For Disney, Small Shareholders Loom Large in Boardroom Fight

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Robert A. Iger, Disney’s chief executive, and the company’s 12-member board have responded to the insurgents like Avengers battling Thanos — that is, with startling force. They say a 13-month-old turnaround plan has taken hold, and point to drastically improved financials, a new strategy for ESPN in the streaming age and a retrenchment at Marvel Studios to improve movie quality, among other initiatives. Yes, Disney’s stock is down from three years ago, but it’s up from $81 six months ago.

Disney executives contend that Mr. Peltz’s campaign is rooted in revenge. He is backed by Ike Perlmutter, the disgruntled former chairman of Marvel Entertainment, and aligned with Jay Rasulo, a former Disney executive who was passed over for the top job in 2015 and resigned. Elon Musk, who has been throwing elbows at Mr. Iger since November, when Disney and other major companies paused spending on X, has cheered on Mr. Peltz.

At first, Disney seemed poised to easily defeat Mr. Peltz. A parade of prominent shareholders (George Lucas, Laurene Powell Jobs), business titans (Jamie Dimon), analysts (Guggenheim, Macquarie), shareholder advisories (Glass Lewis, ValueEdge) and Disney family members (Abigail E. Disney) have advised against giving Mr. Peltz seats on the company’s board.

But it has evolved into a much closer contest. Two weeks ago, an influential proxy firm, ISS, partly sided with Mr. Peltz, recommending that shareholders elect him to the board and advising against adding Mr. Rasulo. ISS largely cited Disney’s botched succession planning. On Tuesday, Mr. Peltz won the backing of Egan-Jones, another advisory firm.

Until ISS weighed in, “I was pretty sure that Peltz was kind of cooked,” said Michael Levin, an independent activist investor and adviser who oversees the Activist Investor website. Mr. Levin estimated that ISS’s recommendation could influence 5 to 10 percent of Disney’s vote, with institutional shareholders like Vanguard and BlackRock likely to pay close attention.

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