Nelson Peltz nominates himself, ex-CFO to Disney board as fight against Bob Iger escalates

Walt Disney is bracing for a bitter proxy battle as activist investor Nelson Peltz is seeking two board seats, his firm Trian Fund Management said Thursday, pressing ahead with his second board challenge this year.

Trian, which owns roughly🌟 $3 billion worth of Disney shares, abandoned an earlier bid for one board seat in February when the med🎐ia conglomerate outlined a sweeping restructuring plan that addressed his criticisms.

The firm nominated Peltz and former Disney Chief Financial Officer James “Jay” Rasulo.

“As Disney’s largest active shareholder, we can no longer sit idly by as the incumbent directors and their hand-picked replacements stand in the way of necessary change,” Trian said in a statement, laying out the case for its two independent director candidates.

Disney’s stock price closed up 1.2% at $93.94.

After having signaling that he might nominate as many as four directors, Peltz cut the n✅umber to two. The decision came after Disney revamped itꦐs bylaws and after the company announced it was adding two new directors.

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Rasulo is a veteran theme park executive who moved to the role of chief financial officer in 2010, swapping jobs with then-CFO Tom Staggs. The exercise was viewed at the time as broadening each executive’s management experience as they vied for the No.2 job at Disney, positioning the winning candidate as a likely successor to Chief Executive Bob Iger. Rasulo left the company in 2015, after being passed over as chief operating officer. The victor in the executive sweepstake, Staggs, left Disney a year later, after learning he would not get the top job.

Together, Peltz and Rasulo are positioning themselves to other investors as the people the company needs now to cut costs, lay out a sensible succession plan and revamp the company’s streaming operations.

“Disney is one of the most iconic companies in the world, with unrivaled scale, unparalleled customer loyalty, irreplaceable intellectual property, and enviable commercial flywheel,” Trian said in a statement issued Thursday. “However, Disney has woefully underperformed its peers and its potential.”

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Trian criticized Disney’s financial performance, noting its per-share earnings in the most recent fiscal year are lower than a decade ago. Margins on the company’s streaming business and its media operations lag peers, Trian argues. And movie releases continue to underperform expectations.

“For shareholders, this subpar performance has destroyed value,” Trian wrote.

Trian argues that Disney’s non-management directors collectively own less than $15 million of Disney stock, and Iger also sold the majority of his ownership stake, suggesting the board and CEO “have no conviction that things will get better.”

Peltz’s fund argues that the “root cause of Disney’s underperformance” is that the board is too closely aligned with Iger and lacks “focus, alignment and accountability.”

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Disney issued a statement, saying its diverse and highly qualified board is focused on the long-term performance of the company, strategic growth initiatives including the company’s ongoing transformation of its businesses, increasing shareholder value, and finding a successor to Iger.

The company notes Trian is in partnership with Isaac Perlmutter, a longtime Marvel Entertainment executive who 𓃲was ousted in March.

Over the past 12 months, Disney has restructured the company and significantly re⛦duce🔯d costs. It told investors last month it is on ꧙track to achieve about $7.5 billion in cost savings – $2 billion more than its o🦩riginal target.

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Disney has also said it would work to make its streaming business profitable, build ESPN into the “pre-eminent” digital sports brand, improve the performance of its film studios and “turbocharge” growth at its theme parks, through $60 billion in investment over the next decade.

Trian said that since it gave Disney the time “to prove it could right the ship” in February, up to its re-engagement weeks ago, shareholders lost about $70 billion of value.

Disney hღad announced the appointment of James Gorman, chair and chief executive of Morgan Stanley, and Jeremy Darroch, a veteran media executive and former group chief executive of Sky, as new directors last month.