In a Disney snub, Nelson Peltz lands major endorsement in proxy fight

Nelson Peltz stands at a window overlooking an ornate building.
Nelson Peltz, founder partner and chief executive officer of Trian Fund Management.
(Calla Kessler / Bloomberg via Getty Images)

Rejecting Walt Disney Co.’s bid for boardroom stability, an influential corporate research firm has recommended that shareholders add billionaire Nelson Peltz to the Disney board, raising the stakes for next month’s proxy showdown.

On Thursday, Institutional Shareholder Services Inc. — which advises the large institutional funds on corporate governance matters — recommended that investors vote to give the vocal Trian Fund Management founder a coveted seat on Disney’s board of directors. ISS made its recommendation, in part, because of Disney’s bungled succession planning.

The recommendation adds to the challenges facing Disney Chief Executive Bob Iger, who has struggled to set Disney onto a strong financial path after returning as CEO in November 2022 after a brief retirement. The company has had numerous setbacks during the last four years, including COVID-19-related closures that stymied the company’s theme parks, cruise lines and theatrical business and a tumultuous tenure by former CEO Bob Chapek.


Audiences’ shift to streaming and rampant cord-cutting have eroded Disney’s profitable linear TV business. And last year’s dual strikes by actors and writers also left big gaps in the programming pipeline.

“Iger’s return may have been sufficient to plug the holes, and management has since taken several actions to plot a better course. With any luck, the favorable winds of renewed cinematic success should convince shareholders that Disney is again headed for safer ports,” ISS said in its report. “What remains missing is tangible progress towards succession to give investors sufficient confidence that the company will not run aground after Iger departs, and in doing so, avoid future mutinies.”

For the second time in a year, activist investor Nelson Peltz is battling Bob Iger and Disney to shake up the company and nab two board seats.

Feb. 26, 2024

The firm was alluding to the internal coup that toppled Iger’s hand-picked successor, Chapek, after about two and a half years in the CEO job. Senior Disney executives worked behind the scenes to bring Iger back to replace Chapek.

The board‘s makeup will be decided at Disney’s annual shareholders meeting April 3.

ISS, however, declined to endorse Trian’s second candidate for Disney’s board — Jay Rasulo, a former Disney chief financial officer. New York-based Trian Fund Management holds $3.5 billion in Disney stock, including the shares of former Marvel Entertainment Chairman Ike Perlmutter, an Iger foe.

ISS recommended shareholders select Peltz over Maria Elena Lagomasino, who has been a member of Disney’s board since 2015. A longtime banker, Lagomasino is CEO and managing partner of WE Family Offices, a firm that serves high net worth families. She also serves as the lead independent director of Coca-Cola Co.

In contrast, another corporate governance advisory firm Glass, Lewis & Co., endorsed Disney’s 12 nominees earlier this week.


“[W]e strongly believe that ISS reached the wrong conclusion in its recent report when it comes to adding Nelson Peltz to the board,” said Mark Parker, chairman of Disney’s board. “In contrast to Glass Lewis, ISS fails to acknowledge the breadth of perspective and expertise Ms. Lagomasino adds to the Board. The strong recent performance and results overseen by the Disney Board demonstrate our focus on long-term shareholder value creation and succession planning and our commitment to good governance practices.”

Disney released its earnings report for the first quarter of 2024 as Bob Iger seeks to quell a proxy battle waged by investor Nelson Peltz.

Feb. 7, 2024

Iger has received public support from JPMorgan Chase CEO Jamie Dimon, “Star Wars” creator George Lucas and the heirs of company founders Walt and Roy Disney, including Abigail Disney, Walt’s grand-niece and a critic of the company’s executive compensation practices in the past.

On Thursday, another prominent ally — Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs — boosted Disney’s campaign for its nominees.

“My family and I have been significant investors in The Walt Disney Company for nearly two decades, and in that time, we have seen the company transformed thanks to the steady and visionary leadership of Bob Iger and Disney’s expert Board of Directors,” Powell Jobs, founder and president of the Emerson Collective, said in the statement.

“What has always set Disney apart is the way it combines unbridled creativity with technological innovation to tell timeless stories — stories that inspire and enrich the world around us,” she said. “There is no one who understands Disney’s important legacy or the responsibility to protect it more than Bob Iger.”

Last week, Disney unveiled a political-style attack ad aimed at Peltz and his co-nominee, former Disney chief financial officer Jay Rasulo, which blasted the former’s credentials.

March 19, 2024

Iger’s nomination to the board is uncontested.

Disney’s stock has rallied by more than 30% over the last six months, but ISS noted the Burbank giant still lags behind the S&P 500 over an extended period — until last October when the activist Peltz unveiled his second proxy battle for a seat on Disney’s board.

“Iger’s turnaround plan, while somewhat scant on specific guidance, may have reassured investors that these challenges are being addressed,” ISS said. “Nevertheless, the key decision points that led to the company’s challenges over the past five years, not to mention multiple activist campaigns, can be traced to the board.”

ISS said Disney’s board fell short on two key matters: cultivating a capable successor to Iger and “preventing Chapek from veering off course after he was appointed.”


The question, the firm said, is whether the board would make the same mistakes again.

“The importance of executing a successful succession plan, particularly for a company of this complexity, and the board’s prior failure to properly oversee this process, suggests that some level of change at the board level is warranted,” ISS concluded.

Disney’s board is looking at four candidates to replace Iger when he retires in 2026: ESPN chief Jimmy Pitaro; co-chair of entertainment Dana Walden, who oversees television; Alan Bergman, co-chair of Disney Entertainment, who runs the company’s film studios; and Disney Experiences Chair Josh D’Amaro, who leads a portfolio that includes the theme parks, cruise lines and Disney Imagineers.