Pension fund CalPERS supports Nelson Peltz in proxy fight

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Nearly 100 hours before the deadline for all Disney shareholders to cast their votes in the bitter board battle between the Mouse House and activist investor Nelson Peltz, one of the nation’s top pension funds has brought its guns out on the battlefield.

The California Public Employees’ Retirement System (CalPERS), with 6.7 million shares in Disney, prevented Ike Perlmutter-backed Peltz, a former CFO, from gaining seats on the board on April 3 through hard-fought efforts by Bob Iger and supporters. ,

John Myers, head of CalPERS’s public affairs office, told Deadline today, “CalPERS believes The Walt Disney Company would benefit from a fresh look at its board of directors and has nominated candidates Nelson Peltz and Jay Russulo.” Voted the shares of his company in favor of.”

While CalPERS says it will also vote for people like Iger and former Morgan Stanley boss James Gorman to the 12-member board, they certainly intend to shake things up, even if Disney’s downfall in recent months There has been a rise in the shares.

“Pension funds’ established voting guidelines focus on the need for independent corporate boards, a stake in setting executive pay, and increased transparency,” Myers said. “Two new directors who are qualified and capable of leading the necessary changes in corporate governance will serve the Disney board well.”

Disney had no comment Saturday on CalPERS’ announcement.

Bob Iger, Nelson Peltz

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With 1.8 billion shares outstanding, Disney doesn’t just have to fear CalPERS, which is one of the company’s top 40 shareholders.

However, behind closed doors in Burbank, it’s likely everyone is talking because this vote has now apparently become too close for Disney’s comfort. The fact is that unlike many major companies, individuals and small shareholders own 40% of Disney, and at this point perception is power. To that end, many shareholders with only a few hundred shares or less, under normal circumstances, have reported to Deadline about receiving calls, campaign-like materials and other outreach from both Disney and Peltz-founded Trian Partners.

Just a few weeks ago, Perlmutter proxy Peltz looked DOA in its latest corporate salvo.

Iger and the outgoing board included big names like George Lucas, Laurene Powell Jobs, ex-CEO Michael Eisner (who was ousted for Iger in the 2005 board dust-up) and even Abigail Disney and other members. Names were supported. Family. In that coalition, influential voices like JPMorgan Chase CEO Jamie Dimon, advisory firm Glass Lewis, ValueAct Capital and New York City Retirement Systems (which owns 2.6 million shares in Disney) have come out in support of Iger, 72. And the current board.

Peltz got a big boost on March 21 when influential proxy advisory board Institutional Shareholder Services recommended adding the activist investor to the Disney board when former and current CEO Iger leaves for the second time (currently under extended contract through 2026). , so succession planning appears uncertain Last year) played a major role in favoring Peltz at ISS and recommending the removal of current Disney director Maria Elena Lagomasino.

ISS withdrew its support from Rasulo, saying “dissident nominee Peltz, as a significant shareholder, can get involved in the succession process, which would provide reassurance to other investors that the board is doing things properly this time.” “He can also help evaluate future capital allocation decisions. Additionally, multi-year concerns over Lagomasino’s role as a compensation committee member strengthen the case that Peltz’s addition would appear positive, overall.

In historical context, ISS was a key player in Eisner, who was shown the door about 20 years ago when he threw his weight behind Iger for the top job.

Add to the mix, Blackwells Capital has also put forward three board nominees of its own, though the activist shareholder has proven no fan of Peltz and Trian. Yet, this week, the Blackwells instigated a lawsuit against Disney over what they perceived as an inappropriate corporate relationship with ValueAct. The Blackwells allege that ValueAct managed the Disney pension fund from 2013-23 and that Disney never mentioned when it received support from them in the board fight.

Disney has called the legal action “baseless,” but has taken it so seriously that it has issued a strong response to a lawsuit filed in Delaware Chancery Court.

“No Disney Pension Plan funds are currently invested with ValueAct nor were they managing any Disney Pension Plan funds at the time we entered into the information-sharing agreement with the Company,” the company said on March 28. During the litigation, Disney offered to meet with them and provide documents confirming those facts, but the Blackwells refused the meeting.

Although many votes have already been cast, Disney shareholders have until April 2 at 11:59 pm ET to cast their votes. The results will be unveiled at a shareholder meeting on April 3, which will be held virtually and livestreamed on Disney’s investor relations website.

Any way you look at it, it’s some Disney Plus.


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