Billionaire Nelson Peltz Loses His War Against Disney

For more than a year, activist investor Nelson Peltz has tussled with Disney executives in an effort to gain more influence over the company, culminating in an all-out proxy battle to secure two seats on the board. Based on preliminary results released on Wednesday, shareholders rejected Peltz’s advance, the company said. They also rejected Peltz’s attempt to win a seat for former Disney executive James Rasulo.

Peltz’s firm, Trian, argued that Disney CEO Bob Iger has failed to establish an adequate succession plan and that the firm has mismanaged executive compensation and expenses. Iger initially served as CEO for 15 years before stepping down in 2020, when he passed the torch to Bob Chapek. Less than three years later, he returned after growing unhappy with Chapek’s performance.

Disney’s battle with Peltz heated up in 2022, when the billionaire first broached the topic of board representation. The company rebuffed him, and it appeared the two sides might square off. Trian even sought to embarrass Iger, claiming in a public filing that he tried to schedule a board meeting around plans “to sail his yacht off the coast of New Zealand.”

Eventually, the parties resolved their differences, and Peltz temporarily backed away. But he ultimately determined he wanted more control over Disney’s operations. When the company officially rejected his request for a board seat, he took the matter directly to shareholders.

“It saddens me that the board didn’t welcome me because our goal is just to work with them, to help them and to help them make the company better,” he previously told CNBC.

Peltz—worth an estimated $1.7 billion—has exerted similar pressure on major firms like Procter & Gamble, PepsiCo, and DuPont.

In recent months, the billionaire has assailed Disney’s strategy on his website, RestoreTheMagic.com, and has questioned the creative direction at its subsidiary Marvel.

“People go to watch a movie or a show to be entertained…They don’t go to get a message,” he said in an interview with the Financial Times, taking aim at its increased focus on diverse storytelling. “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?”

Disney retorted by calling Peltz a “bully” and urging stockholders to deny his petition. The company noted that he has no experience in the media industry.

Peltz admitted that was true. “I don’t claim to have any,” he said. He argued that, even with its extensive industry knowledge, several of Disney’s recent pictures have failed to perform. “If that comes with media experience, I want a guy who doesn’t have media experience,” he said.

With more than $8 billion in assets under management, Trian has a reputation as an aggressive corporate antagonist, which may explain why several of Walt Disney’s descendants pushed shareholders to rebuff Peltz.

“Disney stories are filled with heroes and villains. We know who the villains are in this story, and we know they cannot be entrusted with protecting this company’s rich legacy or guiding its bright future,” they wrote in February. The activists, they asserted, “are not interested in preserving the Disney magic, but stripping it to the bone to make a quick profit for themselves.”

Trian disputed that characterization, saying its track record proves that it invests in companies and “helps them grow and thrive for the long term.”

Stephen Bainbridge, a professor at the UCLA School of Law with expertise in corporate governance, previously told The Daily Beast that Peltz is “definitely at the aggressive end” of hedge fund activists. Still, he noted, in many instances the firm has pushed for “changes that were regarded as helpful.”

Peltz, whose daughter, Nicola, is married to the son of David and Victoria Beckham, will need to regroup before determining his next move. Perhaps for the time being, he will focus his energy on the upcoming presidential election.

After the attack on the U.S. Capitol in 2021, Peltz assailed former President Donald Trump. Nevertheless, he announced last month that he will probably vote for Trump again.