Disney shareholders on Wednesday rejected board appointments involving activist investor Nelson Peltz, ending a months-long proxy battle centered on the company's navigation at the topsy-turvy start of the streaming era.
A majority of shareholders instead voted in favor of the 12-person board nominees put forward by Disney, the company said in its announcement. Annual Shareholders' Meeting. (Disney is the parent company of ABC News.)
Trian Partners, the hedge fund founded by Peltz, has bolstered its position as one of Disney's largest shareholders, leading it to mount a high-profile campaign criticizing the company's growth strategy and pushing for a plan for the 73-year-old's current succession. CEO Bob Iger.
Addressing activist motivation at a Morgan Stanley investor conference earlier this month, Iger vilified Recent strong stock performance has prompted Run and Belts to dismiss the campaign as “an attempt designed to distract us.”
“Obviously, many businesses are experiencing the effect of disruption,” Iger added. “It takes not only a significant amount of knowledge, but a tremendous amount of time and attention.”
Peltz, 81, sought board seats for himself and former Disney chief financial officer Jay Rasullo. Presently Maria Elena Lacomasino and Michael Froman called on shareholders to offer them their seats.
The proxy war that came as a replacement for streaming boosted the media business. With cord-cutting and declining theater attendance, Disney has grown audiences for its suite of streaming services, which include Disney+, Hulu and ESPN+. However, the new site is yet to turn a profit.
Off to Website Dedicated to an activist campaign titled “Restore the Magic,” Tryon Partners calls on Disney management to “develop and articulate” a clear streaming strategy that can achieve “Netflix-like margins.”
Outlining a series of reforms, the website calls for cost reductions for the streaming business, a full review of the creative process and an emphasis on acquiring new intellectual property.
Nelson Peltz is a founding partner at Trian Fund Management LP. Speak at the WSJD Live Conference on October 25, 2016 in Laguna Beach, California.
Mike Blake/Reuters, File
For his part, Iger said Disney is in the midst of an organizational transformation to address the streaming challenge identified by Peltz.
Disney+ has amassed 111.3 million subscribers in the roughly five years since its launch, though the site lost 1.3 million subscribers in the final three months of 2023, quarterly earnings reported in February. showed.
The company said in its earnings report that it cut streaming-related financial losses by $300 million in the three-month period and is on pace to cut costs by $7.5 billion by the end of fiscal 2024.
The cost-cutting has helped lift Disney's stock price 23% from its latest October low, but is down 30% from the price reached in March 2021.
The issue of succession is another major point of contention in the Benami fight.
During Iker's first stint as Disney's CEO from 2005 to 2020, he was able to push back his departure several times. He returned to the post in November 2022 under an agreement to step aside after two years, but months later the company announced a contract extension until 2026.
Tryon Partners has urged the firm to clarify its succession process and conduct a thorough search for Iger's replacement, according to the activist campaign. Website He says.
After receiving his contract extension nearly a year ago, Iger emphasized his commitment to a smooth succession in a statement.
“The importance of the succession process cannot be overstated, and as the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful transition,” Iger said. said.