By Allison Morrow | CNN
Disney has won a hard-fought proxy battle against a group of activist investors seeking seats on the company’s board of directors. The shareholder vote was a landmark victory for CEO Bob Iger.
Disney’s board triumphed by what the company called “a substantial margin” over nominees put forward by Trian Fund Management and Blackwells Capital at its annual shareholder meeting.
“With the distracting proxy contest now behind us, we look forward to focusing 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” said Iger.
After her defeat, Trian released a statement saying she was disappointed with the outcome but appreciated “the support and dialogue we have had with Disney stakeholders.”
“We are proud of the impact we have had in refocusing this company on value creation and good governance,” the statement said. “We will monitor the company’s performance and focus on its continued success.”
The investor fight that came to a head Wednesday was widely seen as a referendum on Iger, who is in his second term as CEO in more than a year.
Although Disney shares have risen nearly 50% in the past six months, some investors, including Trian and Blackwells, were hoping for higher returns and a more aggressive shakeup at the House of Mouse. In particular, Trian wanted to align compensation with the performance of key executives, restore Disney’s dominance at the box office and increase the company’s profit margin.
The biggest challenge came from Trian, which named its founder, Nelson Peltz, an 81-year-old corporate raider, to the board, alongside Jay Rasulo, Disney’s former chief financial officer.
Peltz had expressed policy differences with Iger that animated his campaign. In a recent interview with the Financial Times, Peltz denigrated the films “The Marvels” and “Black Panther” as promoting what Republicans often call a “woke” agenda.
“Why do I have to have an all-female Marvel? Not that I have anything against women, but why do I have to do this? Why can’t I have wonders that are both? Why do I need an all-black cast? » Peltz told the FT.
Disney remains one of the most successful media giants on the planet, but it has also seen parts of its empire stumble in recent years.
Many of its problems stem from running a sprawling media conglomerate in the 2020s: the once-lucrative pillar of linear TV is rapidly collapsing, while its theoretical replacement, streaming services, is burning through cash. Rising interest rates took their toll and movie theater audiences grew tired of Disney’s most recent spinoffs and sequels.
“In some ways the challenges are greater than I expected,” Iger said last year in an interview with CNBC.
Peltz and other shareholders used these stumbles to rally support for the change. Trian Partners said in a regulatory filing that it plans to spend about $25 million on its campaign for board seats.
Had the Trian Group succeeded in securing board seats, it would have dealt a seismic blow to Iger’s reputation as one of Hollywood’s most powerful actors. And that would have allowed activists to potentially shape or disrupt Iger’s vision for the company’s turnaround.
But it wasn’t clear that Peltz’s plan — essentially maximizing profits and tying executive pay to performance — would be significantly different from what Iger was already doing.
A year ago, Iger announced he was laying off 7,000 people and implementing a restructuring plan aimed at reinvigorating Disney’s key creative departments.
There are signs that his turnaround plan is working. In February, Disney surprised investors with its first-quarter results, announcing that it would increase its earnings per share by 20% this year.
Having fended off Peltz and Trian, at least for now, Iger likely has some wiggle room to focus on the growth phase of his plan, at least until his contract expires in 2026, at which point Iger promises to resign. But a former Disney executive said the fight is far from over.
“The fact that he was so successful indicates that there is a lot of dissatisfaction,” the former executive, who requested anonymity to speak candidly, told CNN’s Oliver Darcy before the vote.
— CNN’s Hadas Gold, Samantha Delouya and Oliver Darcy contributed to this report.
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