Achi news desk-
Disney ( DIS ) has successfully fended off activist investor Nelson Peltz in his quest to secure board seats at the company, officially ending a highly contentious proxy battle that has plagued the entertainment giant and its CEO Bob Iger for months.
The company said Wednesday at its annual shareholder meeting that Disney’s current board will remain intact following a shareholder vote that gave the company’s slate a win “by a wide margin.” About 75% of retail shareholders voted in favor of Disney’s current board, according to a source familiar with the situation.
The results represent a short-term win for Disney as it ends months of uncertainty and distraction for Iger and the company’s management team. But it also means Disney’s board will face much more pressure to deliver results as the company tries to navigate the shift of consumers away from traditional cable packages to mostly unprofitable streaming services.
Along with his defeat of Peltz, who had fought for seats for himself and his former Chief Fire Officer Jay Rasulo, Disney also defeated activist Blackwells Capital, which had urged shareholders to add its three nominees to the current board.
Disney stock traded lower following the results, with shares closing down more than 3%.
“The pressure on Bob Iger [until he retires in 2026] remains fine,” Needham analyst Laura Martin told Yahoo Finance Live following Wednesday’s results. “Activists are circling this company and they’re only being kept out if the share price keeps going up.”
Disney had received support from the high-profile proxy firm Glass Lewis, as well as the support of notable names such as JPMorgan CEO Jamie Dimon; filmmaker and “Star Wars” creator George Lucas; grandsons of Walt Disney and his brother Roy; and Laurene Powell Jobs, widow of former Apple CEO Steve Jobs and a long-time investor in the company.
Before the vote, Peltz secured the support of influential proxy advisory firm Institutional Shareholder Services (ISS), along with notable shareholders such as the California Public Employees Retirement System (CalPERS), the nation’s largest public pension fund; Neuberger Berman, global asset manager; and fellow Ancora activist.
Peltz said at the shareholder meeting before the results were announced that Trian would be watching the company’s performance regardless of the outcome of the vote.
“The long-term record remains disappointing,” he said.
How we got here
Peltz’s hedge fund, Trian Fund Management, which owns $3 billion of common stock in Disney (including the shares owned by former Marvel Entertainment chairman Ike Perlmutter) has renewed a campaign to shake up Disney’s board last year by for the stock price to reach multi-year lows.
The activist planned to replace two current board members – former Mastercard executive Michael Froman and WE Family Offices CEO Maria Elena Lagomasino – with himself and Rasulo.
In his fight, Trian cited a loss of tens of billions in shareholder value, a drop in consensus earnings estimates for the next two years, and disappointing studio content as some of the reasons for his board push.
Succession was also a key issue for Peltz supporters after former CEO Bob Chapek was unceremoniously ousted in 2022.
Disney pushed back against many of Trian’s claims, saying it had made “significant progress” in turning around its business. Some changes have included implementing an ad-supported tier for its Disney+ streaming service as well as price increases on its streaming services and theme parks and crackdowns on password sharing.
The company has claimed that it is “actively engaged in the high-priority work of succession planning.” Bob Iger’s contract is set to expire at the end of 2026.
Investors have responded positively to the changes. Disney stock, up about 35% so far this year, was the Dow’s best year-to-date performer in the first quarter. Shares are currently hovering at 52-week highs.
Correction: A previous version of this article said Disney stock was trading at record highs. It has since been corrected to reflect levels trading at 52-week highs. We are sorry for the mistake.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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