Disney and its investors should brace themselves, as activist investor Nelson Peltz is preparing to shake things up. Peltz’s Trian Fund Management has announced its intention to launch a campaign to add Peltz and former Disney Chief Financial Officer Jay Rasulo to Disney’s board. This move comes as part of Trian’s efforts to improve Disney’s stock performance and hold the company accountable for its business strategies.

To gain support for their cause, Trian plans to take a multi-faceted approach. In the coming weeks, they will be posting updates on their website, RestoreTheMagic.com, and sharing content on various platforms. They also intend to release a comprehensive white paper in the near future, before Disney’s quarterly earnings report on February 7th. Through meetings with proxy solicitors Glass-Lewis and ISS in February, Trian hopes to rally shareholders and build momentum leading up to Disney’s annual shareholder meeting, expected to take place in April.

One of the key issues raised by Trian is Disney’s lack of transparency with its businesses. Trian believes that Disney should provide more detailed information about its streaming business and establish short-term profitability targets before launching its direct-to-consumer ESPN service. By setting specific goals, Trian aims to ensure the viability of the streaming business and create a clearer path to profitability.

Nelson Peltz emphasizes the need for accountability within Disney’s board. He believes that the current board, which he claims is too closely connected to CEO Bob Iger, requires fresh perspectives to challenge existing leadership. Peltz’s track record in executive searches, having served on the boards of companies like Proctor & Gamble and Mondelez, reinforces his ability to find top-notch talent. He sees his expertise in this area as a valuable asset that would benefit Disney.

Proxy advisory services, such as Glass-Lewis and ISS, play a crucial role in the decision-making process leading up to the annual meeting. Trian and Disney will present their arguments to these firms, hoping to sway the opinions of influential investors and index funds. However, the final outcome often remains uncertain until the last moment because large investors tend to vote late in the process. Trian recognizes the importance of these advisory services in influencing shareholder voting and ultimately shaping the future of Disney’s board.

Criticism of the Disney board’s close ties to CEO Bob Iger prompts Trian’s push for change. Despite Peltz’s optimism about the potential impact he and Rasulo could have if elected, they would still only represent two voices among a larger board. However, Peltz believes that the board requires individuals who are unafraid to challenge long-standing CEOs. In his own words, Peltz envisions himself and Rasulo as the “Batman and Robin” needed to jumpstart the board and bring about a fresh approach.

Nelson Peltz’s activism and his proposed additions to Disney’s board signal a desire for increased transparency, accountability, and fresh perspectives within the company. As Trian’s campaign gains momentum and the battle for board seats intensifies, the outcome of this struggle will ultimately determine the future direction of Disney and its stock performance.


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