The Walt Disney Co. defended its record as activist investor Nelson Peltz of Trian Fund Management is teaming up with former Disney executive Isaac Perlmutter to mount a potential proxy fight.
Trian said it owns $3 billion worth of Disney stock and talked on Thursday with Disney CEO Bob Iger. Trian said Disney’s board was willing to meet, but turned down a request to put Peltz, Trian’s founder and CEO, on the board.
“Since we gave Disney the opportunity to prove it could ‘right the ship’ last February, up to our re-engagement weeks ago, shareholders lost about $70 billion of value,” Trian said. “Trian intends to take our case for change directly to shareholders.”
Disney stock closed up less than a point Thursday. After the close of trading, Disney's board said it would pay stockholders a cash dividend of 30 cents a share.
In a statement, Disney said that Perlmutter, who was fired as chairman of Disney’s Marvel Entertainment unit as part of Disney’s cost-cutting program, owns 25 million of the 44 million Disney shares Peltz claims to control.
“This dynamic is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors, as Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger, which may be different than that of all other shareholders,” Disney said.
Disney also said that it has cut $7.5 billion in costs since Iger returned to the company and now plans to go from “a period of fixing to a new era of building.”
The cost-cutting plan convinced Peltz to back off from plans to mount a proxy battle last year.
The company added that “with one of the strongest balance sheets in the media sector, Disney expects free cash flow to approach pre-COVID levels in fiscal 2024, and the Board and management are steadfast in our commitment to ensuring The Walt Disney Company’s long-term success for the benefit of all our shareholders.”
On Wednesday, Disney announced that it added James Gorman, CEO of Morgan Stanley and Jeremy Darroch, former group chief executive of Sky, to its board.
“Their appointments reflect Disney’s commitment to a strong board focused on the long-term performance of the company, strategic growth initiatives, the succession planning process, and increasing shareholder value,” the company said.
Disney said its board will recommend that shareholders vote for its slate of directors at the company’s upcoming meeting.
Mark Parker, chairman of Disney''s board, said the dividend was a sign things were improving at Disney.
“This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth,” Parker said. “As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company’s future and prioritize meaningful value creation.”
