The moment that it started to seem possible that Bob Iger could lose the battle to keep dissident shareholder Nelson Peltz off the Disney board was on March 21, when leading proxy advisory firm Institutional Shareholder Services announced its support for the activist investor. Days later, the California Public Employees Retirement System (CalPERS) took it a step further, saying it was voting its shares not only for Peltz but for his associate, former Disney CFO Jay Rasulo. Now that it’s over, it’s fair to ask: What were they thinking?
ISS explained its decision by rattling off a string of issues, but the big one was succession, which had been notoriously botched with the Bob Chapek interregnum after Iger had postponed his retirement no fewer than four times. “Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around,” ISS declared. CalPERS referenced seeking “fresh eyes” on the board.
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The succession grievance is more than fair. But what, exactly, did ISS and CalPERS expect Peltz to add to the mix? Did they seriously think that a Donald Trump-backing, Elon Musk-stanning Palm Beach octogenarian billionaire with no experience in entertainment could be trusted to deliver Disney into the right hands? A man backed by former Marvel chief Ike Perlmutter, a vitriolic, Iger-ousted, fellow Trump-supporting octogenarian Palm Beach billionaire?
ISS didn’t address the question of Perlmutter’s vitriol but did have something to say about Rasulo, Peltz’s sidekick in the fight. Almost comically, ISS noted that in a meeting, the former Disney CFO “came across as levelheaded and demonstrated no sign of resentment or ill will towards Iger” — the man who had denied him the top job nearly 10 years ago. Still, ISS advised shareholders not to back Rasulo, who at least had nearly 30 years of experience at Disney. “Though we do not have any concerns about his ability to serve as an objective director, we recognize that Rasulo’s potential presence might create added friction on the board,” ISS said. So that was a problem while the Peltz-Perlmutter combo platter was just a friendly nudge?
All this is not to say that Peltz lacks experience: He’s served on many boards, sometimes effectively. But Disney isn’t Heinz or Wendy’s. It depends on the creativity of mostly progressive artists, and at times the CEO walks a high wire, as Chapek’s debacle over Florida’s “Don’t Say Gay” law abundantly illustrated.
Perhaps to clarify how helpful he could be, Peltz gave an interview to the Financial Times in which he raised a few questions.”Why do I have to have a Marvel [movie] 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?” he asked.
If any of that sounds familiar, it might be because Perlmutter, when he was still at Disney, tried to block both Black Panther and Captain Marvel. Iger has written that he wanted both Black Panther and Captain Marvel put into production and told Perlmutter to get out of the way. Those films grossed $1.3 billion and $1.1 billion at the box office respectively, yet something (or someone) inspired Peltz to revisit the matter in 2024, long after the evidence was in.
Peltz also took a swipe at Marvel chief Kevin Feige, whose frustration with Perlmutter had led Iger to push the billionaire out of the company last year. While some Marvel films have underperformed recently, it’s hard to imagine any rational executive floating the idea of ditching the architect of what must be the most successful universe in entertainment history, worth $30 billion plus at the box office. Yet Peltz got the idea from somewhere that saying “I question [Feige’s] record” made him a more appealing choice for a board seat.
Neither ISS nor CalPERS responded to queries regarding their decisions. But another, far smaller activist investor, Blackwells Capital, warned that the proxy fight would only prove expensive and distracting. “Mindless, drum-beating activism is not the right strategy for shareholders,” Blackwells chief investment officer Jason Aintabi told THR in December. “Disney’s Board… should be allowed the time to focus on driving value at one of America’s most iconic companies without this fatuous sideshow.” In fact, the battle is believed to be the most expensive proxy fight in history, with Disney estimating its costs at around $40 million.
Iger and the board are now pledging that succession is a top priority — and Iger most likely means it this time. While he prevailed in the proxy fight, with more than 90 percent supporting his place on the board, the company is now dealing with a sort of unintentional replay of Time Warner’s 2013 ill-advised bake-off that pitted the then-heads of television, film and home entertainment against one another.
Speculation is already rampant about which internal candidate(s) might get the job: Disney entertainment co-chairs Dana Walden (TV) and Alan Bergman (film), ESPN chairman Jimmy Pitaro and/or parks chief Josh D’Amaro. Says one Disney veteran: “What’s next is a year of intense politicking beneath the surface because Bob will not tolerate [open] politicking. Everybody is frozen, not knowing who’s up and who’s down” because Iger plays such situations so close to the vest.
This executive thinks Peltz did himself in with “dumb, unforced errors about Black Marvel and female Marvel.” Still, Peltz mustered 31 percent of the vote. If Peltz had simply said he would focus on finding a replacement for Iger, this former insider believes he could have picked up 60 percent. Instead, he says, Peltz made himself look “ridiculous, out of touch and unhelpful.”
Peltz can console himself with the thought that he’s significantly richer, given Disney’s stock gains amid his proxy battle. And as he told CNBC’s Jim Cramer after his defeat, he’s still going to be waiting and watching. “We’ve got a new set of promises, and I hope they keep them,” Peltz said, “but if they don’t, you’ll see me again.”
Peltz Loses Twice — And Wins Too
Nov. 21, 2022 I Disney share price: $99.79
A day after Bob Iger rejoins Disney, replacing Bob Chapek, under whose tenure Disney’s share price began to slump.
Feb. 9, 2023 I Disney share price: $111.87
Nelson Peltz’s Trian abandons proxy fight the first time, and Disney shares went up.
Nov. 30, 2023 I Disney share price: $92.39
Trian signals a new fight as Disney shares once again slump amid a larger Wall Street pullback on streaming.
Jan. 16 I Disney share price: $90.29
Disney makes its case against Peltz, arguing that the 81-year-old activist does not have any media experience and suggests that ousted Marvel chairman Ike Perlmutter is behind the move.
Feb. 7 I Disney share price: $108.80
Disney’s share price jumps as Iger announces an animated Moana sequel, a $1.5 billion deal with Epic Games and the Taylor Swift: The Eras Tour movie on Disney+.
April 3 I Disney share price: $123.69
Peltz loses his proxy fight, with Iger securing 94 percent of the vote for his seat and Peltz only getting about 30 percent of the vote for his seat. Don’t feel too bad, though: The Wall Street Journal estimated that Peltz earned $300 million in profits over the course of the two campaigns, while the investor himself suggested that his firm’s earnings may be closer to $1 billion. — Alex Weprin
A version of this story first appeared in the April 10 issue of The Hollywood Reporter magazine. Click here to subscribe.
