Disney Shareholders Reject Nelson Peltz Board Bid in Win for Bob Iger

It’s official: Disney shareholders shot down activist investor Nelson Peltz‘s effort to win seats on the Mouse House’s board of directors. Investors voted to reelect all 12 of the company-backed board members, including CEO Bob Iger, ending the most expensive corporate proxy fight in history.

The vote totals for Disney board candidates were announced Wednesday at the company’s 2024 meeting of shareholders, held virtually. Peltz, who heads investment firm Trian Partners, failed to get enough votes in his favor to clinch a board seat (as did Trian’s other nominee, ex-Disney Jay Rasulo).

Investors voted on three competing board candidate slates — Disney’s own recommended 12-member lineup; Trian’s nominees, Peltz and Rasulo; and three from investment firm Blackwells Capital, which also did not get enough votes to win board seats. The meeting proceedings were overseen by Horacio Gutierrez, Disney’s senior EVP, chief legal and compliance officer.

Peltz’s Trian had campaigned on a platform of urgently needed change to Disney’s board, citing the media company’s stock underperformance over the last several years and the board’s “botched” succession planning with former CEO Bob Chapek (Iger’s hand-picked successor who was ousted after less than two years). In response, Disney said its board already is conducting a diligent CEO selection process “led by successful CEOs with recent, highly praised succession experience.”

Peltz’s defeat is a vote of confidence in Iger and the current board. And it’s certainly a relief for Iger, who must have been dreading the prospect of dealing with Peltz directly as a board member. Iger commented on Peltz’s proxy fight at a Morgan Stanley conference last month, saying, “This campaign is designed to distract us. I am working really hard to not let this distract me, because when I get distracted everybody who works for me gets distracted, and that’s not a good thing.”

That said, Peltz’s insurgency has drawn attention to Disney’s CEO succession plan — and the question of who will be named to replace Iger when his contract expires at the end of 2026. Influential advisory firm Institutional Shareholder Services had recommended shareholders elect Peltz to the Disney board (but not Rasulo) in part citing Disney’s “failed” CEO succession planning process.

Disney has struggled to find someone to take over the CEO job from Iger. In 2019, Iger announced that he planned to leave two years later when his then-contract expired. “I was going to say, ‘This time I mean it,’ but I’ve said that before,” Iger quipped at the time. The board reinstalled Iger as chief executive in November 2022 after firing Chapek.

Disney had lobbied shareholders to reject Peltz and Rasulo for the board (along with the Blackwells nominees). The company said Peltz “brings no media experience and has presented no strategic ideas for Disney” and called Trian’s proxy fight “disruptive and destructive,” fueled by Peltz’s “vanity” and a personal grudge against Iger held by ex-Marvel Entertainment chief Ike Perlmutter (who had pooled his shares with Trian’s holdings in the proxy fight).

In agitating for a board seat, Peltz argued that Disney’s directors weren’t adequately holding Iger accountable in key areas. One of the recommendations in Trian’s lengthy white paper analyzing Disney’s operations was that the board require management to develop a “clear” streaming strategy with “tangible goals that will achieve Netflix-like margins of 15%-20% by 2027.” Trian also urged Disney to take more “shots on goal” and increase creative risks outside of its core franchises to achieve a better return on its streaming content (similar to Netflix).

Peltz, in a recent interview, questioned Disney’s “woke” Marvel films featuring Black and women superheroes — including “Black Panther,” which grossed $1.35 billion at the worldwide box office — asking rhetorically, “Why do I have to have a Marvel [movie] that’s all women? Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?” Trian’s white paper had recommended that Disney’s board initiate a “comprehensive… review of studio operations and culture, including leadership, processes and workflow” and “prioritize new intellectual property to reignite the ‘flywheel’ and drive Disney’s long-term growth.”

In the end, the majority of Disney’s shareholders decided to stick with the current board — no doubt helped by a turnaround in the Disney stock price, which has jumped 35% year to date. For the 2023 year-end quarter, Disney showed improvements in cost containment, while investors also appeared to rally around new strategic initiatives like the company’s investment in Epic Games and Iger’s announcement that the stand-alone streaming version of ESPN in set to launch in 2025.

Not unreasonably, Trian has argued that “the pressure of our proxy contest pushing Disney to perform” contributed to the stock’s recent rise.

The showdown is believed to be the priciest proxy fight in U.S. history. Disney disclosed that it expected costs for the board battle to be in around $40 million, given its get-out-the-vote effort to sway individual investors (who hold more than one-third of the company’s shares). Trian estimated it could spend upwards of $25 million and Blackwells expected to spend around $6 million.

Prior to the votes being tallied at the meeting, Disney gave Peltz three minutes to present his case to shareholders. He reiterated previous points (saying Trian’s objective is to help turn around companies that have “lost their way”) and praised the company as having “some of the greatest brands in entertainment.” Blackwells declined Disney’s offer to provide a statement the meeting, according to Gutierrez.

Peltz in January 2023 had threatened a proxy fight with Disney. However, by Feb. 9, Peltz suspended his for a board seat after Disney unveiled a broad restructuring of operations with Iger’s return as CEO.

After the vote Wednesday, all 12 current Disney directors were reelected: