Disney says proxy fight nears end and it will move on from Nelson Peltz

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Disney says proxy fight nears end and it will move on from Nelson Peltz

Disney may have ousted Nelson Peltz from its board as giant BlackRock is said to be supporting the company’s list of directors. The firm is Disney’s second-largest shareholder with about 4.2%.

The news first appeared in The Wall Street Journal after 0.5% owner T. Rowe Price came out in support of CEO Bob Iger and Disney as shareholders head into the final day of voting ahead of Wednesday’s annual meeting. 10am ET/1pm PT. The board has been the center of the most expensive proxy fight over the past three months over record-pitching directors and CEO Bob Iger against Peltz, the billionaire activist investor who has lambasted Disney over strategy, stock price and, mainly, poor succession planning.

The last date for voting is tonight at 11:59 pm. The WSJ said that more than half of the shares have been voted on so far, so things could still change.

Disney declined to comment. BlackRock did not respond to requests for comment.

Peltz’s Trian Partners is voting about 1.5% of Disney, its shares and those of associate Ike Perlmutter. He wants board seats for himself and former Disney executive Jay Russolo. To that end, they have asked shareholders to oust Disney nominees Maria Elena Lagomasino and Michael Froman. There are 12 director seats. The candidate with the most votes wins.

Trian and Disney have been slinging mud at each other since the beginning of the year, bombarding stockholders with persistent and detailed messages, videos and charts. Disney has footed the bill for at least $40 million in outreach, including telephone calls to individual retail shareholders. The company has a larger than average retail shareholder base.

Trian has spent about $25 million in its development. Battle lines are being formed. BlackRock is a great achievement. No information was provided regarding Disney’s other top two shareholders, Vanguard and State Street.

Scorecard so far: In the Disney camp – proxy advisor Film Glass Lewis, shareholders New York City Retirement Systems and ValueAct, as well as members of the Walt Disney family, including former CEO Michael Eisner, Laurene Powell Jobs, George Lucas and actor Josh Gad (voice of Olaf) In frozen,

Peltz Camp – At ISS, the largest proxy advisory firm recommended a vote for Peltz (not Rasullo), which was the biggest blow to Disney in the fight. Egan-Jones, a much smaller consultant, recommended votes for both Trian nominations, as did investors Neuberger Berman and CalPERS (California Public Retirement Systems).

It’s been a three-ring circus with another institutional investor, Blackwells Capital, fielding three nominees of its own to the Disney board. Lakhs of rupees were also spent to promote them but there was no significant benefit.

An SEC rule called the Universal Proxy Card has made shareholder board challenges easier. From September 2022, proxy cards must include the names of all nominated director candidates proposed by any party, and shareholders voting by proxy can choose any combination of nominees. Previously, only shareholders voting in person at annual meetings could mix and match.

“You can tell it’s going to be close because they [Disney] Really scraping and communicating and trying to get every last vote,” said Michael Levin of The Activist Investor, which advocates for shareholders. Apparently it wasn’t enough for Disney to offer Peltz a seat in a last-minute deal, as is sometimes the case in proxy fights and there is some anticipated strength here.

“There are big egos involved,” Levin said. By now, “it’s become less about the direction of the business and more about who is going to prevail.”

“The debate about what he does [Peltz] Learn about the media business and how it’s going to fix streaming, that’s cool, but Disney has 300 people at the company who have ideas about it. peltz type thing [would] Contribution is pure governance. The main problem with the board is that they are completely loyal to Bob Iger… so you have 11 people who are unable to consistently put pressure on him, question him. nelson peltz [wouldn’t] That’s the problem.”

Disney disagrees with that characterization.

From a Wall Street perspective, the outcome won’t change Disney’s investment thesis much.

“I don’t think my opinion of Disney would change much if Peltz were brought on board. I don’t think he has made any constructive new comments or ideas that are shocking. “I think he’ll be a problem in the boardroom, and I agree with what Iger has said, that this is a distraction he doesn’t need,” one analyst said. “The difference between having Nelson Peltz on the board and not being on the board will be how many crores of rupees he is going to give to Iger.”

“A director Peltz could mean Iger will actually retire in 2026,” he said. But Peltz or not, the pressure is on for succession this time.

If Peltz loses, “the idea would also be that if the stock went down, it would come back up.”

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