Activist investor Nelson Peltz has put himself forward – with the backing of his multi-billion-dollar asset management firm Trian Group – for a seat on The Walt Disney Company board and urges shareholders to vote in his favor.
Ahead of Disney’s 2023 shareholder meeting, Trian, which is an investor in the company, filed an SEC proxy statement issuing its intent to have Peltz nominated as a director on the board. Collectively Trian owns an aggregate of 9.4 mn shares, representing about 0.516 percent of Disney’s total shares.
In the proxy statement, Trian says it believes Peltz’s ‘significant expertise and long track record’ of working successfully with management teams and boards to turn around and improve company performance and drive sustainable long-term shareholder value will be ‘invaluable’ to Disney as it works to overcome its challenges.
‘Accordingly, the Trian Group urges you to vote your blue universal proxy card ‘for’ the Trian nominee,’ the company says.
The attempt to include Peltz on the Disney board follows Trian’s belief that Disney’s annual performance reflects the ‘hard truth that it is a company in crisis, with many challenges weighing on investor sentiment.’
Peltz says in a statement: ‘The company has lost its way, resulting in a rapid deterioration in its financial performance from a consistent dividend-paying, high free cash-flow generative business into a highly leveraged enterprise with reduced earnings power and weak free cash-flow conversion.
‘My goal would be to work collaboratively with Bob Iger and other directors to take decisive action that will result in improved operations and financial performance, enhanced shareholder value and a robust succession planning process that will set the stage for sustainable growth over the long term.’
Disney says in a statement that while its senior leadership and the board of directors have engaged with Peltz ‘numerous times’ over the last few months, the board does not endorse the Trian Group nominee and recommends that shareholders not support him. The date of the shareholder meeting has not been announced.
‘Improving business results and regaining lost market share’
This is not the first time Peltz has tried to get himself on a company board. In July 2017, with the backing of Trian, he successfully fought to get a seat at Procter & Gamble.
At the time Trian had $3.3 bn worth of shares in the company. It argued that as one of P&G’s largest shareholders, Trian had a keen interest in helping the company address the challenges it was facing, which included weak total shareholder returns and disruptive and ‘existential threats’ impacting the entire consumer packaged goods industry.
After more than a year of fighting Peltz joined the P&G board in March 2018.
'We respect Nelson Peltz as a highly engaged shareowner and investor, and look forward to his contributions as a member of P&G’s Board,' said David Taylor, chairman, president and chief executive officer at P&G at the time.
'We have had constructive discussions with Nelson and we are committed to working together for the best interests of all P&G shareholders.'