Disney chief Bob Iger on Wednesday prevailed in a bitter proxy battle with activist investor Nelson Peltz, who was seeking a board seat after arguing the entertainment giant had underperformed in the streaming-television era.
Instead, investors voted to re-elect all 12 of Disney’s current board members, announced at the company’s annual shareholder meeting, ending a multimillion-dollar, mud-slinging battle launched by Peltz, the billionaire CEO of Trian Management.
“With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said.
Iger received 94% of votes cast, while Disney director Maria Elena Lagomasino, whose seat Trian contested, won 63%, The Wall Street Journal reported. Peltz nabbed just 31%.
“While we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders,” a rep for Trian said.
Disney shares fell more than 3%, but the stock is up approximately 50% over the past six months.
While Disney’s board held off the activists’ challenge, it still must find a successor to the 72-year-old Iger before his scheduled retirement at the end of 2026. Board members recently sought to reassure shareholders that they took the matter seriously and were vetting candidates.
The company also must show progress in its efforts to make the streaming television unit profitable and to launch an app for its flagship ESPN sports network, analysts said.
“Iger now has a window by which to execute his recovery plan,” said Dan Coatsworth, analyst at investment platform AJ Bell. “But failure to produce the desired results within the next 12 months could see investors switch allegiance.”
Disney is evaluating four internal candidates for Iger’s job. They include Dana Walden, the company’s highly respected head of TV, ESPN’s Jimmy Pitaro, theme parks boss Josh D’Amaro and film head Alan Bergman.
Peltz and Blackwells Capitals were seeking five seats between them on Disney’s board. The activists argued the $225 billion media company has bungled its CEO succession planning, lost its creative spark and failed to properly harness new technology.
“All we want is for Disney to get back to making great content and delighting consumers and to creating sustainable long-term value for all of us,” Peltz said at the meeting before the results were announced.
“Regardless of the outcome of today’s vote, Trian will be watching the company’s performance,” he added.
The tussle was a closely watched referendum on Disney’s efforts to reinvigorate its film and television franchises, make its streaming business profitable and find partners to help build sports network ESPN’s digital future.
Both sides spent millions of dollars on campaigns trying to persuade voters and launched public and personal attacks.
Peltz had been seeking a board seat for himself and for former Disney Chief Financial Officer Jay Rasulo. Disney said the pair lacked the necessary skills, offered “nothing new” in their suggestions for improvement and noted that Rasulo had been passed over to succeed Iger.
Peltz at one point responded that Disney was “stupid” in opposing him, arguing that he was trying to help Iger.
“It was clear the shareholders decided that they like what Iger is doing and want to give him more time, and they see Peltz as a distraction from their long-term building,” said Bill George, former CEO of medical device maker Medtronic and executive fellow at Harvard Business School.
Trian was Disney’s fifth-biggest shareholder with a 1.76% stake as of Dec. 31, according to LSEG data. The hedge fund’s $3 billion bet on Disney was largely responsible for the firm’s underperformance last year relative to its activist.