Nelson Peltz pushes for two new directors in Walt Disney proxy battle

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Activist hedge fund Trian Partners plans to nominate two candidates to Walt Disney’s board of directors, intensifying a campaign against the media group that is expected to be one of the most contested proxy battles in years.

Trian will put forward its co-founder Nelson Peltz and former Disney executive Jay Rasulo at the company’s annual shareholder meeting next year, it said on Thursday.

“The root cause of Disney’s underperformance, in our view, is a board that is too closely connected to a long-tenured [chief executive] and too disconnected from shareholders’ interests,” Trian wrote in a statement.

Disney said it would “review the proposed Trian nominees and provide a recommendation to the board as part of its governance process”.

Trian, which controls a roughly $3bn stake in Disney, has been at odds with the group since January. The battle cooled in February when Peltz called off a proxy fight after chief executive Bob Iger unveiled plans to revive the company. But last month the hedge fund renewed its campaign.

Corporate governance experts have accused Disney’s board of being too cosy with Iger, granting him contract extensions in 2013, 2014 and 2017. After he returned as chief executive in 2022 for what was meant to be a two-year term, the board extended his tenure until the end of 2026.

Following Peltz’s latest salvo, Iger last month named two new directors — outgoing Morgan Stanley chief executive James Gorman and former Sky CEO Sir Jeremy Darroch.

Peltz, who is known for his activist campaigns in the consumer goods sector at companies such as Wendy’s, Procter & Gamble and Unilever, had been criticised for not having enough entertainment industry knowledge to serve on Disney’s board. Nominating Rasulo, who had a long career at Disney and left as chief financial officer in 2015, could partly appease that criticism.

Rasulo was well-regarded by Wall Street and had been considered to be a potential successor to Iger, investors say. He joined Disney in 1986 and was named president of its parks and resorts business in 2002. He served as chief financial officer from 2010 until he resigned in 2015.

Rasulo is sometimes mentioned as an example of potential successors to Iger who grew frustrated and left the company.

Iger last month said he would slash an additional $2bn in costs at Disney, on top of last year’s $5.5bn in cuts which resulted in about 7,000 dismissals at the company.

Iger has recently told investors the bulk of the restructuring is behind the company, and he wanted to shift focus to “building our businesses again”. His top priority is to restore creativity at its movie studios, which have had a string of disappointments this year.

In a recent FT interview, Iger said he was doing what Peltz wanted. “We have a very solid succession process in place. We have reduced costs, we’re getting streaming on the path to profitability,” he said.

Disney shares are up about 6 per cent this year, underperforming the broader S&P 500, which has gained about 24 per cent.