The Walt Disney Company logo is displayed on the ground of the New York Stock Exchange during morning trading on December 1, 2023.
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The proxy advisory firm Institutional Shareholder Services advisable it on Thursday Walt Disney shareholders elect activist investor Nelson Peltz to the board in his bitter battle with CEO Bob Iger.
Peltz and his firm Trian Fund Management have asked investors to nominate him and former Disney CFO Jay Rasulo to the board at its April 3 annual general meeting. Among other things, Peltz desires to overhaul Disney’s traditional TV channels, which he claims are a declining business and declining shareholder value.
“Dissident nominee Peltz, as a significant shareholder, could provide input into the succession process, providing other investors with confidence that management will be properly engaged this time,” the ISS report said.
Siding with Peltz, ISS told shareholders to not support Rasulo within the fight, citing his previous positioning as a possible successor to Iger.
“While we have no concerns about his ability to serve as an objective director, we recognize that Rasulo’s potential presence could create additional friction on the board,” ISS said.
ISS sharply criticized Disney’s board of directors for repeatedly failing to search out a brand new CEO to take over for Iger, who left the CEO position in 2020 only to return to the position years later.
Trian hailed ISS’s support as a big victory, pointing to advisors’ support for Peltz as an experienced executive at other firms. The investment company also emphasized that shareholders advisable by ISS are refraining from supporting the previous director of JPMorgan Chase, Maria Elena Lagomasino, the present director of Disney, whom Trian intends to interchange.
In response, Disney said the ISS suggestion “does not take into account the diverse skill set and experience on Disney’s board” and emphasized that the substitute company supports 11 of the 12 nominees.
ISS also said shareholders should refrain from voting for a separate slate of candidates that features activist Blackwells.
The suggestion got here after Disney attracted a variety of high-profile endorsements, from the heirs of Walt and Roy Disney to JPMorgan Chase CEO Jamie Dimon and major Disney shareholder and filmmaker George Lucas.
Another proxy consulting company, Glass Lewis, earlier this week approved an inventory of candidates for Disney’s board of directors. The ISS was largely expected to follow suit.
Providing support for the ISS and Glass Lewis is crucial to activists’ fights. Large institutional shareholders will often – but not all the time – vote based on the suggestion of either of the 2 proxy advisory firms. Activists and management take their issues to consulting firms, which in turn issue their opinions based on meetings with each of the parties and their very own analyses.
— CNBC’s Rohan Goswami contributed to this report.
