Disney has emerged victorious in a boardroom dispute against critics who had leveled accusations against the media giant, alleging mismanagement of its streaming strategy and a decline in its creative innovation.
Activist investors, including Nelson Peltz of Trian Management, aimed to secure seats on the company’s board of directors, alleging a close alignment between the current board and Disney’s leadership.
They vowed to advocate for priorities such as increased profitability.
However, a majority of shareholders opted to retain the existing board during the shareholder meeting held on Wednesday.
Disney announced that its board nominees had been elected by a significant margin. According to a source familiar with the results, only 31% of votes supported Mr. Peltz for a board seat.
Nevertheless, the contentious battle raised significant concerns about challenges within Disney’s film and television divisions, casting a shadow over the legacy of long-time leader Bob Iger.
“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 shareholders,” Mr Peltz said at the shareholder meeting on Wednesday.
Mr. Peltz is renowned for his confrontations with major corporations like fast-food chain Wendy’s and Procter & Gamble, the manufacturer of brands such as Pampers and Vick’s.
He criticized Disney for its sluggish response as pay television subscribers began to decline in 2015. He also argued that significant ventures, such as Mr. Iger’s acquisition of a substantial portion of Rupert Murdoch’s media empire in 2019, did not yield positive results.
Trian and another entity, Blackwells Capital, accused the board of overcompensating executives and mishandling the selection of a new CEO. They advocated for an evaluation of Disney’s studio operations, citing a series of films that failed to meet box office expectations.
Simultaneously, Disney faced pressure from right-wing activists who accused the company of embracing “woke” ideologies. This concern over Disney’s approach to cultural issues prompted numerous inquiries from shareholders at the Wednesday meeting. During the meeting, separate proposals regarding Disney’s political and charitable contributions and its policies regarding transgender employees were also rejected.
Disney encouraged shareholders to vote against these proposals and to support the current board, arguing that introducing new members could disrupt the company’s progress.
“As we gather today, we stand on a far more solid foundation,” Mr Iger said in remarks at the meeting after the results were announced. “We have turned the corner and entered a new positive era for the Walt Disney company.”
Mr Iger had retired as chief executive in 2020, but Disney’s board abruptly re-installed him as boss in 2022, ousting his successor amid complaints about the company’s streaming business and other issues.
Soon after his return Mr Iger announced a reorganisation and thousands of job cuts in a bid to improve the company’s profits. He is now planning to step aside at the end of 2026.
“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,” Mr Iger said in a statement after the victory.
The investor battle was costly for both sides.
Trian projected an expenditure of $25 million in its efforts to sway shareholders, launching advertising campaigns on social media platforms targeting ordinary investors. Meanwhile, Disney asserted its spending could reach up to $40 million.
Ultimately, Mr. Iger prevailed, garnering support from significant shareholders, including Star Wars creator George Lucas, Laurene Powell Jobs (the widow of Steve Jobs), and members of the Disney family.
Following the outcome, Mr. Peltz expressed disappointment but stated he was “proud” of the impact his campaign had made. His efforts received a last-minute endorsement from Elon Musk.