Glass Lewis Endorses Bob Iger in Disney Proxy Fight

Glass Lewis has endorsed the leadership efforts of Bob Iger and his team in an ongoing proxy fight ahead of Disney’s annual shareholder meeting next month. Glass, Lewis & Co. (Glass Lewis) recommended that shareholders vote the WHITE proxy card in support of all of Disney’s 12 director nominees (and no other nominees) at the Company’s Annual Meeting on April 3, 2024. In a report that was dated March 18, Glass Lewis said that Disney’s strategy, “measurable shifts” in the trajectory of Disney’s businesses since the return of Bob Iger, and strong recent additions to the Board are just some of the reason it supports Disney’s nominations.

The Walt Disney Company

“We are pleased that Glass Lewis recognizes the strength of our highly qualified nominees and supports our plans to return this iconic company to a period of sustained growth and shareholder value creation,” said Mark Parker, Chairman of The Walt Disney Company Board of Directors. “In its recommendation, Glass Lewis clearly identifies the strength of the diverse skillsets across our Board nominees, the credibility of our succession planning process and recent changes to the Board and compensation program and the promise of our recent efforts to bolster growth and value creation to position Disney for the future.”

The report highlighted several strategy and progress on key initiatives that Disney has made. These are designed to help Disney improve financial and operational performance. Glass Lewis shared the following points:

  • “…the Company is undertaking what we consider to be a credible effort to shift key operational priorities under the leadership of one of the most well-respected CEOs in the industry.”
  • “While it remains too early to say with certainty that each of those programs will prove successful, we believe it is similarly too early to suggest there exists adequate cause for investors to support alternate solicitations which may prove significantly less accretive to Disney’s trajectory, by comparison.”
  • “…we consider the subsequent 15 months [since Iger’s return] have provided management and an incrementally reconstituted board with adequate opportunity to launch a more credible succession program and develop, communicate and execute on several key initiatives which appear to reasonably target acknowledged operational and financial weaknesses at Disney.”

The report also focused on the governance practices, succession planning efforts, and the experience and engagement of the current Disney Board. This comes in contrast to the efforts of Nelson Peltz and his Trian Group. It said:

  • “We note the board has demonstrated a willingness to refresh its membership in the service of shareholder responsiveness and skill reconstitution with some reasonable regularity, resulting in an average tenure of less than 5 years across the incumbent slate.”
  • “…given what we believe is already a credible plan underway for Disney, we struggle to see many of Trian’s intentions as representing a likely net gain for investors.”
  • “Notwithstanding faults in Disney’s prior succession initiative, Trian’s intent to launch a new process is not clearly superior to, and may be heavily duplicative of, Disney’s ongoing effort, which is already tied to a special board committee composed of members we believe to be credible.”

Disney echoed Glass Lewis’ direction and said the following in a statement:

Disney recommends that shareholders vote FOR only its 12 nominees and withhold votes for the Trian Group and Blackwells nominees using the WHITE card, in line with the recommendation from Glass Lewis. In contrast to our highly qualified nominees and their successful track record, in our view, the alternate nominees do not bring additive skills or qualifications to the Disney Board and have no unique, meaningful plan to deliver superior shareholder value.

This most recent endorsement comes as the proxy fight between Disney and Nelson Peltz continues to wage on. As Nelson Peltz continues to attack Disney’s leadership and strategy, Disney has also shot back with a video highlighting the lack of experience of Peltz and other deficiencies found in his efforts to have himself and former Disney executive Jay Rasulo added to the Disney Board of Directors.

What do you think of this most recent update to this proxy fight at Disney? How do you think it will play out? How do you think it should play out? Share your thoughts and opinions in the comments below!