The Walt Disney Company did not mince words in response to Nelson Peltz’s campaign for the board seat, with a blistering attack on the understanding of industry activist investors.
“Peltz does not understand Disney’s business and lacks the skills and experience to help the board deliver shareholder value in a rapidly changing media ecosystem,” the entertainment company wrote in a letter to shareholders on Tuesday.
In a separate filing, Disney also claimed that, despite several meetings with Peltz and the asset management company Trian Partners, the activist investor did not offer “a single strategic idea” that would help the business, and appeared to be “ignorant” of the changes taking place in the media industry. .
The entertainment company’s board also supported CEO Bob Iger in his conversation with Peltz, telling activist investors that “Iger’s leadership should be given time to execute.”
Neither Disney nor Trian immediately responded to a request for comment.
‘Restore the magic’
Last week, Trian nominated Peltz as a candidate for Disney’s board. Trian said he owns a $900 million stake in the entertainment company.
Trian said Peltz’s Board chair will help “restore the magic” in the entertainment company. In a statement, the firm said Disney’s problems were “self-inflicted,” including “failed succession planning,” a “flawed” streaming strategy and “poor judgment of recent M&A efforts including overpaying for 21st Century Fox assets.” (Disney bought 21st Century Fox assets for $71.3 million in 2019.)
Disney reported lower-than-expected revenue in its most recent earnings report in early November, including a $1.5 billion loss on its streaming service, double the amount from a year earlier.
Shares in the Walt Disney Company are still down 47.7% from their peak in March 2021, although the price rose slightly from a nearly eight-year high in December.
Peltz’s campaign is a major challenge to returning Disney CEO Bob Iger, who replaced Bob Chapek in November after the entertainment company’s political stumbles and poor earnings. (Trian claims he doesn’t want to replace Iger as CEO, but calls for a successful CEO succession within two years.)
On Tuesday, Disney announced that Peltz’s campaign was backed by Isaac Perlmutter, chairman of Marvel Entertainment and one of Disney’s largest individual shareholders. Disney acquired the comic company in 2009 for $4 billion. Perlmutter lost creative control at Marvel in 2019, when Disney gave Marvel Studios chief Kevin Feige editorial control over the film, television and print offerings of the comics division.
In the letter, Disney claims that Peltz and Perlmutter have pushed activist investors to win board seats at least 20 times since last July.
Activist investors
Peltz is also the non-executive chairman of the board of the fast food company Wendy’s, and sometimes also serves on the boards of major companies like Heinz, Procter and Gamble, Invesco and Janus Henderson, sometimes after proxy fights are the same. Peltz just launched at Disney. Even the threat of Peltz’s campaign has spurred the company to act: DuPont started a cost-cutting campaign as it fended off the challenge of Peltz.
But not every CEO is wary of Peltz. On Wednesday, Unilever CEO Alan Jope defended Peltz in an interview with Yahoo Finance on Tuesday. Trian took a stake in Unilever in January 2022, and Peltz joined the board in May.
“A big part of last year’s agenda was to simplify the organization. That’s what we felt needed to happen,” said Jope.
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