Disney (DIS) has successfully fended off activist investor Nelson Peltz in his quest to secure board seats at the company, officially ending a highly contested proxy battle that has plagued the entertainment giant and its CEO Bob Iger for months.
The company revealed the news during its annual meeting of shareholders on Wednesday, confirming the current Disney board will remain intact following a shareholder vote that gave Disney a win “by a substantial margin.” Along with its defeat of Peltz, who had fought for seats for himself and former CFO Jay Rasulo, Disney also defeated activist Blackwells Capital, which had urged shareholders to add its three nominees to the current board.
Disney’s stock traded lower immediately following the results, with shares down more than 1%.
The results represent a win for Disney in the short term as it ends months of uncertainty and distraction for Iger and the company’s management team. But it also means Disney’s board will face much more pressure to deliver results as the company attempts to navigate consumers’ shift away from traditional cable packages into mostly unprofitable streaming services.
“Trian and Blackwells have added urgency to the turnaround, but not substance,” Needham analyst Laura Martin wrote in a note to clients ahead of the results. “DIS will remain under pressure to drive shareholder upside going forward.”
Disney had received support from high-profile proxy firm Glass Lewis, in addition to the backing of notable names like JPMorgan CEO Jamie Dimon; filmmaker and “Star Wars” creator George Lucas; the grandchildren of Walt Disney and his brother Roy; and Laurene Powell Jobs, the widow of former Apple CEO Steve Jobs and a longtime investor in the company.
Prior to the vote, Peltz secured the backing of influential proxy advisory firm Institutional Shareholder Services (ISS) along with notable shareholders like fellow activist Ancora and investment firm Yacktman Asset Management.
In a press release, Trian revealed two other institutional investors — the California Public Employees’ Retirement System (CalPERS), the country’s largest public pension fund, and Neuberger Berman, a global asset manager — expressed their support for Peltz and Rasulo.
Additionally, more than a dozen current and former public company directors sent a letter to Disney’s board last week in support of Peltz and Trian.
How we got here
Peltz’s hedge fund Trian Fund Management, which owns $3 billion of common stock in Disney (including the shares owned by former Marvel Entertainment chair Ike Perlmutter) renewed a push to shake up Disney’s board last year as the stock price hit multiyear lows.
The activist was looking to replace two existing board members — former Mastercard executive Michael Froman and WE Family Offices CEO Maria Elena Lagomasino — with himself and Rasulo.
In its fight, Trian cited the loss of tens of billions in shareholder value, a drop in consensus earnings estimates for the next two years, and disappointing studio content as some of the reasons for its board push.
Succession was also a key issue for Peltz’s backers following the messy ousting of former CEO Bob Chapek in 2022.
Disney pushed back against many of Trian’s claims, saying it’s made “significant progress” in turning around its business. Some changes have included the implementation of an ad-supported tier for its streaming service Disney+ in addition to price increases on its streaming services and theme parks and password-sharing crackdowns.
The company has maintained that it is “actively engaged in the high-priority work of succession planning.” Bob Iger’s contract is set to expire at the end of 2026.
Investors reacted positively to the changes. Disney’s stock, up about 35% so far this year, was the best year-to-date Dow performer in the first quarter. Shares are currently hovering at record highs.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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