The Walt Disney Company has released a statement in response to a recommendation from Institutional Shareholder Services (ISS) that shareholders should vote for 11 of 12 nominees endorsed by Disney for its Board. In place of Maria Elena Lagomasino, it suggests electing activist investor Nelson Peltz to the Board of Directors. ISS does not endorse Peltz and his Trian Group’s plans to also elect former Disney executive Jay Rasulo to the Board as well.
In response to this recommendation, Disney released a statement that builds a case for its own nominations. In it, Chairman of the Board Mark Parker says, “While we’re heartened to see support for Michael Froman and ISS’ recommendation to withhold on dissident directors Jay Rasulo and the Blackwells’ nominees, we strongly believe that ISS reached the wrong conclusion in its recent report when it comes to adding Nelson Peltz to the board.” He continues saying, “In contrast to Glass Lewis, ISS fails to acknowledge the breadth of perspective and expertise Ms. Lagomasino adds to the Board. The strong recent performance and results overseen by the Disney Board demonstrate our focus on long-term shareholder value creation and succession planning and our commitment to good governance practices.”
Disney also argued that ISS contradicts itself when it says that the Board “comprises well-qualified and accomplished directors” and “does not lack a key skill set.” It also disagreed with ISS’s assessment that former Marvel executive Ike Perlmutter will have any influence on the board. Perlmutter owns 79% of Trian’s Disney shares. Disney says in a release that, “In its report, ISS agrees that Perlmutter’s involvement is ‘an unfortunate distraction’ and that he ‘may cast a baleful shadow over the Board’ if Peltz is elected. This dynamic is relevant to assessing the Trian Group’s nominees, as Mr. Perlmutter has a fraught history and longstanding personal agenda against Disney’s CEO, Robert A. Iger, which would likely inhibit Nelson Peltz from working constructively with Disney’s Board, threatening the company’s continued turnaround.”
Disney goes on to argue in favor of its own nominee, Maria Elena Lagomasino. Disney says:
Ms. Lagomasino is a seasoned financial leader with an extensive capital markets career that has been centered on fiduciary responsibility, honing an investor perspective, and deep expertise in corporate governance. She is a governance expert who brings a strong shareholder perspective to the Board as a founder of the Institute for the Fiduciary Standard, a think tank committed to promoting the vital importance of the fiduciary standard in investment and financial advice. She has, among other roles, served as the President and CEO of JPMorgan Private Bank, a Trustee of Carnegie Corporation of New York and the Chair of its Investment Committee overseeing $4b, and the CEO of WE Family Offices managing $14b for clients. She also serves as the Lead Independent Director of The Coca-Cola Company.
The Board strongly believes that replacing any of Disney’s nominees with any of the Trian Group or Blackwells nominees would deprive the company of skills and expertise required to help drive value for shareholders, a belief Glass Lewis’ report on March 18 also supports. Disney recommends that shareholders vote FOR only its 12 nominees and withhold votes for the Trian Group and Blackwells nominees using the WHITE proxy card.
This update comes as more shareholders and influential names in the Disney community have come out in support of Disney CEO Bob Iger and Disney’s slate of Board of Directors nominees. Just yesterday, actor Josh Gad and former Walt Disney Imagineering President Bob Weis both voiced their support for Bob Iger and his leadership. This proxy fight will ultimately be determined by shareholders who will vote leading up to the annual shareholder meeting on April 3, 2024. The recommendation by ISS could compliment Disney’s effort to retain its own nominees for the Board of Directors. Daps Magic will continue to follow this story and share updates as they become available.
What do you think about ISS seeking Nelson Peltz being added to Disney’s Board of Directors? Do you think it would be a good thing? Do you think shareholders should stick with the nominees that Disney advocates? How do you think this will play out? Share your thoughts and opinions in the comments below!
