Activist investor Nelson Peltz will attempt to power his approach on to the board of Walt Disney after the corporate declined to appoint him as a director, setting the stage for one of many greatest proxy fights within the US in years.
Peltz is planning to take his try for a board seat on to traders, in keeping with folks briefed on his plans, placing him in confrontation with Bob Iger simply months after he returned for a second stint as chief govt of the sprawling leisure group.
Disney on Wednesday stated it was against giving a board seat to Peltz, the pinnacle of New York-based Trian Companions, which owns a $900mn stake within the firm. In an obvious try and get forward of the looming combat, Disney named Nike veteran Mark Parker as its subsequent chair.
Parker will succeed Susan Arnold, whose management was known as into query final 12 months over the corporate’s dealing with of former chief govt Bob Chapek’s remaining months within the job.
Peltz’s proxy combat in opposition to Disney could be one of many greatest boardroom battles since he compelled his approach right into a director’s seat at shopper merchandise group Procter & Gamble in 2018.
The months-long proxy combat, during which each side spent greater than $100mn to woo shareholders, captivated Wall Road, and Peltz finally emerged victorious by a margin of 0.002 per cent earlier than stepping down in 2021.
Trian launched a 35-page report shortly after Disney’s announcement criticising its M&A technique, significantly the acquisition of 21st Century Fox in 2018, saying it confirmed “poor judgment”.
The activist fund additionally denounced value inefficiencies in Disney’s streaming enterprise, which it stated had resulted in $11bn in losses for the corporate thus far, and known as its succession planning course of “damaged”.
Within the report, titled “Restore the Magic”, Trian laid out its imaginative and prescient for Disney, together with calls to make sure a successor for Iger inside two years and a reinstatement of its dividend by 2025.
An individual near Disney criticised the Peltz plan for missing a method. “It’s actually stunning that there are criticisms in [Trian’s presentation] however actually not one resolution,” the particular person stated. “Peltz has no plan.”
Disney stated Arnold, the primary girl to chair the leisure group, wouldn’t stand for re-election as a director on the firm’s subsequent annual assembly due to a 15-year time period restrict mandated by the board’s tenure guidelines.
Her stint as chair, which began in 2021 after Iger stepped down from the function, was marked by the challenges introduced by the Covid-19 pandemic, which harm Disney’s theatrical and theme park companies.
She got here below scrutiny after the corporate renewed Chapek’s contract final summer season following a bruising confrontation with Florida’s governor over an training invoice deemed anti-LGBT by its opponents, solely to dismiss him in November.
Parker, govt chair of Nike, has served on the Disney board for seven years. In a press release, Arnold stated Parker “has helped [Disney] successfully navigate by means of a time of unprecedented change”.
Iger signed a two-year contract with Disney when he returned in November. In a press release, Parker stated his prime precedence could be to “establish and put together a profitable CEO successor” and that the method “has already begun”.
Disney’s share value has fallen almost 40 per cent over the previous 12 months as traders began to query the leisure group’s excessive spending on its streaming enterprise.
The poor efficiency of the shares attracted the eye of activist investor Daniel Loeb, who efficiently pressed Disney to nominate media veteran Carolyn Everson to its board final autumn.
In a press release on Wednesday, Disney stated its senior management and board had engaged with Peltz “quite a few occasions”. It stated it stays “open to constructive engagement” with him however wouldn’t endorse his nomination to the board.
Parker spent 13 years on the helm of Nike, the world’s largest sportswear maker by income, throughout a interval marked by income development but additionally controversies together with an alleged “boys’ membership” tradition and a doping scandal.
An organization lifer who joined as a footwear designer in 1979, Parker turned chief govt in 2006 and oversaw an enlargement of Nike’s on-line and gross sales direct to shoppers. Complete income greater than doubled to $39.1bn in 2019, the final full 12 months of his tenure.