Disney prevailed Wednesday in its months-long and expensive proxy battle with activist investor Nelson Peltz, as shareholders elected CEO Bob Iger and the company’s other nominees to the media giant’s board of directors.
The outcome of the vote, announced within the first half-hour of Disney’s annual shareholders meeting, ended a boardroom fight years in the making. With Iger and the company pitted against Peltz and his asset management fund Trian Partners, the two sides faced off in a fierce showdown over the control of two seats on Disney’s board and the future of the 100-year-old company.
Disney and Iger won.
“With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said in a statement.
The company’s complete slate of nominees was elected by a substantial margin to year-long terms on Disney’s board, said Horacio Gutierrez, Disney’s chief legal and compliance officer. CNBC, citing unnamed sources familiar with the matter, reports that Peltz lost by a two-to-one margin. The final results of the vote will be filed with the Securities and Exchange Commission within the next four business days.
Peltz was able to make one last pitch to investors before the outcome was announced.
“All we want is for Disney to get back to making great content and delighting consumers and for Disney to create sustainable long term value for all of its shareholders,” Peltz said. “It is undeniable that the shareholders have suffered over the last few years as the stock dropped from $200 per share.”
Disney and Iger entered the day already looking increasingly likely to prevail, having won the backing of the company’s two largest shareholders, Vanguard and BlackRock. Addressing investors, Peltz said that despite the outcome of the vote, his campaign had a positive impact on the company.
Disney stock has risen about 50% since he launched his proxy bid last fall.
“While we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders,” Trian Partners, which controls a $3.5 billion stake in the company, said in a statement. “We will be watching the Company’s performance and be focusing on its continued success.”
Trian formally nominated Peltz and ex-Disney CFO Jay Rasulo for two seats on the board in January. Had Petlz’s bid succeeded, he planned to complete a successful CEO succession, align performance-based compensation with shareholder value, and develop a strategy to reach margins similar to Netflix’s 15-20% by 2027.
Wall Street had mixed reactions to the outcome. Disney stock closed down about 3% on Wednesday following the announcement.
“The succession plan to take Disney forward in a highly competitive market will now be decided by the same players that helped bring in Bob Chapek, who only lasted two years as CEO,” Brain Mulberry, the chief Portfolio Manager at Zacks Investment Management, told Quartz in a statement.
Iger’s eventual succession had become a major sticking point in the proxy battle, which The Wall Street Journal reports could be the most expensive in history. Iger, who has been with the media giant for four decades, served as its CEO from 2005 to 2020. He later became executive chairman before retiring in 2021. Iger returned to the company just a year later to serve a two-year term, which has since been extended. He is now expected to leave the company in 2026.
Guggenheim Partners raised its target price for Disney stock from $125 per share to $140 right before the meeting. The financial services company said in a note on Wednesday that it expected all of Disney’s nominees to win.
Disney announced its 12 board nominees in January, including Iger. A few days later, Trian Partners — which owns a roughly $3.5 billion stake in Disney — nominated its co-founder Peltz and Rasulo for board seats.
Disney responded to his bid by launching a website asking shareholders to not vote for the investment firm’s candidates. “Nelson Peltz has a long history of attacking companies to the ultimate detriment of shareholder value,” the company said in a video on the website.
The company further bashed Peltz in March. “The surest way to impede our creative progress is oversight from an 81-year-old hedge fund manager with no creative experience,” Disney said in response to comments Peltz made in an interview with The Financial Times.
Peltz criticized the track record of Marvel Studios President Kevin Feige in the interview, while specifically taking shots at the studio’s movies The Marvels and Black Panther.
He went on to say, “Why do I have to have a Marvel that’s all women? Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?”
JPMorgan Chase CEO Jamie Dimon, Star Wars creator George Lucas, and even some Disney heirs all endorsed the company’s candidates while praising Iger.
In a statement last month, Trian said it “supports Mr. Iger as a candidate for the Board and as CEO.” The firm added that “this campaign is not about Mr. Iger, nor is it a referendum on his leadership.”
The investment firm BlackRock, the company’s second-largest shareholder, cast its votes for Disney’s picks. BlackRock owns about 78 million shares in the company, or the equivalent of $9.5 billion.
Baltimore-based money manager T. Rowe Price — which owns 9.3 million Disney shares — also said it would support Disney, joining Lucas, former Disney CEO Michael Eisner, and Laurene Powell Jobs.
Peltz and Rasulo received votes from the nation’s largest public pension fund, the California Public Employees’ Retirement System (CalPERS), and the global asset manager Neuberger Berman.
-William Gavin contributed to this article.