Disney names new chairman as it prepares for proxy battle with Nelson Peltz

Activist investor Nelson Peltz will try to force his way onto Disney’s board after the company refused to nominate him as director, setting the stage for one of the biggest proxy fights in the US in years.

Peltz plans to take his bid for a board seat directly to investors, according to people briefed on his plans, and confront him with Bob Iger just months after he returns for a second term as CEO of the sprawling entertainment group.

Disney said Wednesday it was opposed to giving Peltz, the head of New York-based Trian Partners, a seat on its board. In an apparent attempt to stay ahead of the looming battle, the company named Nike veteran Mark Parker as its next chairman.

Parker will succeed Susan Arnold, whose leadership was questioned last year over the company’s handling of former CEO Bob Chapek’s recent months in office.

Peltz’s proxy battle against Disney would be one of the biggest boardroom battles since he worked his way into a directorship at consumer goods giant Procter & Gamble in 2018.

The month-long proxy fight, in which both sides spent more than $100 million to woo shareholders, captivated Wall Street, and Peltz eventually emerged victorious by a 0.002 percent margin before stepping down in 2021.

Disney said Arnold, the first woman to lead the entertainment group, will not stand for re-election as director at the company’s next annual meeting because the board’s term of office requires a 15-year term.

Her tenure as chair, which began in 2021 after Iger stepped down from the role, has been marked by the challenges brought on by the Covid-19 pandemic, which has hurt Disney’s theater and theme park businesses.

She came under scrutiny after the company extended Chapek’s contract last summer after a heated argument with the Florida governor over an education law his opponents labeled anti-LGBT, only to have him jailed in the to be released in November.

Parker, Nike CEO, has been on the Disney board for seven years. In a statement, Arnold said Parker “has helped [Disney] navigating effectively through a time of unprecedented change”.

Disney’s stock price has fallen nearly 40 percent over the past year as investors began to question the entertainment company’s heavy spending on its streaming business.

The stock’s poor performance caught the attention of activist investor Daniel Loeb, who successfully pushed Disney to add media veteran Carolyn Everson to its board last fall.

In a statement Wednesday, Disney said its management and board have worked with Peltz “numerous times.” It said it remains “open to working constructively” with Peltz but would not support his nomination to the board.

Parker spent 13 years at the helm of Nike, the world’s top-selling sportswear company, a period marked by sales growth but also a series of controversies, including an alleged ‘boys’ club’ culture and a doping scandal.

Parker, who joined the company in 1979 as a footwear designer, began his tenure as chief executive in 2006, overseeing the expansion of Nike’s online and direct-to-consumer sales. Total revenue more than doubled to $39.1 billion in 2019, the last full year of his tenure.

https://www.ft.com/content/50c993e0-92f0-4459-8e76-eaaf3e7291c1 Disney names new chairman as it prepares for proxy battle with Nelson Peltz

Adam Bradshaw

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