extremely contested proxy battle that has plagued the leisure large and its CEO Bob Iger for months.
The corporate mentioned Wednesday at its annual shareholder assembly that the present Disney board will stay intact following a shareholder vote that gave the corporate’s slate a win “by a considerable margin.” About 75% of retail shareholders voted in favor of Disney’s present board, in keeping with a supply conversant in the scenario.
The outcomes symbolize a win for Disney within the quick time period because it ends months of uncertainty and distraction for Iger and the corporate’s administration workforce. However it additionally means Disney’s board will face rather more strain to ship outcomes as the corporate makes an attempt to navigate consumers’ shift away from conventional cable packages into largely unprofitable streaming providers.
Together with its defeat of Peltz, who had fought for seats for himself and former CFO Jay Rasulo, Disney additionally defeated activist Blackwells Capital, which had urged shareholders so as to add its three nominees to the present board.
Disney’s inventory traded decrease following the outcomes, with shares closing down greater than 3%.
“The strain on Bob Iger [until he retires in 2026] will keep actually proper,” Needham analyst Laura Martin instructed Yahoo Finance Stay following Wednesday’s outcomes. “Activists are circling this firm they usually’re solely stored at bay if the share value retains going up.”
Disney had received support from high-profile proxy agency Glass Lewis, along with the backing of notable names like JPMorgan CEO Jamie Dimon; filmmaker and “Star Wars” creator George Lucas; the grandchildren of Walt Disney and his brother Roy; and Laurene Powell Jobs, the widow of former Apple CEO Steve Jobs and a longtime investor within the firm.
Previous to the vote, Peltz secured the backing of influential proxy advisory agency Institutional Shareholder Services (ISS), together with notable shareholders just like the California Public Staff’ Retirement System (CalPERS), the nation’s largest public pension fund; Neuberger Berman, a worldwide asset supervisor; and fellow activist Ancora.
Peltz mentioned on the shareholder assembly previous to the announcement of the outcomes that whatever the final result of the vote, Trian could be watching the corporate’s efficiency.
“The long-term monitor report nonetheless stays disappointing,” he mentioned.
How we bought right here
Peltz’s hedge fund Trian Fund Administration, which owns $3 billion of widespread inventory in Disney (including the shares owned by former Marvel Leisure chair Ike Perlmutter) renewed a push to shake up Disney’s board final yr because the inventory value hit multiyear lows.
The activist was trying to exchange two current board members — former Mastercard govt Michael Froman and WE Family Offices CEO Maria Elena Lagomasino — with himself and Rasulo.
In its struggle, Trian cited the lack of tens of billions in shareholder worth, a drop in consensus earnings estimates for the subsequent two years, and disappointing studio content as a few of the causes for its board push.
Succession was additionally a key concern for Peltz’s backers following the messy ousting of former CEO Bob Chapek in 2022.
Disney pushed again in opposition to a lot of Trian’s claims, saying it is made “significant progress” in turning round its enterprise. Some modifications have included the implementation of an ad-supported tier for its streaming service Disney+ along with price increases on its streaming providers and theme parks and password-sharing crackdowns.
The corporate has maintained that it’s “actively engaged in the high-priority work of succession planning.” Bob Iger’s contract is set to expire on the finish of 2026.
Buyers have reacted positively to the modifications. Disney’s inventory, up about 35% to this point this yr, was the very best year-to-date Dow performer within the first quarter. Shares are at the moment hovering at 52-week highs.
Correction: A earlier model of this text mentioned Disney’s inventory is buying and selling at report highs. It is since been corrected to replicate buying and selling ranges at 52-week highs. We remorse the error.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Observe her on X @allie_canal, LinkedIn, and electronic mail her at alexandra.canal@yahoofinance.com.
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