Investor Trian calls for ‘Netflix-like’ margins as it renews Disney proxy fight
Activist investor Trian Fund Management has officially launched its second Disney proxy battle, nominating its CEO, Nelson Peltz, and former Disney chief financial officer Jay Rasulo to the Mouse House’s board of directors.
Nelson Peltz
In a statement filed with the Securities and Exchange Commission (SEC) on Thursday, Peltz once again took aim at Disney’s CEO succession planning, efforts to achieve streaming profitability and broader financial performance.
“It is unfortunate that a company as iconic as Disney and with so many challenges and opportunities has refused to seriously engage with us, its largest active shareowner, about board representation,” said Peltz.
“Instead of having a boardroom that would include directors with an ‘ownership mentality’ that can bring fresh perspectives to the company’s challenges, Disney is resisting change and asking shareholders to endorse a board comprised mainly of legacy directors (and their hand-picked successors) who have repeatedly failed to properly plan for CEO succession, misaligned the incentives of management, and failed to oversee or drive a strategy to get the streaming business to profitability or the studios to produce good content.”
If it were to gain seats on the board, Trian said it would work with Disney’s board to “target and achieve Netflix-like margins of 15-20%” by fiscal year 2027, as well as conducting a board-led review of Disney’s creative processes and structure.
Trian, which owns around US$3bn of common stocks in Disney, last month stated its intention to reignite its proxy fight with the Mouse House.
It initially launched a proxy fight in 2022 but ultimately dropped it in early 2023 when Disney CEO Bob Iger announced plans to restructure the company, slash costs and make around 7,000 job cuts.
Earlier this week, Disney rejected Peltz’s nominations when it put forth a slate of its own board nominees. At the time, Disney said it had engaged in “no less than 20 meaningful interactions” with Peltz over the past year, but the activist investor has put forth “no strategic insights or proposed courses of action.”
Trian said it will release a “full presentation” to shareholders in the coming months about how to address the “current strategic muddle.” Disney’s annual shareholder meeting will take place in the spring, when shareholders can vote on who is elected to the board.
Disney has raised questions around Trian’s decision to align itself with former Disney exec Rasulo and former Marvel Entertainment chairman Ike Perlmutter.
Disney contends that Rasulo harbours resentment after being “passed over” when a new chief operating officer was chosen in 2015, while Perlmutter was laid off a year ago.
