Nelson Peltz and Trian Push Back Against Disney’s Narrative They Want To Replace Bob Iger

During the ongoing proxy battle between Disney and Trian Partners and Blackwell Capital, the Walt Disney Company repeatedly focused mostly on only one threat: the idea that it was Bob Iger who was in danger of replacement. Now, Nelson Peltz and Trian have put out a statement once again refuting that notion. 

According to Peltz, they have no desire to replace Bob Iger, and Disney continues to focus on that when they know it isn’t true. Yet they say nothing about the board members they want to replace. 

Trian is trying to replace board members Maria Elena Lagomasino and Michael B.G. Froman. Bob Iger keeps complaining that Peltz and Jay Rasulo lack media experience, but neither Logomasino nor Froman have it either. 

In fact, they have the fewest qualifications on the board, and they both lack in streaming, direct-to-consumer, and media. These are the same reasons Bob Iger claims that Peltz and Rasulo are not qualified for the Walt Disney Board. 

Peltz is now speaking out regarding the narrative, saying:

“..Disney spends so much time and ink defending Mr. Iger – while saying almost nothing about the two director candidates whose reelection Trian is challenging – is both troubling and telling. This campaign is not about Mr. Iger, nor is it a referendum on his leadership. And in all events, Disney is, and must be, more than just one person, especially one whose contract expires in less than two short years.”

According to Peltz, Iger himself asked him to speak to the board on a prior occasion about shareholder sentiment in the media industry in 2019, when Disney was doing well and Peltz wasn’t the “enemy.”

“In 2019, Mr. Peltz was asked by Mr. Iger to address the Disney Board about shareholder sentiment in the media industry. Mr. Peltz was happy to do so, and the discussion was seemingly productive and interactive.”

If true, it seems like Iger recognized his knowledge before?

You can read the press release below:

“The Trian Group,¹ which beneficially owns over $3.5 billion of common stock in The Walt Disney Company (NYSE: DIS), today reaffirmed its call for change in the composition of the Board of Directors of Disney and the commitment of its nominees, Nelson Peltz and Jay Rasulo, to work constructively with the Company’s Board and leadership team to drive long-term, sustainable value creation.

Trian believes that Disney is the most advantaged consumer entertainment company in the world. Over the last one, three, five and ten years, however, Disney has woefully underperformed its potential and its peers,² costing shareholders more than $200 billion in value.³

Accordingly, Trian believes that change is needed. Ahead of the Disney annual meeting of shareholders on April 3, 2024, Trian encourages all shareholders to vote FOR its two candidates, Mr. Peltz and Mr. Rasulo, and to withhold support from two incumbent directors, Maria Elena Lagomasino and Michael B.G. Froman.

This Campaign is About the Board

Trian believes Disney’s problems lay at the feet of the Board, which lacks focus, alignment and accountability. Although the Board members are accomplished professionals, they are extraordinarily busy, have invested almost none of their own money in Disney stock and have failed to heed investor input. The result has been questionable strategic and capital allocation decisions, including the investment of $200 billion of capital without any discernible return, the demonstrable lack of alignment between executive compensation⁴ and shareholder value creation and financial results in the most recent year that pale in comparison to the results five years ago.⁵

Most recently, the Board botched its most important job – CEO succession – by installing Bob Chapek in that role seemingly without appropriate vetting or oversight.⁶ The Board then renewed Mr. Chapek’s contract just months before firing him for poor performance. Ultimately, the Board had to call Bob Iger out of retirement to fill the void.

In this election contest, Disney has emphasized that Mr. Iger is admired and respected (including, for example, by service providers⁷ and advisors⁸), which we do not doubt. Trian supports Mr. Iger as a candidate for the Board and as CEO. That Disney spends so much time and ink defending Mr. Iger – while saying almost nothing about the two director candidates whose reelection Trian is challenging – is both troubling and telling. This campaign is not about Mr. Iger, nor is it a referendum on his leadership. And in all events, Disney is, and must be, more than just one person, especially one whose contract expires in less than two short years.

This election is a board election and the question before shareholders is: who should serve on the Board, helping the company on behalf of shareholders?

We have nominated two candidates, Mr. Peltz and Mr. Rasulo, who have a shareholder mindset, extensive, relevant experience and a willingness to ask tough questions and set demanding goals. Mr. Peltz has served on eleven public company boards, including at some of the most respected companies in the world. Mr. Rasulo is the former Chief Financial Officer of Disney and knows the business well. Disney’s board seemingly does not want their help – claiming they will be “disruptive” – and prefers instead its hand-selected incumbents, an expert in foreign affairs and an advisor to wealthy families.

Choosing between these slates, and voting for change versus more of the same, is really what this election is about.

Our Nominees Will Work Constructively with the Board

Our nominees’ goal is to delight Disney’s customers and to enhance value for all shareholders. To that end, Mr. Peltz and Mr. Rasulo look forward to working collaboratively with the executive team and Board – as they have done many times before at other companies – when they are elected.

Mr. Rasulo worked in that manner at Disney previously. Mr. Rasulo and Mr. Iger worked side-by-side every day for more than five years as CFO and CEO, collaborating for the good of Disney shareholders. If elected, Mr. Rasulo would bring his extensive knowledge of Disney and its culture, people, operations and customers to the boardroom, and be an independent source of knowledge about the industry and the company.

In 2019, Mr. Peltz was asked by Mr. Iger to address the Disney Board about shareholder sentiment in the media industry. Mr. Peltz was happy to do so, and the discussion was seemingly productive and interactive.

More generally, Mr. Peltz has a reputation as a productive and insightful corporate director. His colleagues on corporate boards, across industries, have regularly renominated him as a director, and he has been elected by shareholders more than 50 times to serve as their representative – almost always garnering more than 90% of the vote.⁹ He did not amass that record by being disruptive or unproductive.

Disney knows from its own experience that Mr. Peltz is a willing and helpful collaborator. But if there were any doubt, last week, thirteen of Mr. Peltz’s current and former colleagues wrote an open letter to Disney’s Board in which they said of Mr. Peltz that he:

“entered the boardroom every meeting with an open mind, a focus on growth for the benefit of stakeholders and a commitment to working constructively towards our common goal of creating long-term shareholder value.”¹⁰

Our Nominees Can Help Disney

We believe that reelecting the existing Board will have the predictable effect of leading to more of the same: questionable strategic and capital allocation decisions, poor executive compensation alignment and suboptimal succession planning.

Trian is convinced that Mr. Peltz and Mr. Rasulo can assist Disney with its challenges and help ensure a brighter future. We are not alone in thinking that.

In their open letter to the Disney Board, Mr. Peltz’s current and former colleagues wrote that:

“the companies for which we served as board members alongside Nelson were improved because of his presence on the board.”¹¹

Jim Cramer on CNBC confirmed this sentiment among the executives with whom Mr. Peltz has worked:

“I interviewed the CEOs of Procter & Gamble, the CEO of Mondelēz and the CEO of Heinz, and Nelson Peltz was on [the] board of all those and all those CEOs said that he did an amazing job asking questions and stopping them from doing stupid things.”¹²

This sentiment was affirmed, independently, by James Stewart of The New York Times, who interviewed “dozens of former executives at companies targeted by Mr. Peltz”¹³ and found that “all said he had bolstered results…”¹⁴

Commentators familiar with Jay Rasulo’s track record have similarly touted his valuable experience. Robbie Whelan of The Wall Street Journal noted that Mr. Rasulo grew “intimately familiar with Disney over the course of his nearly 30-year tenure,”¹⁵ and Bob Iger himself has referred to Mr. Rasulo as a “valued colleague and friend, as well as a vital contributor to Disney’s success”¹⁶ and commended him for his “strategic acumen and savvy insight.”¹⁷

Shareholders Should Vote FOR Nelson Peltz and Jay Rasulo

We are pleased that our campaign has garnered support from accomplished independent commentators and research firms, including Institutional Shareholder Services (ISS), the largest and most influential proxy advisory firm, which wrote that:

“[Nelson] Peltz, as a significant shareholder, could be additive to [Disney’s] succession process, providing assurance to other investors that the board is properly engaged this time around. He could also help evaluate future capital allocation decisions.”¹⁸

Like ISS, we believe that Disney’s Board needs a “catalyst”¹⁹ to improve its effectiveness – directors who will bring new perspectives, ask tough questions and encourage open-minded debate.

Ultimately, the question for shareholders as they cast their vote is: given the company’s record of underperformance, which directors can best ensure a brighter future for Disney and its shareholders? Who can best exercise independent judgment on behalf of shareholders to ensure Disney is on the right strategic path, executing well and with a compensation plan that aligns management’s incentives with the creation of shareholder value?

We do not believe that the current Board, which has presided over deteriorating performance and a failed succession, can address Disney’s challenges. To improve the focus, alignment and accountability of the Board, we believe Disney needs new, independent directors.

Our nominees, Nelson Peltz and Jay Rasulo, are dedicated to ensuring a better future for this iconic company. Help us elect Mr. Peltz and Mr. Rasulo, and together, we can Restore the Magic at Disney.

To ensure the election of Nelson Peltz and Jay Rasulo, it is essential that shareholders vote “FOR” Nelson Peltz and Jay Rasulo, and “WITHHOLD” on Michael B.G. Froman, Maria Elena Lagomasino, and all three Blackwells Nominees. As Disney’s annual meeting is less than two weeks away, it is important that shareholders vote TODAY. Every vote is important. Shareholders must submit their vote no later than April 2, 2024, at 11:59pm ET. Only your last vote counts.

For more information, including voting instructions, visit our website: www.RestoreTheMagic.com.”

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Source: Yahoo news