Shareholders vote on Nelson Peltz, Bob Iger | Wilnesh News

disney On Wednesday, shareholders will resolve a long-simmering proxy battle led by billionaire investor Nelson Peltz.

Voters will decide whether corporate boards deserve another year of unity or whether certain directors should be replaced by candidates nominated by activist investors, including Trian Partners’ Peltz.

Disney’s 2024 annual meeting will begin on Wednesday at 1 p.m. ET.disney will Live webcast The event usually lasts about two hours.

Peltz, 81, is seeking two board seats along with former Disney CFO Jay Rasulo.They asked shareholders to appoint them as new directors to replace Maria Elena Lagomasino and Michael Froman.

Disney has received enough votes to prevail at the shareholder meeting, Reuters reported late Tuesday. If the reported vote holds, it would be a major victory for Chief Executive Bob Iger and the Disney board, which has been working to block Peltz and Rasulo.

Still, Trian can at least claim a financial victory. The company’s shares have risen 48% since the company’s second marketing campaign was first reported.

Peltz doesn’t like to be called an activist, but he’s engineered successful campaigns at iconic companies like Pepsi, Procter and Wendy’sControls $3.98 billion worth of Disney stock, accounting for about 2% of the total outstanding shares. A majority of the shares are held by former Disney executive and Marvel CEO Ike Perlmutter, who has backed Peltz and paid and solicited the shares, according to an SEC filing. Some of the fees associated with agency rights.

Trian claims that Disney’s board has failed to generate adequate returns in recent years as losses from subscription streaming have mounted while traditional TV subscriber numbers have declined. Trian also argued that Disney’s board has struggled with succession planning, noting that Iger has had his CEO contract renewed five times and had to return to the position in late 2022 after a failed transition to Bob Chapek.

Disney rebuts Iger Since he returned as CEO, he is turning things around and the company should be able to recover with no distractions.The company also Iger and the board are conducting a rigorous succession review process that should not be disrupted.

“The entire board is leaning toward this forward-thinking, forward-thinking, disciplined (succession) process,” said Morgan Stanley Executive Chairman James Gorman, who joined Disney’s board of directors in February, was interviewed on CNBC’s “Squawk on the Street” last week.

Disney shares closed at $122.82 on Tuesday, up 55% from a low of about $79 on October 27, but down 38% from $197 three years ago. The stock has gained 36% year to date, compared with a gain of 9% in the same period S&P 500 Index.

Disney and Trian both received support from influential shareholders ahead of Wednesday’s meeting. Disney leads Trian with over 60% of shareholder votes, Bloomberg reported Tuesday.

One major shareholder, who did not have access to non-public information and spoke on condition of anonymity, told CNBC they expected the vote to be very close.

About a third of Disney’s shareholders are retail shareholders, and voting at annual meetings has historically been low. But some individual stakeholders, including Star Wars creators George Lucas and Laurene Powell Jobs, own large shares of Disney, giving them institutional-like influence. Lucas and Powell Jobs, who own stakes in Disney through the acquisitions of LucasArts and Pixar respectively, have backed Iger and the current board.

Ken Squire, founder and president of 13D Monitor, said, “Voter turnout tends to be higher in contested elections because both parties are soliciting votes from shareholders, large and small.”

Institutional investors own the other two-thirds of Disney stock. black stoneDisney’s second-largest shareholder plans to back the company, The Wall Street Journal reported Monday.CNBC has confirmed T. Rowe Price, The company, which owns about 9.3 million shares of Disney stock, also supports Disney, according to FactSet. Institutional shareholders can change their votes ahead of Wednesday’s meeting.

“We are pleased management has a viable plan to address the important issues facing the company,” a T. Rowe spokesperson told CNBC.

Iger is also backed by Mason Morfit’s ValueAct Capital, which has a history of driving strategic change.both sides Signed “Information Sharing Agreement” in January, allowing Morfit to access non-public information. ValueAct holds only 0.28% of Disney’s outstanding shares, but its value to the company extends beyond voting rights. Disney will be able to leverage ValueAct’s network and expertise when pitching to institutional investors.

California Public Employees Retirement System (CalPERS), Yacktman Asset Management and Neuberger Berman have expressed their support Peltz and Messinger.

Even for experienced advisers, it’s difficult to predict how the major institutions will vote. The high-profile nature of the fight and mixed advice from proxy advisory firms could make things even trickier.

“As the stakes increase, the shareholders become more independent,” said John Ferguson, senior partner at Saratoga Proxy, who is not involved in the Disney-Trian matter. “At Disney, more important than most fights, you see shareholder independence.”

trian may have Said that he has begun to pay attention to Rasulo – who is Early vote count lags behind PeltzAccording to the Wall Street Journal, there will not be enough support to secure a seat.The activist fund filed a document on Monday specifically dedicated to eliminating lagomasino.

“Over the years, she has witnessed poor returns to shareholders and deteriorating financial performance,” Trian wrote in a note to shareholders. “Her background in wealth management is not related to Disney’s business, and she does not have the qualifications of any other director.” skills that are critical to Disney’s strategy.”

Voting for retail shareholders ended on Tuesday night.disney Expected to cost $40 million Seek shareholder support. That figure doesn’t take into account the time and effort Iger and his senior management team put into meeting with senior shareholders.

Trian estimates that $25 million will be spent on the fight. Throughout March, Pelz, his top deputies and their advisers will meet with investors.

Shareholder advisory firms Glass Lewis and ISS provide their advice to shareholders separately.Glass Lewis sides with Disney assertive Iger’s return, coupled with this year’s nomination of Gorman and former Sky chief executive Jeremy Darroch to the board, gives the company “ample opportunity to launch a more credible succession plan and develop, communicate and Execute several key initiatives that appear to reasonably target “recognized” Disney’s operational and financial weaknesses. “

ISS countered that lapses in oversight by the board, particularly regarding succession, led the company to recommend Peltz’s nomination — though not Rasulo’s.

“The company is in need of incremental change due to years of underperformance by its peers, selected benchmarks, operational challenges and, most critically, the board’s repeated failure to oversee the development of Iger’s successor,” ISS wrote. road.

The largest shareholder who spoke to CNBC said ISS’s decision to back Pelz over Lago Massino was a major surprise.

While backing Peltz, ISS said shareholders should not support Rasulo, citing his previous positioning as a potential successor to Iger.

“While we do not have any concerns about his ability to serve as an objective director, we recognize that Rasulo’s potential presence could create additional friction on the board,” ISS wrote.

most famous for it 2022 event successful Remove Peloton Blackwells chief executive John Foley has nominated media executive Jessica Schnell, SL green Director Craig Hatkoff and TaskRabbit founder Leah Solivan are three candidates for succession to Disney’s board of directors.

Blackwells did not support Trian’s campaign and made different proposals for Disney than Peltz and Rasulo, which included turning the company into a publicly traded real estate investment trust by splitting the real estate it owns. spin off.

Still, Blackwells has been a thorn in Disney’s side. The investment firm released a presentation last month detailing ValueAct’s previous relationship with Disney, which said investors earned tens of millions of dollars in fees from managing Disney’s retirement funds.

A person familiar with the matter previously told CNBC that ValueAct has not managed Disney assets since it began increasing its stake in Disney in late 2023. The arrangement still raises questions about ValueAct’s support for the company and whether Disney’s board should have revealed previous relationships.

Disclosure: Sky is owned by Comcastthe parent company of CNBC.

WATCH: Disney boardroom battle enters final moments