Disney faces proxy fight as Peltz pushes to join board

Nelson Peltz, an activist investor, is competing for a position on the Walt Disney Co. board of directors on the grounds that the business is dealing with issues it created for itself.

It has been just a few months since Disney brought back longstanding CEO Bob Iger to take the helm of the corporation once again before Peltz attempted to join the board. Disney appointed Mark Parker as its chairman and urged shareholders to vote against Peltz. Parker succeeds Susan Arnold, who won't run for reelection because of Disney's 15-year term limit regulations. Parker also holds the position of executive chairman at Nike Inc.
Disney's board will consist of 11 directors following Arnold's departure.

Peltz said that his prior expertise turning around businesses to improve performance and raise long-term shareholder value should make him a good choice for the Disney board. Peltz has previously engaged in successful proxy fights against household names like DuPont and Procter & Gamble. Peltz is requesting a one-year term, according to a regulatory filing from Trian Group, his company.

Trian asserts that despite Bob Iger's return to the CEO role two months ago, Disney's recent operating results have been disappointing and that the stock is virtually at an eight-year low.

Trian admits that Disney, which owns Marvel, Pixar, and ESPN, faces challenges as it transitions from traditional content distribution channels to streaming, but the group contends that given its intellectual property, diversified business model, and the theme park industry, Disney ought to be performing better.
Among other things, the company attacks Disney's recent woes as being self-inflicted, pointing to what it sees as unsuccessful succession planning efforts, a misguided direct-to-consumer approach, and "over-the-top" remuneration practices.
Trian contends that if 80-year-old Peltz is chosen to serve on the Disney board, he will want to improve accountability and openness. According to the group, Peltz would concentrate on creating a successful succession plan, matching pay with performance, and enhancing direct-to-consumer margins.

Disney has addressed some of Peltz's concerns and advises its shareholders not to support Peltz.
Parker will lead Disney's recently established succession planning group, the company also revealed on Wednesday. Parker previously served as Nike's chairman and CEO until 2020. Regarding the evaluation of internal and foreign candidates as well as CEO succession planning, the committee will provide advice to Disney's board.

Iger personally chose former CEO Bob Chapek, whose two-year term was plagued by conflicts, blunders, and declining financial performance, to succeed him. Just a few weeks after Disney's quarterly financial performance fell far short of Wall Street projections, Iger returned to Disney and ousted Chapek.
Despite the success of Disney's theme parks business, many visitors have been highly critical of price increases and other company decisions over the past two years.

In order to improve the public's view of its business, the corporation announced a number of improvements at its domestic theme parks on Tuesday.

The date for Disney's annual shareholders meeting has not yet been determined.