At tomorrow’s Disney shareholder meeting we will learn which course the company will take in the future. (The meeting takes place Wednesday, April 2, 2024.)
Tomorrow we will know: Will Nelson Peltz’ proxy fight against CEO Bob Iger (pictured above) and the incumbent board of directors succeed? Peltz and his supporters demand seats on the board. Their criticisms: an anemic stock price, bungled succession planning, strategic errors and the board being too cozy with Iger to push back against him. Disney’s stock price is still 40% below its 2021 peak.
Voting is going on as we speak leading up to tomorrow’s big event. How will it turn out?
As of today (Tuesday morning), Iger and Disney seem to be pulling ahead of Peltz’ Trian Fund Management.
The eight major institutional investors in Disney will not play a big role in this fight, except for the influence their decisions might have on smaller investors. They only stand for 24% of the shares. And of these, only a few have announced how they vote, with a total of 4.8% of the votes for Iger and Disney, and 2.3% for Peltz and Trian.
What will decide this fight will be smaller entities and individual investors, holding 43% and 33% of the stock, respectively – and we don’t have a clue on how the rest of them will vote. As far as individual shareholders are concerned, they are known to be fiercely loyal to Disney, but some may be put off by skyrocketing park prices and Disney’s engagement in the culture wars.
We can tell the vote is close because of the vast amounts of money the opponents spend on courting shareholders: Disney has spent around $40 million, Trian about $20 million. However, it is not so close that Disney has offered Peltz a board seat to settle the fight.
On balance, it seems more likely Iger will succeed than Peltz, with a continuation of Iger’s current turn-around effort.
If Peltz’ gained one or two board seats, his major contribution would be operational (he has no particular media background) and making sure the board doesn’t rubber-stamp Iger’s ideas. That might not be a bad idea, given that the current board oversaw the decline of Disney’s stock price.
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