A tense situation at the happiest place on earth

What’s all this fuss about a board seat?

Nelson Peltz wants to “restore the magic” at Disney.

Last week, the renowned 80-year-old activist investor revealed plans to launch a proxy fight for a seat on the company’s board, arguing Disney has “lost its way, resulting in a rapid deterioration in its financial performance.”

Disney quickly said it opposes Peltz’s move, and what ensued has been the securities filing equivalent of a rap battle.

What’s Peltz arguing?

Late last year, Peltz’s Trian Fund Management began accumulating an $800m stake in the company after it released poor earnings results.

On a 10-year time horizon, Peltz’s snazzy website points out, Disney stock has underperformed the S&P 500 and its media peers, overpaid executives, failed to craft a successful CEO succession, and eroded shareholder value with its $71B 21st Century Fox acquisition in 2019.

Disney disagreed…

… firing back on Tuesday by outlining what it views as CEO Bob Iger’s strong record of financial and creative success.

Using Peltz’s own arguments against him, Disney explained how, since 2005, the company has actually outperformed the S&P 500, 554% to 244%, as well as its media peers.

“Nelson Peltz does not understand Disney’s businesses,” the filing reads, among other disses.

It’s not Peltz’s first proxy rodeo

Previously, Peltz gained access to boards in contests at Heinz and Procter & Gamble, where he claims to have helped improve the companies’ financial performances.

Charles Elson, a corporate governance advocate at the University of Delaware, told Bloomberg that Peltz’s chances of winning a seat are good, given how Disney’s challenging 2022 may have soured investor sentiment.

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