Disney boosts board ahead of Peltz showdown as Iger says linear nets ‘not for sale’

Source: Disney

Ahead of a likely showdown with ‘activist investor’ Nelson Peltz over the latter’s claim to board representation, Disney has appointed James P. Gorman, Chairman and CEO of Morgan Stanley, and Sir Jeremy Darroch, former Group CEO of Sky, as new directors.

Darroch’s appointment is effective January 9, 2024, and Gorman’s is effective February 5, 2024.

Disney said that the selection of the pair followed a lengthy and comprehensive search that began in April. It said it was committed to a strong board focused on long-term performance, strategic growth, the crucial – and much criticized – succession planning process, and increasing shareholder value.

Gorman and Darroch will be included in the company’s slate of director nominees in the proxy statement for Disney’s 2024 Annual Meeting of Shareholders. Disney board member Francis deSouza has decided not to stand for reelection at the annual meeting.

The appointments come before a likely battle with Peltz and his Trian Partners vehicle, who is expected to nominate candidates for the board.

Peltz’s renewed drive for representation came after Trian upped its stake in Disney. However, much of the stake comes in the form of shares entrusted to Trian by former Marvel CEO and longtime Iger foe Ike Perlmutter.

Disney recently saw another outside investor, ValueAct Capital, take a sizeable stake in the firm. However, ValueAct is seen as likely to adopt a more collaborative approach with Disney than Peltz, who has been highly critical of the studio’s management under CEO Bob Iger.

“James and Jeremy are both widely respected leaders in their industries, and their expertise will complement the talents and experience of the Disney board as we continue to focus on delivering for consumers and shareholders alike. In the 14 years that James has been CEO of Morgan Stanley, he has overseen a strategic transformation of the institution and delivered significant shareholder value, and was integral to Morgan Stanley’s well-managed succession process over the past year,” said Disney chair Mark Parker.

“Jeremy brings extensive leadership in the international media business, and during his tenure at Sky, he led Sky’s successful transition from a linear satellite broadcaster to one of Europe’s largest multi-platform TV providers.”

Gorman said: “Disney stands apart, both in its creative excellence and its deep connection with consumers. It is an incredible opportunity to join this accomplished board of directors, and to lend my experience and perspective as the company implements its strategic vision to build for the future.”

Darroch said: “I am thrilled to join the board of directors of one of the most beloved brands in the world at such a pivotal moment for the company.“I look forward to working closely with my fellow board members to advise Disney’s executive leadership on the implementation of their strategic priorities designed to drive sustained growth and create long-term shareholder value.”

No sale of linear networks

The board appointments came after Iger used an interview at the New York Times Dealbook Conference to confirm that he would “definitely” step down at the end of his current contract, which has been extended until 2026.

Iger also said that Disney’s linear broadcasting arm ABC was not for sale despite the ongoing decline in linear viewing.

Iger had previously said that Disney’s linear networks may not be “core” to the company in the future, leading to speculation that a sale could be on the cards.

At the Dealbook Summit, Iger said he had been airing a “thought process” when he told CNBC that the networks may not be essential to Disney in the future.