Peltz hits out as Disney rejects claim for board representation

Source: Disney

Activist investor Nelson Peltz has hit back after Disney rejected his move to secure board representation.

Peltz’s latest pronouncement in his ongoing battle with Disney and its boss Bob Iger over the studio’s future followed a strong rejection by Disney of his move to secure seats for himself and former Disney CFO Jay Rasulo.

Disney recommended that shareholders do not vote for Peltz’s Trian Group nominees and reject a related proposal to amend the company’s bylaws.

A Disney proxy filing reiterated the view that Peltz had failed to preset “a single strategic ideal” to the company during the entire time he had been campaigning for board representation.

Disney said that Peltz’s “assessment of Disney seemed oblivious to the ongoing secular change in the media industry” and that Peltz’s partnership with former Marvel boss Isaac Perlmutter, “who owns the lion’s share of the equity claimed by the Trian Group, and the complexity of Mr. Perlmutter’s history with Disney and Mr. Iger and other senior executives, created significant concern regarding how that partnership would impact Mr. Peltz’s agenda as a director”.

Disney rejected Rasulo on the grounds of his close relationship with Perlmutter, and the fact that he had not held any executive role with a public company since leaving Disney in 2015.

Disney also rejected three nominations from the Blackwells Group, an investor more sympathetic, like another hedge fund, ValueAct, to the company’s management.

“It is unfortunate that a company as iconic as Disney and with so many challenges and opportunities has refused to seriously engage with us, its largest active shareowner, about board representation,” said Peltz in his response.

“Instead of having a boardroom that would include directors with an ‘ownership mentality’ that can bring fresh perspectives to the Company’s challenges, Disney is resisting change and asking shareholders to endorse a Board comprised mainly of legacy directors (and their hand-picked successors) who have repeatedly failed to properly plan for CEO succession, misaligned the incentives of management, and failed to oversee or drive a strategy to get the streaming business to profitability or the studios to produce good content. Are Disney shareholders really to believe the current Board is able to heal these self-inflicted wounds?

“We respectfully believe the answer to that question is ‘no’ and we will seek the support of shareholders for meaningful change in the Board’s composition. It is time to ‘Restore the Magic’ at Disney.”