Disney's heirs snub activist investors and throw their support behind Bob Iger
The proxy fight between activist investors and the Walt Disney Co.’s current board is heating up as the heirs of Walt and Roy Disney, who founded the company in 1923, have publicly announced their support for Bob Iger.
In a pair of letters released to shareholders on Thursday, nine of the founders' grandchildren — including Abigail Disney and Roy Disney — have forcefully rejected the campaign currently being waged by Trian Partners CEO Nelson Peltz and others.
Calling them "hedge-fund-backed opportunists," the heirs have raised concerns, saying, "They are are not interested in preserving the Disney magic, but stripping it to the bone to make a quick profit for themselves."
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In a statement, a spokesperson for Trian Partners said, "We love Disney and recognize building on its rich history of delighting loyal fans is essential to its future success. Trian invests in great companies like Disney and helps them grow and thrive for the long term — and we have the track record to prove it at companies like P&G, Heinz and Mondelez."
Peltz, 81, is attempting to gain two board seats, one for himself and another for Jay Rasulo, a former Disney chief financial officer, and to implement a raft of proposed changes.
In their letters, the Disney heirs characterize the proxy fight as a pitched battle for not simply the future of the company but its soul.
"Disney stories are filled with heroes and villains. We know who the villains are in this story, and we know they cannot be entrusted with protecting this company’s rich legacy or guiding its bright future," said one letter to Disney shareholders, viewed by The Times.
"We’re old enough to remember the bitter episode four decades ago when another corporate raider, Saul Steinberg — who, as it so happens, was good friends with one of the current activists, Nelson Peltz — launched a hostile takeover attempt of Disney and threatened to break apart the company. He was defeated, much as these activists must be defeated today," the letter said.
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A longtime activist investor who has successfully waged proxy battles with Heinz and Procter & Gamble, Peltz launched his first proxy campaign against Disney in January 2023, after an unsuccessful attempt to gain a board seat the previous year. The company’s share price was languishing and by September, it hit an eight-year low, falling below $80. Trian owned about 9.4 million shares worth some $900 million; that number later swelled to 32 million shares valued at $3.6 billion when former Marvel Entertainment Chairman Isaac “Ike’’ Perlmutter joined forces with Peltz, entrusting his Disney shares to Trian.
(Perlmutter was dismissed from his role at Marvel last March as part of a larger restructuring. Disney has claimed that the former Marvel executive has a personal agenda against Iger.)
Peltz has been unsparing in his criticism, calling out Disney’s “over-the-top” compensation practices, failure to implement a succession plan (in July, the board extended Iger’s contract for two more years until 2026) and weak corporate governance.
He highlighted “self-inflicted” wounds such as the $71.3-billion acquisition of 21st Century Fox in 2019, a string of box-office bombs and the entertainment giant’s money-losing streaming business.
Last February Peltz withdrew his demands when Disney announced plans to eliminate 7,000 jobs, slash $5.5 billion from its budget and restore dividends.
He renewed his efforts to shake up the boardroom after the company's share price continued to stall.
Earlier this month Walt Disney Co. reported stronger-than-expected earnings that, along with several headline-making announcements, sent Disney’s shares soaring, achieving the stock’s best day on Wall Street in three years.
In a second letter, four of the children of Walt's eldest daughter, Diane Disney Miller, wrote, "Bob Iger has grown this company in a modern world, and he continues to maintain a balance of creativity and profit. It is still a company based on the desire to entertain and explore. There have been challenging times, but this current management has adjusted and grown through those challenges."
According to a source familiar with the matter, Trian had offered to meet with Shamrock Holdings, the investment fund associated with the Disney family, but they declined.
The proxy fight will come to a conclusion at Disney's annual shareholder meeting in April.
This story originally appeared in Los Angeles Times.