This week, a very consequential shareholder vote on Wednesday will determine the outcome of one of the most costly proxy wars ever, which is expected to be a brutal struggle over Disney’s future.
The stock price of Disney (DIS), which has increased by almost 50% over the past six months, is in question because some investors are still looking for a larger return. If activist investors are successful in gaining a seat on the board of the corporation, they intend to upend the Magic Kingdom and its extensive empire, which includes theme parks, animation, and streaming services.
There will now be a vote on two opposing slates of board seats in opposition to Disney’s. One is headed by Trian Fund Management, which has put forward Jay Rasulo, a former chief financial officer of Disney, and its 81-year-old founder, the well-known billionaire corporate raider Nelson Peltz. Blackwells Capital is a modest challenger that is vying for three seats.
The main obstacle, though, is Peltz. Should they succeed, their partnership with former Marvel CEO Ike Perlmutter may bring about significant change at Disney.
Among other things, Peltz has chastised Disney for its recent theatrical failures and stated that the business needs to achieve “Netflix-like margins” with its Disney+ streaming service.The activist investor and his Trian fund seek to increase the company’s profit margin, reestablish Disney’s supremacy in the box office, and match important executives’ compensation to their performance.Additionally, he wants to make sure that CEO Bob Iger, who is well-known for hanging on past deadlines, actually walks away in 2026 when his contract expires.
However, analysts note that while the plan is similar to what Iger and his colleagues are already doing, it is unclear exactly how Peltz and Rasulo will make the necessary corrections.
Senior research analyst at Rosenblatt Securities Barton Crockett told CNN, “I don’t think [Peltz has] offered a turnaround plan that would be something that would get people saying, yeah, we need to get Peltz in there and change things.”
What is causing the fight?
Disney has suffered greatly in recent years due to a startling number of box office bombs, dwindling viewership on its linear television networks, which include ABC and ESPN, as well as significant losses as it expands its streaming business to take on Netflix and other competitors.
Peltz claims he’s hoping for a change in fortune.
“Disney has lost its way, despite its numerous benefits. In a letter to Disney shareholders this month, Trian stated, “Disney dropped from its #1 spot at the box office, was slow to enter the streaming market, and doubled down on linear TV at the wrong time.”
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