Disney stands against Nelson Peltz as leadership succession plan heats up

The media giant did not endorse Peltz for a position on the board.

Feb 3, 2024 - 04:30

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Disney stands against Nelson Peltz as leadership succession plan heats up

The future of Disney is up in the air as the company and some top investors are at odds on the company's future leaders.

Earlier this week, the Trian investment group, led by Nelson Peltz, made a regulatory filing to recommend replacing two Disney directors — Michael Froman and Maria Elena Lagomasino — and recommended that himself and Jay Rasulo, Disney's ex-chief financial officer, as their replacements.

The firm pointed out in the filing that the background of both Froman and Lagomasino are "unrelated" to the media industry.

Peltz and his firm — which owns about $3 billion worth of Disney shared — has been critical of the direction of the Mickey Mouse brand which they've outlined publicly on a website called "Restore The Magic."

Disney has struggled over the last few years to recover from the pandemic, with its stock below $100 per share through most of 2023 despite shares above $130 per share through most of 2019 and just below $200 per share in 2021.

The company has been led by Bob Iger, who returned in 2022 after the company let go of Bob Chapek, the man Iger had chosen to succeed him.

Iger's cost cutting moves — which included mass layoffs in the middle of 2023 — have helped drive the company's stock up nearly 14% over the last six months. But Peltz clearly does not have full belief in the direction of the media giant.

Another rival hedge fund, Blackwell Capital, has also suggested three nominees to Disney, though Reuters reported that the firm is "supportive" of Iger and his moves.

While Blackwell is rival firm of Trian as an investor in Disney, it owns a relatively minuscule $5 million worth of shares.

On Thursday, Disney put out a press release to say that it "does not endorse" the recommendations from both Trian and Blackwell for the new board members.

"Disney has the right strategy to drive profitable growth and value creation for shareholders and has made substantial progress against our objectives to make our business more efficient and effective, including a sharpened focus on our greatest brand and franchise assets, a continued commitment to cutting costs and a reinstatement of the dividend," the release read. "The Company, its management and the Board remain focused on this building plan, which will position our streaming businesses for sustained growth and profitability, reinvigorate the Company’s film studios, fortify ESPN for the future and turbocharge growth in Disney’s Experiences business."

Disney also doubled down on its original list of nominees for the board.

"Further, Disney believes all 12 of its nominees are best qualified to create sustainable shareholder value," the release read. "The Disney Board of Directors is comprised of engaged, diverse and dynamic leaders whose skills, perspectives and insights are essential in driving profitable growth and delivering on Disney’s strategic priorities as the Company navigates ongoing, industry-wide challenges."

This discussion is expected to come to a head during the company's next shareholder meeting which is set for April 4.

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