Disney issued a statement in opposition to Nelson Peltz, the Trian Management CEO gearing up for a proxy fight against the company as he pursues a seat on the company’s board.
In a slideshow filed Tuesday with the SEC, Disney argued that Peltz “does not understand Disney’s businesses, and lacks the skills and experience to assist the board in delivering shareholder value in a rapidly shifting media ecosystem.”
Additionally, he has “no track record in large cap media or tech, no solutions to offer for the evolving media landscape,” read the presentation titled “The Current Disney Board is the Right Board for Shareholders.”
On Jan. 11, the company announced Nike executive chairman Mark Parker as the successor to Disney chairman Susan Arnold. Arnold will step down from the board at the conclusion of her 15-year term limit.
Trian responded to the nomination by putting Peltz up for the role. In a Jan. 11 presentation called “Restore the Magic,” the investment firm bashed Disney’s “disappointing” share price, noting that it was trading at an eight-year low.
“We believe that current investor sentiment on Disney is low, reflecting the hard truth that Disney is a company in crisis and faces many challenges that weigh on the Company’s investment prospects,” the slideshow read.
Trian acknowledged in the presentation that Disney is “undergoing a lot of change quickly,” pertaining to the reinstatement of CEO Bob Iger and “a challenging pivot to streaming.”
However, “we believe that many of the Company’s current problems are self-inflicted and need to be addressed,” the firm argued.
In the interest of creating “sustainable, long-term value at Disney,” Trian has proposed that it scale back on “overearning” in the theme parks division and suggested amendments to the company’s bylaws.
Following an initial statement recommending that shareholders vote for Parker, Disney rebutted Trian’s presentation, point by point.
Along with disputing Peltz’s qualifications to serve as chairman, Disney doubled down on its defense of Iger. During a Jan. 12 appearance on CNBC, Peltz said Trian does not intend to replace Iger, but wants to work with him on a two-year CEO succession plan. However, he urged Disney investors to “take a look” at the company’s total shareholder returns (TSR) during Iger’s first term, from 2005-2020 before deciding whether he was the best choice to lead the company.
“So we did — Bob Iger’s TSR is extremely impressive,” Disney said in the Jan. 17 slideshow.
