Disney's biggest shareholder fight in 20 years will shape the company's future

Meg James, Los Angeles Times on

Published in Business News

Walt Disney Co.'s biggest boardroom showdown in 20 years culminates this week with an election that has already reverberated throughout the Burbank entertainment giant.

Billionaire Nelson Peltz has waged a nearly six-month battle for a seat on Disney's board of directors. A smaller activist group, Blackwells Capital, joined the fray with three other candidates. Disney has offered its own slate of 12 nominees, including two new board members.

On the surface, the opposition campaigns do not threaten the standing of Disney Chief Executive Bob Iger, whose reelection to the board is uncontested. But Wednesday's vote has turned into a contentious referendum on the celebrated CEO, who has struggled to tame the enormous problems that prompted his return in late 2022.

If Disney prevails, and its nominees are elected, Iger should have a clear runway to carry out his turnaround plan for the century-old company before his planned retirement in 2 1/2 years. However, the dynamics could be strained should Peltz — the founder and CEO of Trian Fund Management — and his running mate, former Disney executive Jay Rasulo, join the board.

Could history repeat itself? The dissension contains echoes of 2004, when then-CEO Michael Eisner publicly feuded with high-profile members of the Disney family to stay in power. Eisner survived the vote, but not unscathed. He relinquished his chairman role and left the company the following year to make way for Iger.

This year's campaign has turned bitter and personal: Peltz has accused Disney of engaging in "stupid" behavior. The company's financial performance has deteriorated, its stock has underperformed and its directors have not looked out for shareholders, Trian said.


"Despite its many advantages, Disney has lost its way," Trian said in its letter to shareholders.

The rub has been Disney's subpar stock performance over the last decade, uneven box-office results and a botched succession plan.

Iger handed the reins to his hand-picked successor Bob Chapek in 2020, but he soon stumbled, prompting the board to bring back Iger less than a year after the longtime chief left the board.

"Iger is not the only person on Earth who could run that company successfully," said Charles Elson, a former director at the Weinberg Center for Corporate Governance at the University of Delaware. "This board seems to be too CEO-centric ... Having someone else come in from the outside is really not a bad thing."


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