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Disney CEO Bob Iger (left) and billionaire investor Nelson Peltz (right) found themselves embroiled in a proxy battle. Neilson Barnard/Getty Images; David A. Grogan/Getty Images
Disney is all about imagination – dubbing some employees “Imagineers” – but some investors imagine the iconic company is run differently.
Activist investor Nelson Peltz’s proxy fight against Disney for two seats on the company’s board of directors comes to a head at its annual shareholder meeting today. Business Insider’s Madeline Berg a complete overview of how we got here.
Today’s vote concerns more than just two board seats. This is the future of one of America’s most iconic companies. This is about the state of the media and entertainment industry, in which Disney plays a central role. And it could reshape how Disney CEO Bob Iger, on the job less than two years, second stint in the companycould ultimately be recalled.
Such an ambitious battle it’s not cheap, as BI’s Peter Kafka pointed out. The total amount spent between Disney and its rivals to compete for votes is estimated to be at least $70 million, a record for a proxy fight.
One of the reasons this cost so much, and why this vote is so unique, is the makeup of Disney’s investor base.
Winning the vote isn’t just about convincing large investment firms with significant positions to vote in your favor. Although, big players count toowrites BI’s Grace Eliza Goodwin.
Nearly 40% of Disney stock is privately owned, meaning both parties need to get more creative in their approach. Disney, for example, Used Pinocchio in a presentation to investors.
The Walt Disney and Mickey Mouse statue at Cinderella Castle at the Magic Kingdom at Walt Disney World in Lake Buena Vista, Florida. Joe Burbank/Orlando Sentinel/Tribune News Service via Getty Images
So where is all this going?
Disney was in good shape at the start of the week, in the lead with more than half of the votes shared, according to a Wall Street Journal report Monday. Both BlackRock and T. Rowe Price reportedly plan to back Disney.
But the fight was closer than Disney would have liked. And Peltz’s Trian Partners reportedly has powerful allies of its own (Neuberger Berman, the California Public Employees’ Retirement System and ISS voting advisor). Peltz previously told the Financial Times that he I would not seek to fire Iger if he wins a seatbut also alluded to change of management in certain entertainment divisions.
It’s also unclear what Trian, who controls about 1.8% of Disney’s stock, would do if he lost his fight. But even in failure, Trian sparked change. DuPont defeated Trian in a proxy battle in 2015, but its CEO resigned later that year and the company accelerated its cost-cutting plans.
This shows the lose-lose situation that proxy battles can sometimes become. Activist campaigns intended to gain support for their cause end up revealing the weaknesses of the companies in which they invest.
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The Insider Today team: Dan DeFrancesco, associate editor and presenter, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. George Glover, journalist, in London.
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