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https://www.msn.com/en-us/money/companies/disney-board-fight-turns-into-a- contest-as-peltz-gathers-support/ar-BB1klnmO

(Bloomberg) -- After steering Walt Disney Co. through one of its worst
slumps in history, Chief Executive Officer Bob Iger looked poised to coast through a fight for board seats with billionaire activist Nelson Peltz.

Iger had won the support of proxy adviser Glass Lewis & Co., JPMorgan
Chase & Co. CEO Jamie Dimon and large shareholders such as George Lucas, Laurene Powell Jobs and members of the Disney family.

Now it’s looking more like a fight than a walk in the theme park. On
Thursday, proxy adviser Institutional Shareholder Services threw its
support to Peltz, the founder of Trian Fund Management LP, which controls
some $3.5 billion worth of Disney stock. The activist also marshaled
backing from current and former directors of Procter & Gamble Co.,
Mondelez International Inc. and Janus Henderson Group Plc, where he
previously had board roles.

“Some of us, like you, were skeptical about Nelson and were initially
opposed to the notion of having him on our boards,” the supporters wrote
in a letter released by Trian. “However, after having worked with Nelson,
we know that our concerns were misplaced.”

The support gives Peltz a better shot at winning a board seat at Disney’s
April 3 annual meeting. In addition to himself, he has nominated former
Disney finance chief Jay Rasulo, a 30-year company veteran who left in
2015.

For investors, the vote is a chance to to endorse or indict Iger’s second
stint as Disney’s leader by electing the company-backed slate of board
members or handing seats to either billionaire Peltz or Blackwells
Capital, an activist that owns a much smaller Disney stake worth about $18 million.

In February, Disney delivered better than expected financial results and promised its streaming business would see a profit in the coming months.
Disney shares, while down more than 40% from their all-time high in 2021,
hit a 52-week high recently at around $117.

In an emailed statement Thursday, Disney Chairman Mark Parker responded to
the support Peltz has garnered.

“We strongly believe that ISS reached the wrong conclusion in its recent
report when it comes to adding Nelson Peltz to the board,” he wrote.

Both sides have sought to rally shareholders. Disney bought ads on
financial news websites, including Bloomberg.com, and on popular Hollywood podcasts. It even created a video featuring the cartoon duck Ludwig Von
Drake, part of an effort to reach small investors less familiar with the
proxy voting process.

Trian, meanwhile, has been promoting its RestoreTheMagic.com website and offering up online interviews with Peltz and Rasulo.

Blackwells Capital has released its suggestions for the company’s
management, including potentially spinning off its resort properties into
a real estate investment trust. Disney declined to comment on those
specific suggestions, but has urged investors to not support Blackwells’
three board nominees. Glass Lewis and ISS both recommended that
shareholders vote against appointing Blackwells’ nominees.

Ahead of the shareholder vote, here’s a tally of Iger’s performance and
plans compared with Peltz’s grievances and proposals as outlined in
Trian’s 133-page white paper:

Trian’s ArgumentDisney’s Response
Disney’s board lacks oversight, focus and accountability. In November, Disney appointed Morgan Stanley Chairman James Gorman and former Sky CEO
Jeremy Darroch to its board, with Gorman serving as a key member of a succession planning committee charged with replacing Iger after his
contract ends in 2026. Gorman oversaw a CEO transition at Morgan Stanley
that concluded in 2023.
Disney’s financial results have deteriorated in recent years across key
metrics including earnings-per-share, shareholder returns and profit
margins. Disney shares lost 17% of their value over the five years
ended in December and earnings fell by half. After Peltz launched his
campaign, Disney cut $7.5 billion in annual costs, eliminated 8,000 jobs
and reinstated its dividend. In February, the company reported earnings
and a 2024 profit forecast that exceeded Wall Street estimates. The shares
are up 29% this year.
Disney’s $71.3 billion acquisition of 21st Century Fox from the Murdochs
was a bust. Disney said at the time of the 2019 takeover that the company was gaining a trove of programming that would increase the appeal of its Disney+ streaming service. Disney also said the deal would increase access
to key markets like India. The company has since shut down foreign
channels, begun licensing shows it acquired to rivals and accepted a
smaller stake in a merged Indian TV business. One consolation: Disney
gained the high-grossing Avatar franchise as part of the deal.
Disney has failed to articulate a clear strategy for its streaming
business. After losing more than $11 billion in that segment since the launch of Disney+ in 2019, the company’s losses narrowed to $216 million
in the most recent quarter. Disney is “extremely confident” its streaming business will turn profitable this fiscal year.
Disney’s board should conduct a review of the company’s studio operations
and culture to improve the performance of its films after titles from
prized franchises such as Marvel and Pixar failed in theaters in recent
years. Disney elevated former Searchlight Pictures executive David
Greenbaum to lead the company’s live-action film titles, replacing the
former head of that business. Iger has said Disney will make fewer
pictures and focus on quality.
Disney should explore partnerships for its non-core TV assets. Iger
floated the idea of selling traditional TV networks like ABC last year,
and drew some interested parties. He later reversed course, saying the
networks were important for the company’s strategy and that he’d only
suggested the idea to see the reaction from investors.
Disney should set and articulate financial targets for its $60 billion investment in its parks business. When Disney announced it would invest $60 billion in its parks over the next decade, the shares dropped due to a
lack of clarity on how, when and where the money would be spent. Disney
has said it will begin a parks expansion next year, but few details of its plans are known.
Disney should set a free-cash-flow target beyond its 2024 forecast. Iger said at an investor event this month that Disney was pacing ahead of its
$8 billion free-cash-flow forecast for fiscal 2024. The company hasn’t
provided details beyond 2024.


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Thank you for cleaning up the disaster of the 2008-2017 Obama / Biden
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Under Barack Obama's leadership, the United States of America became the
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