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Disney fends off activist investors for second time in two years

activist investor Nelson Peltz Former Marvel Entertainment chairman Ike Perlmutter failed to infiltrate Disney’s board of directors for the second time in two years, losing a bitter battle to win support from the company’s shareholders. This is part of a movement to change the direction of Disney.

The Walt Disney Co said on Wednesday shareholders had voted for all board nominees by a “large margin”, rejecting a request from Mr Peltz’s hedge fund Trian Partners to gain two seats and approving a growth plan , a plan that will drive growth for the Disney Company. The company’s chief executive, Robert A. Iger, has already laid out the plans.

Mr. Trian controls about $3.5 billion worth of Disney stock, the vast majority of which is owned by Mr. Perlmutter. He and Mr. Peltz, both 81, also tried to shake up Disney’s board last year. give up Mr Egger revealed Comprehensive turnaround plan.

“With the distraction of the proxy battle behind us, we are eager to focus 100% on our most important priorities: growth and value creation for our shareholders and delivering for our consumers. Brilliant idea,” Mr. Egger said.

According to preliminary counts, Mr. Peltz received 31% of shareholder votes that he should join the company’s board. Trian said in a statement it was “disappointed” with the outcome but “proud of its impact.” We have refocused the company on value creation and good governance. “

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

The latest Disney-Trian contest has turned into one of the largest, costliest and most egregious contests in history. Trian spent about $25 million on its offensive, while Disney priced its defense at as much as $40 million, according to securities filings. drowned investors Political-style campaign materials, including mailings, emails, social media ads, videos and phone calls.

Trian harshly criticized Disney’s streaming strategy, lagging stock price and succession planning. Disney denounced Trian as “disruptive and destructive” and portrayed Mr. Perlmutter as driven by revenge.

Mr. Perlmutter Selling Marvel to Disney In 2009, he spent US$4 billion to join the company’s leadership team. In 2012, Disney negotiated a settlement with Disney Three Black Consumer Products Executives In 2016, Mr. Perlmutter tried to fire Marvel Studios chairman Kevin Feige because he spent too much ($250 million) on the production of “Captain America: Civil War,” which grossed $1.2 billion. Dollar. Iger overruled his opinion. Perlmutter also refused to make an inclusion-oriented film like “Black Panther,” which grossed $1.4 billion at the box office.

Winning shareholder support on Wednesday will allow Mr. Iger to advance his plans for Disney, which include an overhaul of ESPN to support the company’s growth. Streaming media eraSpend $60 billion on new theme park attractions and cruise ships and find a new generation of hit movies.

But the victory did not leave the 73-year-old Egger unscathed.

At first, he seemed poised to win easily. Prominent Disney investors such as George Lucas and Laurence Powell Jobs have publicly expressed support. Disney family members, including Abigail E. Disney; Slams Mr. Pelz and his associates Analysts (Guggenheim, Macquarie) and shareholder advisory firms (Glass Lewis, ValueEdge) poured cold water on Trian’s campaign.

In the wake of ISS, an influential shareholder advisory firm, the competition has become even fiercer. Partially supported Mr. Trian. Peltz also won the support of Egan Jonesanother advisory; it accuses Disney of needlessly exposing what it calls the “killing fields of the culture wars,” referring to Disney feuds with Gov. Ron DeSantis Florida is fighting an education law that opponents call “Don’t Say Gay.”

One large investor backing Mr. Peltz, the California Public Employees Retirement System (CalPERS), which owns about 6.6 million Disney shares, said the company would benefit from a “new perspective.” Corporate governance needs to change. “

Ultimately, Disney’s two largest shareholders, Vanguard and BlackRock, which together own 12% of the company, ignored ISS and voted in favor of Mr. Iger’s slate of directors. Mr. Iger also won important support from small investors: The amount is unusually large of Disney stock (as much as 40%) is held by individuals, many of whom are fans of the company’s movies and theme parks. (In public companies, the average ownership is close to 15%.)

According to preliminary statistics, more than 75% of individual shareholders voted for Disney’s candidates.

Mr. Egger Come back and run the company In 2022, two years after his retirement, Disney’s board fired his handpicked successor. Bob ChapekDuring his earlier 15-year tenure, Mr. Iger delayed retirement four times and seemed reluctant to leave when he did.

Since returning, Mr. Iger has faced a seemingly non-stop series of challenges: repeated attacks from activist investors, a dispute with Mr. DeSantis over control of government services at Disney World in Florida, two shutdowns of six-month period in Hollywood. Months of union strikes, the collapse of the box office for Walt Disney animated movies, and even a condemnation voiced and written by Elon Musk.

Should Disney sell ABC? How will ESPN transition to full streaming? Who will take over as CEO when Mr. Iger retires again?

Some of these issues remain.

“Regardless of the outcome of today’s vote, Trian will be concerned about the performance of the company,” Mr. Peltz said at a meeting before the vote results were announced. “Trian remains concerned about the current strategy,” he said. “We hope. Disney can get back to making great content and delighting consumers, while creating sustainable long-term value for all shareholders. “

In other news from Disney’s shareholder meeting, the company said investors also voted against giving Blackwells Capital, a smaller activist hedge fund, a seat on its board; it had been running for three seats.

“The company will benefit from the hard work each of our candidates will put in to advance this iconic company over the coming years, but we respect the wishes and outcomes of our shareholders,” Blackwells said in a statement. .”

Lauren Hirsch Reporting from New York.

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