The Walt Disney Company is preparing for its annual shareholders’ meeting, where board members will vote on the next chairman.
©Disney | Walt Disney Company Headquarters
But, who the next chairman will be remains unclear, as Disney has been emblazoned in a proxy battle with activist investor Nelson Peltz. Peltz (and his firm the Trian Group) has shared he believes Disney has “lost its way” and that he’s the right man to lead them back. And now, we’ve got another update ahead of the shareholders’ meeting.
When Disney first announced that Mark Parker would become the new chairman of Disney’s Board of Directors, it seemed like a done deal. However, we now know that’s not exactly the case.
Disney solidified its support for Parker even after Nelson Peltz and the Trian Group submitted a proxy filing for a seat on the board, and now they’ve shared exactly who they think should be removed. For context, Trian said it holds about 9.4 million Disney shares valued at approximately $1 billion.
©New York Times Nelson Peltz of Trian Partners
On Thursday, the Trian Group vocalized its support of the removal of Michael Froman from Disney’s board, to be replaced by Nelson Peltz, according to CNBC. The firm shared in a statement, “Trian Group believes Mr. Froman has no experience as a public company director outside of Disney. In contrast, Nelson Peltz has served on numerous public company boards over the last several years.”
Froman is the current vice chairman and president of strategic growth at Mastercard, and has served as a director on Disney’s board since 2018. He also served as U.S. Trade Representative under President Obama.
©Reuters
Peltz is currently a director of Unilever PLC and Madison Square Garden Sports Corp. He’s served as a director of Janus Henderson Group plc; Invesco Ltd.; The Procter & Gamble Company; Sysco Corporation; Legg Mason, Inc.; Mondelēz International, Inc.; MSG Networks Inc.; Ingersoll-Rand plc; and H. J. Heinz Company. So, it’s true that Peltz has been on a LOT of Boards of Directors in the past.
©Trian Partners
Trian and Peltz have argued that Disney shareholders have lost out on value over the years from “weak corporate governance.”
Peltz also says Disney is facing major problems with CEO succession, poor financial strategy (when it comes to streaming), and not enough accountability with capital allocation. Peltz feels Disney is over-earning at the theme parks in order to make up for losses in streaming, and he feels this is an irresponsible strategy.
Walt Disney Company Headquarters ©LA Times
But, Disney has made it abundantly clear that they do NOT want Nelson Peltz to be on the Board by saying Peltz “does not understand Disney’s business and lacks the skills and expertise to assist the Board in delivering shareholder value in a rapidly shifting media ecosystem.”
©Disney
UPDATE: Disney has responded to Trian’s latest filing, per BusinessWire. In a statement shared on Thursday, Disney said, “The Disney Board of Directors does not endorse Nelson Peltz (or his son Matthew, who is running as an alternate Mr. Peltz may swap in) as a nominee, and believes 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.”
“Inexplicably, Trian seeks to replace Michael Froman, 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. Neither Mr. Peltz nor his son offer skills or experience additive to the Disney Board that replace the decades-long experience of Mr. Froman.”
Cinderella Castle
Disney then urged shareholders to discard any blue proxy cards they may have received in the mail from Trian, stating that the white proxy cards from Disney directly would be mailed soon.
We’ll be keeping an eye on this situation for updates, so stay tuned to DFB for the latest!
See the FULL Timeline of Disney’s Recent Legal Battles
Join the DFB Newsletter to get all the breaking news right in your inbox! Click here to Subscribe!
WE KNOW DISNEY.
YOU CAN, TOO.
Oh boy, planning a Disney trip can be quite the adventure, and we totally get it! But fear not, dear friends, we compiled EVERYTHING you need (and the things to avoid!) to plan the ULTIMATE Disney vacation.
Whether you're a rookie or a seasoned pro, our insider tips and tricks will have you exploring the parks like never before. So come along with us, and get planning your most magical vacation ever!
What do you think will happen with Disney’s board? Let us know in the comments!
Our handy (and portable!) ebook guides make sure you get the best deals and can plan a vacation of a lifetime.
Very complicated to say the least/
I am a Disney stockholder,DVC member and Annual Passholder. Maybe we need to remove Peltz. What a loser. This power play is all about Peltz and not the Disney brand. Has no clue about the company as a whole.
I hope that Nelson makes it. He is correct, that Disney has lost its way AND that they truly are over earning at the parks.