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

Meg James, Los Angeles Times on

Published in Business News

Late last year, at the New York Times Dealbook conference, Iger acknowledged the balancing act: "We have to entertain first. It's not about messages," he said.

Disney's stock has underperformed the broader market during the last five years. But the Burbank company's strong earnings report, released in February, turbocharged the stock. Disney shares have gained more than 30% this year, buttressing the company's argument that Iger is getting things on the right track. Shares advanced more than 1% on Monday to $122.82.

Peltz has become a polarizing presence. His Trian group holds more than $3.5 billion worth of Disney common stock, including shares owned by former Marvel Entertainment Chairman Isaac "Ike" Perlmutter, who was ousted from Disney last year amid layoffs that resulted in 7,000 jobs erased.

Trian is Disney's seventh largest shareholder.

"Shareholders have suffered greatly, losing tens of billions of dollars in value," Trian said on its Restore the Magic website. "We believe the root cause of Disney's underperformance is a Board that lacks focus, alignment, and accountability."

Should Peltz win his uphill battle for a coveted seat on Disney's 12-person board, Iger will be under increased pressure to boost Disney's profit and shareholder returns. In the past, Peltz has suggested selling off assets, which could include ESPN or the ABC television network.

 

Peltz has said he would work collaboratively with Iger and others on the board. His past involvement with other major companies shows a determination to make sure that his voice is heard.

Trian representatives declined to comment when asked whether the group was withholding support for Iger in addition to the two board members it has publicly targeted. Trian has asked investors to jettison current Disney board members Maria Elena Lagomasino, chief of WE Family Offices, which advises high-net-worth families; and Michael B.G. Froman, a former U.S. trade representative and president of the Council on Foreign Relations.

On Monday, his Trian issued a 19-page presentation lambasting Lagomasino's record.

Disney has defended Lagomasino, saying she brings a "breadth of perspective and expertise" to the board, and fired back with its own presentation that features a startled Pinocchio with a jutting nose: "Pushing Back on Trian's Fiction with Facts."

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