Disney won a hard-fought proxy battle against a group of activist investors who sought to secure seats on the company’s board of directors. The shareholder vote served as a legacy-defining victory for CEO Bob Iger.
Disney’s board triumphed by what the company called “a substantial margin” over the nominees put forward by Trian Fund Management and Blackwells Capital at its annual shareholder meeting.
Iger didn’t just beat Trian’s Nelson Peltz, but trounced him, according to a person familiar with the vote count.
Peltz’s attempt at a board seat received less than one-third of the vote, around 31 per cent, according to the source. Jay Rasulo, the former Disney finance chief who joined Peltz’s attempt, also lost by a wide margin, the person said.
Retail shareholders, which hold roughly 35 per cent of Disney stock, also voted overwhelmingly – 75 per cent – for Disney’s candidates. Still, board members typically get far bigger totals than three-quarters of the vote, suggesting Peltz captured some strong interest from Average Joe stockholders.
At the same time, Peltz spend gobs of cash on the fight, and the fact that he didn’t come particularly close to winning a board seat was surprising.
“This is by far Peltz’s biggest loss in a proxy fight,” the person familiar with the vote said.
Following its defeat, Trian issued a statement saying it was disappointed with the outcome but appreciated “the support and dialogue we have had with Disney stakeholders.”
“We are proud of the impact we have had in refocusing this company on value creation and good governance,” the statement read. “We will be watching the company’s performance and be focusing on its continued success.”
“With the distracting proxy contest now behind us, we’re eager to focus 100 per cent of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said.
A referendum on Iger
The investor fight that came to a head Wednesday was widely seen as a referendum on Iger, who is more than a year into his second stint as CEO.
Although Disney’s stock is up nearly 50 per cent over the past six months, some investors — including Trian and Blackwells — had hoped for higher returns and a more forceful shakeup inside the House of Mouse. In particular, Trian wanted to align pay with performance for key executives, restore Disney’s box office dominance and expand the company’s profit margin.
The biggest challenge came from Trian, which nominated its founder, 81-year-old corporate raider Peltz, to the board, along with Rasulo, a former Disney finance chief.
Peltz had expressed political differences with Iger that animated his campaign. In a recent interview with the Financial Times, Peltz disparaged “The Marvels” and “Black Panther” movies as pushing what Republicans often call a “woke” agenda.
“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? Why can’t I have Marvels that are both? Why do I need an all-Black cast?” Peltz told the FT.
Disney remains one of the most successful media behemoths on the planet, but it has also seen parts of its empire stumble in recent years.
Many of its problems come with the job running a sprawling media conglomerate in the 2020s: The once-lucrative tent pole of linear TV is rapidly crumbling, while its theoretical replacement, streaming services, are burning through cash. Higher interest rates have taken their toll, and movie theater audiences have grown bored with Disney’s more recent continued Marvel spinoffs and sequels.
“In some ways, the challenges are greater than I anticipated,” Iger said last year in an interview with CNBC.
A Disney logo forms part of a menu for the Disney Plus streaming service on a computer screen in Walpole, Mass., on Nov. 13, 2019. (AP-Steven Senne / The Canadian Press)
An expensive battle for the board
Peltz and other shareholders have seized on those stumbles to rally support for change. Trian Partners has said in a regulatory filing that it expected to spend about US$25 million on its campaign for board seats.
If the Trian group had succeeded in securing board seats, it would have been a seismic blow to Iger’s reputation as one of Hollywood’s most formidable power players. And it would have allowed the activists to potentially shape or disrupt Iger’s vision for the corporate turnaround.
But it wasn’t clear that Peltz’s plan — essentially maximizing profit and tying executive pay to performance — would be substantially different from what Iger was already doing.
A year ago, Iger announced he was laying off 7,000 staff and implementing a restructuring plan aimed at energizing Disney’s core creative departments.
There are early signs his turnaround plan is working. In February, Disney surprised investors with its first-quarter earnings, announcing it would grow earnings per share by 20 per cent this year.
Having fended off Peltz and Trian, at least for now, Iger likely has some runway to focus on the growth phase of his plan, at least until his contract runs out in 2026, when Iger promises he’ll step down. But one former Disney executive said the fight is far from over.
“The fact that it has gotten this much traction tells you that there is a lot of dissatisfaction,” the former executive, who requested anonymity to speak candidly, told CNN’s Oliver Darcy ahead of the vote.
CNN’s Samantha Delouya and Oliver Darcy contributed to this report.
Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.
The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs
It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.
The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.
Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.
Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.
This report by The Canadian Press was first published Oct. 22, 2024.
