Disney Responds To Unsolicited Nominations Of Nelson Peltz And Ex-Disney CFO James Rasulo To Board Of Directors, Defends Existing Board As “Highly Qualified”

Dade Hayes
·3 min read
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Disney has formally responded to activist shareholder Trian Fund Management’s unsolicited effort to nominate its co-founder, Nelson Peltz, and ex-Disney CFO James Rasulo to the media giant’s board of directors.

The company said a board committee will review the nominations, but it also made a point of noting that Trian has teamed up with former Marvel Entertainment boss Ike Perlmutter. Disney earlier this year rejected a request from Trian for a presence on the board. It has described Perlmutter as having a “longstanding personal agenda” against CEO Bob Iger.

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Perlmutter, a longtime associate of Peltz’s, was removed from the Disney executive ranks by Iger, reportedly after clashing with Marvel chief Kevin Feige over film budgets. Rasulo, meanwhile, at one time was considered a potential successor to Iger. His run as an executive lasted from 1986 to 2015, including the last five of those years as CFO. He had also served a stint as Chairman of the company’s Parks and Resorts division.

In a statement (read it in full below), Disney defended its existing board. “Disney has an experienced, diverse, and highly qualified Board that is focused on the long-term performance of the Company, strategic growth initiatives including the ongoing transformation of its businesses, the succession planning process, and increasing shareholder value,” the company said.

The board’s Governance and Nominating Committee, which evaluates all director nominations, will review the Trian nominees and then provide a recommendation to the board, Disney said. Board elections are held at the company’s annual shareholder meeting. The 2024 meeting date has not yet been set, but the clash between Iger and Trian has the potential to become a storyline at the event. Trian owns about $3 billion in Disney stock.

Disney recently announced that former Sky chief Jeremy Darroch and Morgan Stanley CEO James Gorman have been appointed to the board, while Francis A. deSouza plans to surrender his seat at the end of his term. The appointments of Darroch and Gorman will take effect on January 9 and February 5, 2024, respectively.

At last month’s New York Times DealBook Summit, Iger addressed the activist effort, which is in its second phase. An initial push in 2022, marked by Trian memorably accusing Iger of being unavailable to meet due to his plans to “sail his yacht off the coast of New Zealand,” died down before a proxy battle could be waged.

Trian’s push was further blunted this year as Iger implemented some of the cost-cutting and strategic initiatives Trian had been advocating. Overall cost reductions have totaled $7.5 billion as the company has laid off thousands of workers and undergone significant restructuring. Peltz has not targeted Iger or the Disney management team specifically, but instead has criticized several strategic moves, including the $71.3 billion acquisition of most of 21st Century Fox.

“There’s a qualification level that is required to sit on the Disney board,” Iger said at DealBook. “And the board makes decisions about who’s qualified and who isn’t qualified to be on the board. And if Nelson officially requests the board seat, I’m sure the board will go through a process to determine whether he is whether he should have a role on the board or not. But it’s not like we’ve got a number of empty seats — ‘Come on in, join the Disney board. Have fun.’”

A day after the conference, Disney issued a statement calling attention to Trian’s alliance with Perlmutter, who has “voiced his longstanding personal agenda against” Iger. That agenda, the company said, “may be different than that of all other shareholders.”

Here’s Disney’s new statement in full:

The Walt Disney Company confirmed today that Trian Fund Management, L.P., alongside certain affiliates, including Trian’s previously disclosed partnership with Isaac Perlmutter pursuant to which it obtained beneficial ownership of Mr. Perlmutter’s Disney shares (collectively, “Trian”), has provided notice of its intent to nominate two individuals for election to the Company’s Board of Directors at the 2024 Annual Meeting of Shareholders.

Disney has an experienced, diverse, and highly qualified Board that is focused on the long-term performance of the Company, strategic growth initiatives including the ongoing transformation of its businesses, the succession planning process, and increasing shareholder value.

The Governance and Nominating Committee, which evaluates director nominations, will review the proposed Trian nominees and provide a recommendation to the Board as part of its governance process.

The Company expects to file preliminary materials with respect to the 2024 Annual Meeting of Shareholders with the Securities and Exchange Commission (“SEC”), which will include the Board’s recommended slate of director nominees. Disney shareholders are not required to take any action at this time.

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