Disney: Shareholder War in the Happiest Place on Earth economy

Will Bob Iger get a happy ending? The business world asks the same question about the entertainment giant Disney. The company is holding its annual shareholders meeting this Wednesday. The appointment ends a months-long campaign against the CEO by activist investor Nelson Peltz and his investment fund Trian and the firm Blackwells Capital Group, which seeks to promote a change in management of the company’s veteran executive. Are seeking positions. ,

Trian owns 1.8% of the company’s shares, worth about $2.5 billion. The fund last fall launched a major operation called Restore the Magic. The effort was promoted after a year when the company’s shares were at their lowest point in nearly a decade. Traian tries to keep two people he trusts on the council. One is Peltz, 81, who has extensive experience at companies like Heinz, DuPont and P&G, and the other is Jay Russulo, who was the company’s chief financial officer between 2010 and 2015. “Something went wrong with the creation of the company’s creative content,” Rasulo says in a recent campaign video.

Bob Iger, on February 12.Jordan Strauss (AP)

The Board of Directors is composed of 13 positions. The vast majority aligned with Iger’s point of view. Twelve officers are up for re-election at the annual meeting this Wednesday, April 3. Trian has targeted the seats of Maria Elena Lagomasino and Michael Froman, who will be replaced by Iger’s rivals Russolo and Peltz. Blackwells Capital has three other candidates it wants to introduce to the governing body.

Peltz shot council members in another video. “Now it’s time for them to understand that with their big fees and huge compensation they owe us something as shareholders (…) They have mistreated us for a long time and that has to change,” the investor says. , who have launched several attacks on Iger in the nearly two years since returning to the company in late 2022. In January 2023, the CEO announced layoffs of 7,000 people and $5 billion in cuts to appease Peltz.

Nelson Peltz, founder of Trian Investment Fund, in a 2016 image.Mike Blake (Reuters)

Disney responded to Peltz’s challenge by running a million-dollar campaign that includes a page of documentation intended to inform shareholders how to vote in this Wednesday’s elections. The company calls for support from the 12 board members who currently hold the position, including Chairman Mark Parker, who takes over in 2023 from Susan Arnold, the first woman to chair Disney in a century. Was a woman. The company asks not to vote for candidates proposed by Peltz or Blackwells.

Board directors question Peltz’s ability to sit on the board. He highlighted his lack of experience at media companies and his lack of discretionary results at some of the companies he has worked for, such as Pepsi and GE. Similarly, he has reminded his shareholders of controversial statements, including criticism of the successful management of Marvel Studios head Kevin Feige and some comments that clash with the climate of political correctness that exists in Hollywood. Peltz complained in a recent interview financial Times Marvel made superhero movies with all-female cast, Miracle, a film that grossed $1.3 billion. He also criticized the way others were drawn with blacks and Latinos: black Panther And wakanda forever, He told the newspaper, “Why do I need an all-black cast?”

The businessman has been a major critic of the purchases of Fox and Marvel Studios, two operations that changed Disney’s role and cemented Iger’s legacy in his first stint as the group’s top executive.

Disney’s defense against the attacks by Peltz and the company, which also included his partner Ike Perlmutter, who had been fired from the company a year earlier, had the characteristics of a black campaign. The three-minute ad went against the investor’s style. “Nelson Peltz has a long history of attacking companies that ultimately harm investors,” indicates the video, which was released early last month and sent to institutional voters. The company has assured that resentment motivated Rasulo, who left Disney after not being promoted to number two CEO, and Peltz have waged a personal battle against Iger for some time.

According to wall street journal, Bob Iger will emerge from this fight well. According to the newspaper, Peltz appears to be ahead of Lagomasino in terms of votes. The polls have been open since February and will end this Tuesday night. Rasulo, on the other hand, seems less in favor of remaining on the governing body.

He magazine He assured that Iger, who has a contract until 2026, has the support of Disney’s other shareholder BlackRock. The fund manager holds a stake worth $9.5 billion, which is 4.2% of the company’s shares. The CEO is also backed by T.Rowe Price, another asset management company, which holds 0.5% of the shares. Influential businessmen like JPMorgan Chase’s Jamie Dimon and big Hollywood names like George Lucas and Michael Eisner have also endorsed it.

Trian has managed to convince shareholders that the time for change is waiting at the entertainment giant. Another resource management company, Neuberger Berman, which holds 0.1% of the shares ($254 million), has promoted voting for Russolo and Peltz. California’s public sector retirement system, known as CalPERS, has the retirement funds of thousands of employees invested in shares of Mickey Mouse’s home (about a 0.4% stake).

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(Tags to translate) economy (T) Walt Disney (T) Robert Iger (T) business (T) BlackRock (T) investing (T) alternative investments (T) business management

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