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New York –

Disney won a hard-fought proxy fight against a group of activist investors who sought to secure seats on the company’s board of directors. The shareholder vote was a legacy-defining victory for CEO Bob Iger.

Disney’s board prevailed by what the company called a “significant margin” over the nominees presented by Trian Fund Management and Blackwells Capital at its annual shareholder meeting.

Iger didn’t just beat Trian’s Nelson Peltz, he was upset, according to a person familiar with the vote count.

Peltz’s bid for a board seat received less than a third of the vote, about 31 percent, according to the source. Jay Rasulo, the former Disney finance chief who joined Peltz’s bid, also lost by a wide margin, the person said.

Retail shareholders, who hold about 35 percent of Disney stock, also voted overwhelmingly — 75 percent — for Disney’s candidates. Still, board members typically get far more than three-quarters of the vote totals, suggesting that Peltz has caught some serious interest from Average Joe stockholders.

At the same time, Peltz is spending a lot of cash on the fight, and the fact that he didn’t come particularly close to winning a board seat was surprising.

“This is by far Peltz’s biggest loss in a proxy fight,” said the person familiar with the poll.

Following his defeat, Trian issued a statement saying he was disappointed with the result but appreciated “the support and dialogue we have had with Disney stakeholders.”

“We are proud of the impact we have had in refocusing this company on value creation and good governance,” the statement read. “We will be watching the company’s performance and focusing on its continued success.”

“With the distracting proxy competition now behind us, we are keen to focus 100 per cent of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said.

Referendum on Iger

The investor battle that ended Wednesday was widely seen as a referendum on Iger, who is more than a year into his second stint as CEO.

Although Disney’s stock has increased by almost 50 percent over the past six months, some investors – including Trian and Blackwells – had hoped for higher returns and a more forceful reorganization inside the Mouse House. Specifically, Trian wanted to align pay with the performance of key executives, restore Disney’s box office dominance and expand the company’s profit margins.

The biggest challenge came from Trian, which nominated its founder, 81-year-old corporate raider Peltz, to the board, along with Rasulo, the former Disney finance chief.

Peltz had expressed political differences with Iger that animated his campaign. In a recent interview with the Financial Times, Peltz disparaged “The Marvels” and “Black Panther” movies as pushing what Republicans often call the “Woke” agenda.

“Why do I have to have an all-female Marvel? Not that I have anything against women, but why do I have to? Why can’t I have Marvels that are two? Why do I need an all-Black cast?” Peltz told the FT.

Disney remains one of the most successful media outlets on the planet, but it has also seen parts of its empire stumble in recent years.

Many of his problems come with the job of running a sprawling media conglomerate in the 2020s: The once-profitable linear TV tentpole is rapidly crumbling, while its theoretical replacement, streaming services, is burning through cash. Higher interest rates have increased, and movie theater audiences have grown bored with Disney’s more recent ongoing Marvel spin-offs and sequels.

“In some ways, the challenges are greater than I had anticipated,” Iger said last year in an interview with CNBC.

The Disney logo is part of a menu for the Disney Plus streaming service on a computer screen in Walpole, Mass., on Nov. 13, 2019. (AP-Steven Senne/The Canadian Press)

An expensive battle for the board

Peltz and other shareholders have seized on those stumbles to drum up support for change. Trian Partners has said in a regulatory filing that it expects to spend about US$25 million on its campaign for board seats.

If the Trian group had succeeded in securing board seats, it would have been a seismic blow to Iger’s reputation as one of Hollywood’s most formidable power players. And it would have allowed the operators to potentially shape or disrupt Iger’s vision for the corporate change.

But it was not clear that Peltz’s plan—essentially maximizing profits and tying executive pay to performance—would be significantly different from what Iger was already doing.

A year ago, Iger announced that he was laying off 7,000 staff and implementing a restructuring plan aimed at reinvigorating Disney’s core creative departments.

There are early signs that his transformation plan is working. In February, Disney surprised investors with its first quarter earnings, announcing that it would increase earnings per share by 20 percent this year.

After protecting Peltz and Trian, at least for now, Iger apparently has some runway to focus on the growth phase of his plan, at least until his contract expires in 2026, when Iger promises the he will resign. But one former Disney executive said the battle is far from over.

“The fact that it’s gotten so much attention tells you there’s a lot of discontent,” the former executive, who asked to remain anonymous to speak candidly, told CNN’s Oliver Darcy before the vote.

CNN’s Samantha Delouya and Oliver Darcy contributed to this report.

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