Blackwells Capital, a Disney shareholder with plenty of opinions about who should sit on the company’s board of directors, blasted the rival Trian Group for its own board maneuvering.
In a press release Monday, Blackwells Chief Investment Officer Jason Aintabi said Trian co-founder Nelson Peltz has come up short in terms of suggesting ways for the media giant to right its ship. Trian, which owns about $3 billion in Disney stock, last week formally initiated a proxy war with Disney by nominating Peltz and former Disney CFO Jay Rasulo to the board. The firm plans to solicit support from a shareholder base that it believes has grown restless over the company’s lackluster stock performance.
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Trian has attacked Disney’s path under CEO Bob Iger, who returned to the top exec role in November 2022 in a bid to shore up the company after it slipped under his hand-picked successor, Bob Chapek. This is Round 2 for Trian, which began rattling cages in the waning days of 2022, relenting in early-2023 as Iger unveiled sweeping plans for cutbacks and some $7.5 billion in cost savings.
The company has battled a number of operational challenges, some of them universal among traditional media players and some of Disney’s own creation, with stumbles at Pixar and Marvel belonging to the latter category. Trian has also criticized the company’s stewardship of ESPN, the sports powerhouse that has steadily lost video subscribers and is seeking outside investors ahead of a leap into stand-alone streaming.
Despite having had at least two dozen formal interactions with Disney, Aintabi said, “Mr. Peltz has not offered a single strategic idea that would benefit shareholders. Astoundingly, Mr. Peltz recently claimed that he would like ‘a guy who doesn’t have media experience’ on the Disney board. We remind Mr. Peltz that Disney is a significant media company and, now more than any time in its history, needs Board members with deep media experience.”
Blackwells last Friday nominated three of its own candidates for Disney’s board: Tribeca Film Festival co-founder Craig Hatkoff; former major studio executive Jessica Schell; and Leah Solivan, former CEO of the tech firm TaskRabbit. In addition to touting its nominees, the Blackwells press release also criticized Disney for entering into an agreement this month with ValueAct Capital Management, in essence trading confidential information for the investment firm’s support of the company’s slate of board nominees. “Showering one shareholder with information that is withheld from all other shareholders will only make matters worse,” Aintabi said.
Last week, Disney urged shareholders in a preliminary proxy filing not to consider the activist nominees from either Trian or Blackwells. The company has put forward its own slate of 12 nominees. Along with Iger, the slate includes Mary Barra, Safra Catz, Amy Chang, Jeremy Darroch, Carolyn Everson, Michael Froman, James Gorman, Maria Elena Lagomasino, Calvin McDonald, Mark Parker and Derica Rice. Darroch, former Group CEO of Sky, and Gorman, who wrapped up his stint as Morgan Stanley CEO last month, are the two newest internal appointments.
Disney’s annual shareholder meeting is always a lively affair given the average attendee’s considerable affinity for the company’s consumer image. Some shareholders attend the events, which historically have rotated among a number of U.S. cities, in costume. This year’s edition, whose date and location have not yet been confirmed, could see acrimony between shareholders and management not seen since 2004, when former CEO Michael Eisner received a “no confidence” vote. That outcome paved the way for Iger to take the reins of the company.
Blackwells said Disney’s preliminary proxy “paints a picture of a board focused less on transforming the Company and more on preventing contrarian viewpoints and expertise from entering the boardroom.”
The company, which Aintabi founded in 2016, also invited former Marvel boss Ike Perlmutter, who represents most of Trian’s shares of Disney, to engage with its investment thesis for Disney and meet with Hatkoff, Schell and Solivan. Real estate, where Hatkoff in particular has experience, “represents up to 50% of the entire market value of Disney,” the Blackwells release asserted. Similarly, the firm maintained, Solivan’s familiarity with AI, VR and AR; and Schell’s exec tenure at Warner Bros. and Universal would provide experience not currently represented by any other board nominees.
Disney shares climbed 2% today to close at $95.07. They have risen 5% in 2024 to date and are trading at their highest level since mid-November. The company will deliver a closely watched report of financial results from its fiscal first quarter (ending December 31) on February 7.
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