The preliminary results are in, and it seems that Disney shareholders have reelected the media conglomerate’s full board. This outcome is a significant setback for activist Nelson Peltz and former Marvel CEO Ike Perlmutter, who were pushing for change within the company. Despite the months of combative back-and-forth, Disney shareholders have ultimately decided to affirm the board’s decisions, including the return of CEO Bob Iger and efforts to reinvigorate the $223 billion media giant.

Nelson Peltz, along with Trian Partners, aimed to replace two Disney directors, Maria Elena Lagomasino and Michael Froman, citing underperformance, failed succession processes, and misdirected investments. However, Peltz faced significant losses in this campaign, with Lagomasino winning by a 2-to-1 margin and former Disney CFO Jay Rasulo losing by an even larger 5-1 margin. Despite Peltz’s efforts, Disney shareholders overwhelmingly supported the company, with CEO Bob Iger receiving 94% of the overall vote.

Disney mobilized significant resources to combat the activist investors, including rallying support from the founding family, industry leaders, and influential figures like George Lucas and Jamie Dimon. Ultimately, the proxy fight cost the company an estimated $40 million, but it proved successful in fending off Peltz’s campaign. Vanguard and BlackRock, Disney’s two largest shareholders, sided with management in the final days leading up to the shareholder meeting, further solidifying the board’s victory.

Despite prevailing in the proxy contest, Disney still faces significant challenges moving forward. The company continues to grapple with subscriber declines at ESPN, financial losses in its streaming business, and the crucial task of finding a successor to Bob Iger. The botched succession process, which saw Bob Chapek ousted just two years into his tenure, remains a key concern for investors and activists alike. As Disney looks to navigate these obstacles, the focus remains on growth, value creation, and creative excellence for consumers.

Major proxy advisors Glass Lewis and ISS raised concerns about Disney’s succession issues, highlighting the need for a credible plan for the leadership transition. However, Glass Lewis acknowledged Iger’s return and the addition of new board members as steps towards addressing these concerns. The proxy advisors’ recommendations played a role in shaping investor sentiment and influencing the outcome of the shareholder vote.

In February, Disney made significant announcements during its earnings call, including securing exclusive streaming rights to Taylor Swift’s concert film and making a strategic investment in Epic Games. These moves, along with the development of a flagship ESPN streaming service, garnered positive attention from investors and reflected Disney’s efforts to evolve in the rapidly changing media landscape.

Disney’s victory in the proxy contest against Nelson Peltz underscores the company’s commitment to its current leadership and strategic direction. While challenges persist, Disney’s ability to rally shareholders, fend off activist investors, and make strategic moves signals its resilience in the face of industry disruptions. As the media giant continues to navigate uncertainties and evolve its business, the focus remains on delivering value to shareholders and excellence to consumers.

Business

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