In a recent development, Walt Disney Co. DIS has publicly dismissed the board nominees of activist shareholders. The company’s CEO, Bob Iger, has communicated this decision in a preliminary proxy filing with the Securities and Exchange Commission.
What Happened: In a letter to investors, Iger outlined the company’s significant changes and cost-efficiency measures, as reported by Reuters on Tuesday. Disney is on track to achieve approximately $7.5 billion in cost reductions, a figure $2 billion higher than its initial target.
The company has prioritized making its streaming business profitable, transforming ESPN into a leading digital platform, enhancing the output and economics of its film studios, and accelerating growth at its theme parks.
Despite these efforts, Disney is facing challenges in its streaming and traditional television businesses, as well as at the movie box office. It is also dealing with a legal battle with Florida Governor Ron DeSantis and planning for a CEO succession.
Why It Matters: Disney’s board voted earlier in November to reject the nominees of activist investor Trian Fund Management, including its CEO Nelson Peltz and former Disney CFO Jay Rasulo. The board cited Peltz’s lack of strategic ideas for Disney and his limited experience in the media and technology sectors as reasons for the rejection.
An email sent by Benzinga to Trian Fund Management seeking comment didn’t elicit any response till the time of publishing this story.
Peltz, however, has been persistent in his efforts to secure a board seat, prompting Disney’s board to actively search for qualified candidates relevant to the media company. This led to the addition of James Gorman, former CEO of Morgan Stanley, and Jeremy Darroch, a veteran media executive, as directors.
Trian informed Disney on Dec. 14 of its intention to nominate Peltz and Rasulo to the board. Disney has criticized Rasulo’s perspective on the company as “stale” and raised concerns about his tenure as a director at iHeartMedia and his relationship with Peltz.
Peltz has been vocal about Disney’s underperformance, attributing it to the board’s close ties to Iger. He has proposed himself and Rasulo as offering expertise and a fresh perspective.
Photo via Shutterstock
Engineered by Benzinga Neuro, Edited by Pooja Rajkumari
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. Learn more.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
