Finance

Disney defeats activist Nelson Peltz in agency battle


disney (DIS) successfully blocked activist investor Nelson Peltz from seeking a seat on the company’s board of directors, official ending A hotly contested representation battle has dogged the entertainment giant and its chief executive, Bob Iger, for months.

Disney’s board of directors won a shareholder vote “by a wide margin” and the current Disney board will remain unchanged, the company said at its annual shareholder meeting on Wednesday. According to reports, about 75% of retail shareholders voted in support of Disney’s current board of directors. to a source familiar with the situation.

The result represents a short-term win for Disney as it ends months of uncertainty and disruption for Iger and the company’s management team. But it also means Disney’s board of directors will face more pressure as the company tries to weather the storm. consumer Switching from traditional cable TV packages to nearly unprofitable streaming services.

In addition to defeating Peltz, who fought for seats for himself and former Chief Financial Officer Jay Rasulo, Disney also defeated activist Blackwell Capital, which had Republicans add three of its nominees to the current board.

After the results were announced, Disney’s stock price fell about 2%.

“Trian and Blackwells have added urgency but not substance to the turnaround,” Needham analyst Laura Martin wrote in a note to clients ahead of the results. “DIS will continue to face pressure to drive gains for shareholders.”

Disney has get support The commission comes from high-profile agency Glass Lewis, plus support from high-profile names such as JPMorgan CEO Jamie Dimon;filmmaker and “Star Wars” creator George Lucas; grandson of Walt Disney and his brother Roy; and Laurene Powell JobsShe is the widow of former Apple CEO Steve Jobs and a long-term investor in the company.

FILE PHOTO: Nelson Peltz, founding partner of Trian Fund Management LP, speaks during the WSJD Live conference on October 25, 2016 in Laguna Beach, California. On Wednesday, Disney defeated Peltz and his efforts to gain a board seat at the company, officially ending a highly competitive race. The contentious representation battle has dogged the entertainment giant for months.REUTERS/Mike Black/File Photo

Ahead of the vote, Peltz secured support from influential proxy advisory firm Institutional Shareholder Services (ISS)and prominent shareholders such as CalPERS, the largest public pension fund in the United States; global asset manager and activist Neuberger Berman ancora.

Peltz said at a shareholder meeting before the results were announced that Trian would be watching the company’s performance regardless of the outcome of the vote.

“The long-term track record remains disappointing,” he said.

how we got here

Peltz’s hedge fund Trian Fund Management owns $3 billion worth of Disney common stock (Includes stocks (Owned by former Marvel Entertainment Chairman Ike Perlmutter) Renewed push for Disney board shakeup Last year, shares hit multi-year lows.

The activist is seeking to replace two existing board members – former Mastercard executives Michael Froman and WE Family Office CEO Maria Elena Lagomasino ——With myself and Rasulo.

In the fight, Trian cited tens of billions of dollars in shareholder value losses, falling consensus profit expectations for the next two years and Disappointing studio content as some of the reasons driven by its board of directors.

Succession is also a key issue for Peltz supporters after former CEO Bob Chapek was ousted in chaos in 2022.

Disney has refuted many of Trian’s claims, saying it has made ‘Major progress’ turn around its business.Some changes include implementing The ad-supported layer of its streaming service Disney+ in addition Price increased its streaming services and theme parks, as well as Crack down on password sharing.

The company insists that “Actively engage in the high-priority work of succession planning.” Bob Iger’s contract is Set to expire The end of 2026.

Investors responded positively to these changes. Disney stock is up about 35% year to date and is the best-performing stock on the Dow so far in the first quarter.The stock price is currently hovering at A new 52-week high.

Correction: A previous version of this article said Disney’s stock was trading at an all-time high. It has since been corrected to reflect the 52-week high trading level. We regret this error.

alexandra canal is a senior reporter at Yahoo Finance.Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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