Blackwells Capital, which is seeking seats on the board of the Walt Disney Co., said it has discovered that ValueAct Capital Management, an investment company publicly supporting Disney CEO Bob Iger in its proxy battle with Nelson Peltz's Trian Fund Management, has received $55 million to $95 million in undisclosed pension management fees from Disney.
Because of the lack of disclosure, Blackwells said shareholders should disregard ValueAct’s endorsement of Disney’s current board. It also questioned whether Disney’s board violated pension laws and Disney’s code of ethics.
Disney announced that it had entered into an information-sharing arrangement with ValueAct, a large Disney shareholder, in January. The announcement includes an endorsement of Disney’s board.
“The Board has repeatedly trumpeted ValueAct’s endorsement in proxy materials mailed to millions of shareholders, press releases, letters to shareholders, one-off engagements with shareholders and in a recent presentation delivered to proxy advisory firm Institutional Shareholder Services,” Blackwells said.
“ValueAct’s management of Disney’s pension funds is not disclosed anywhere in any of the referenced communications,“ Blackwells added. “Meanwhile, Disney’s entire shareholder franchise population has been led to believe that ValueAct provided its independent and unqualified support of the Board independently.”
A Disney spokesman did not respond to a request for comment.. A source familiar with ValueAct's situation said the company was no longer receiving fees for managing funds for Disney when the information sharing agreement was reached, and that Disney had withdrawn its pension money from ValueAct's funds.
Blackwells said it has been demanding disclosure about Disney’s relationship with ValueAct, but has been rebuffed by Disney’s board. It also criticized ValueAct for not disclosing its relationship with Disney, most recently when ValueAct appeared last week at the Council of Institutional Investors.
“We urge fellow shareholders to join us in demanding that the Board immediately take all necessary steps to file updated proxy materials with full disclosure of the ValueAct arrangement — so that shareholders can have the information needed to cast votes that are fully informed,” Blackwells said.
