Disney is engaged in a proxy battle against activist investors
Members of the Disney family are backing the company's leadership in the fight


There is an internal war brewing at The Walt Disney Company — one that has even seen family members of the Mouse House's creator get involved. Disney's leadership is currently locked in a "proxy battle" against a group of activist investors attempting to win seats on the company's board.
The activist investors are led by Nelson Peltz, the billionaire brainchild behind the hedge fund Trian Partners. The hedge fund currently owns about $3 billion of Disney stock, and Peltz has been engaged in an ongoing fight with Disney CEO Bob Iger to secure seats on the board. Peltz has been an outspoken critic of Iger's leadership of Disney, and this latest battle is at least his "25th attempt to take control of the company," Fortune said. But the longstanding fight may finally be coming to an end soon, as a Disney corporate meeting this April will see shareholders "cast their votes for either the [board] nominees endorsed by Disney, or for Peltz and his sidekick, former Disney CFO Jay Rasulo," Fortune said.
As Peltz continually attempts to rally investors to his cause, the descendants of Walt Disney have stood behind Iger and the current Disney leadership. What is going on at the Mouse House, and how will this proxy battle play out?
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What are the details of the proxy battle?
Both Trian and another investment firm, Blackwells Capital, have "launched dueling PR campaigns and proxy fights to prod Disney to make changes to its corporate governance and long-term strategy," Variety said. Peltz has "specifically lamented Disney's streaming losses, a pause in dividends, and the lack of a comprehensive succession plan" as reasoning for why board seats should be ceded to Trian, Business Insider said.
Although Disney's recent earnings report showed that it had an impressive final quarter of 2023, shareholders would be "far better served investing in an index fund like the S&P 500, or in a basket of Disney's self-selected peers, than in Disney itself," Trian said in a press release attacking Disney's business model. The press release claimed that the Mouse House's "creative engine has stalled," that it has unfairly raised prices at its parks, and that its streaming service, Disney+, has failed to become profitable.
In response, Iger and other Disney executives have launched their own attacks against Peltz and Trian. The company has "cited nine examples where it disputed claims made by Peltz," Reuters said, attacking a "broad range of Peltz's arguments that ranged from the billionaire investor's track record to the financial acumen of its former CFO."
Another group Disney has in its corner are the aforementioned descendants of Walt Disney and his brother, Roy O. Disney. In a pair of letters obtained by The New York Times, nine Disney heirs lambasted Peltz's takeover attempt. The activists "have little to no knowledge of what Disney truly means to people," one of the letters said. "We know who the villains are in this story, and we know they cannot be entrusted with protecting this company's rich legacy."
"We are never without gratitude and pride for our grandfather," the other letter said. As a result, "it matters to us what the company does and how Walt Disney is represented. As such, we support Bob Iger and The Walt Disney Company board."
What is the endgame for Disney?
Despite Peltz's insistence, the "path for Trian or Blackwells to secure enough shareholder votes at the April 3 meeting to unseat incumbent board members is slim to none," Variety said. There also appears to be "little danger of a broad shareholder revolt against CEO Bob Iger," said the outlet, given that the head of the Mouse House is "too closely associated with the cloak of invincibility."
However, one of the goals of the activists has been to bump Disney's stock price, and "that has already happened," said Variety. Shares in Disney have risen 7% since the start of 2024, when the current fight between Trian and Disney began.
This appears to be a double-edged sword for the activists, though, as Disney's recent positive earnings report, along with recent announcements of film release dates, has "appeared to deflate ... Peltz's efforts to mount a boardroom shakeup," the Los Angeles Times said.
"I see no indication of widespread shareholder support for what [Peltz] is doing," Nell Minow, a shareholder rights activist, said to the Times. Activism requires a target that people are angry at, and "you just don't have enough people that are mad at Disney."
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Justin Klawans has worked as a staff writer at The Week since 2022. He began his career covering local news before joining Newsweek as a breaking news reporter, where he wrote about politics, national and global affairs, business, crime, sports, film, television and other news. Justin has also freelanced for outlets including Collider and United Press International.
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