Things could be changing at the Walt Disney Company, but the Company’s Board of Directors isn’t just sitting back and letting it happen without at least issuing a response.

©The Walt Disney Company

For a while, we’ve been covering the situation with activist investor Nelson Peltz and Trian Parters/Group. Basically, Peltz has been attempting (for some time) to get a seat on Disney’s Board of Directors. He’s had meetings with both Bob Chapek and Bob Iger, but ultimately Disney has pushed back and refused to offer him a seat, arguing that he is not qualified. Peltz and Trian Partners have since decided to mount a battle for a seat on the Board of Directors, and now Disney has responded in a big way.

On February 2nd, 2023, Trian Partners made a number of SEC filings regarding their planned battle for a seat on the Board of Directors at Disney. In their documents, which are part of a campaign they’ve called “Restore the Magic at The Walt Disney Company,” they urge shareholders to vote “for” Nelson Peltz and “withhold” on Michael B. G. Froman. This is critical to their effort to get Nelson Peltz a seat on the Board.

©Restore the Magic | Trian Partners

Through various filings, they’ve shown shareholders how they want them to vote…

©Restore the Magic | Trian Partners

…showcasing both the Trian Partners’ blue card and Disney’s white card, which shareholders can use to place their votes.

©Restore the Magic | Trian Partners

Trian Partners insists that the Board of Directors has caused a “destruction of value” by “failing to instill a culture of accountability,” “failing to properly plan for leadership succession,” “failing to align incentives with shareholders,” and “failing to heed constructive shareholder input.”

They argue that Peltz will fix that by tying executive compensation to the “achievement of ambitious performance targets,” creating a plan that’ll turn Disney’s streaming business into the leader of the industry, working to restore the dividend, and making an effort to develop internal talent. Though they say the changes will be “difficult,” they insist that these changes are “necessary.”

©Restore the Magic | Trian Partners

But Disney has some thoughts of its own. After Trian’s filings, Disney’s Board of Directors issued a notice on their website and sent a letter to shareholders on the matter. In their notice, the Board shared that they are “focused on delivering long-term sustainable value” and that they do NOT endorse Nelson Peltz (or his son, who is running as an alternate).

In fact, the Board took it so far as to say that the “election of either Mr. Peltz or his son would threaten the strategic management of Disney during a period of important change in the media landscape.”

©Reuters

They then addressed how Trian is seeking to replace Michael Froman with Peltz. They refer to Froman as a “highly valued member of the Board with deep background in global trade and international business, who the Board believes is far better qualified than either Mr. Peltz or his son to help drive value for shareholders.”

They insist that “neither Mr. Peltz nor his son offer skills or experience additive to the Disney Board that replace the decades-long experience of Mr. Froman.”

They go on to discuss Froman’s experience (as U.S. Trade Representative, Assistant to the President of the United States, and Deputy National Security Advisor for International Economic Policy) and how it helps Disney “assess the risks and opportunities in an increasingly complex global marketplace.”

©Disney (Obtained Via USA Today)

The Board’s notice on the Company website also included a copy of the letter mailed to shareholders. In that letter, they ask shareholders NOT to return any blue proxy cards from Trian but instead to wait for Disney’s materials and cast a vote “on an informed basis.”

In the letter, they also highlight changes the Board has made recently to get the “right combination of experience, skills and perspective,” like the addition of Carolyn Everson on the board and the decision to name Mark Parker as the upcoming Chairman of the Board.

Photo from Chief Executive

They then point out once again that the Board doesn’t support Peltz and thinks his election would “would threaten [their] efforts to manage Disney for all shareholders.” They point out that Peltz has “demonstrated that he does not understand Disney’s businesses and he lacks the perspective and experience to contribute to the objective of delivering shareholder value in a rapidly shifting media ecosystem.”

They also point out that Peltz started his meetings with Disney to get a seat on the board BEFORE he was a shareholder. They then share that they are “skeptical of his motives and believe he would be disruptive at a crucial period for Disney.”

Walt Disney Company Headquarters ©LA Times

In the letter, they highlight how 10 out of the 11 Board members are independent, and how several of them have experience with Fortune 500 companies. They then “strongly” urged shareholders to discard materials sent by Trian Partners and wait to vote until they’ve received Disney’s materials.

So, Disney’s Board of Directors isn’t sitting by as Peltz makes his bid for the Board. Instead, it seems they’re actively pushing back to urge shareholders to make an “informed vote.”

Walt Disney Studios in Burbank, CA

How this will ultimately pan out remains to be seen. A shareholder meeting date for 2023 should soon be revealed. We’ll keep an eye out for more details and let you know.

To get more details on who Nelson Peltz is and why people care, click here.

Do you think Nelson Peltz will ultimately get a seat on the Board? Tell us in the comments.