Activist Investor Nelson Peltz Nominates Himself for Disney Board, Outlines Initiatives and Targets
Nelson Peltz, a prominent activist investor, has made a bold move by nominating himself for a seat on Disney’s board of directors. Peltz, along with former Disney Chief Financial Officer Jay Rasulo, has outlined a series of initiatives and performance targets that they plan to pursue if elected. In a proxy filing, Peltz and Rasulo expressed their commitment to completing a successful CEO succession, aligning management pay with performance, and achieving “Netflix-like margins” by 2027.
One of the key issues that Peltz aims to address is the delayed retirement of CEO Bob Iger. Peltz believes that Iger’s consistent postponement of his retirement date, as well as his return after the firing of former CEO Bob Chapek, has hindered the company’s progress. By advocating for a successful CEO succession, Peltz hopes to bring stability and clarity to Disney’s leadership.
Another area of concern for Peltz is the alignment of management pay with performance. He points out that Iger received a hefty $31.6 million pay package last year, despite Disney’s stock underperforming the S&P 500. Peltz believes that tying executive compensation to the company’s performance will incentivize better results and create value for shareholders.
Peltz also sees Netflix as Disney’s biggest competition and aims to achieve “Netflix-like margins” of 15% to 20% by 2027. This ambitious target reflects Peltz’s belief in the potential of Disney’s streaming platform, Disney+. He believes that by focusing on profitability and streamlining operations, Disney can compete effectively in the digital entertainment space.
The proxy battle between Peltz and Disney comes at a time when CEO Bob Iger is implementing significant restructuring efforts to make Disney+ profitable. The company has already undergone thousands of layoffs as part of its cost-cutting measures. Peltz’s nomination and proposed initiatives add another layer of complexity to Disney’s ongoing transformation.
In a recent interview on CNBC’s “Squawk Box,” Peltz criticized Disney’s current board oversight, describing it as “awful.” While acknowledging that he lacks media experience, Peltz believes that the current board also lacks the necessary expertise to navigate the challenges facing the company. He is confident that his fresh perspective and business acumen can contribute to Disney’s success.
Peltz’s proxy filing also touched on the future of ESPN, which he considers the “crown jewel” of Disney. He emphasized the importance of developing a solid business plan and payback period for the platform, aligning with CEO Bob Iger’s goal of turning ESPN into the leading digital sports platform.
Furthermore, Peltz called for a board-led review of studio creativity to restore leadership accountability and regain Disney’s position as a leader in the box office. By executing a clear vision for the brand’s theme parks, Peltz and Rasulo aim to achieve high-single digit operating income growth.
Interestingly, Peltz recently visited Disney World and shared his observations. Despite not having any special privileges or tour guides, he was impressed by the friendliness of the employees and the overall experience. Peltz humorously suggested that their positive attitude might be due to not owning any Disney stock.
Disney has thus far rejected Peltz’s push to join the board, but the story is still developing. It remains to be seen how this proxy battle will unfold and whether Peltz’s initiatives and targets will gain traction. As Disney continues to navigate the challenges of the evolving media landscape, the involvement of activist investors like Peltz adds an intriguing dimension to the company’s future.
