We have been discussing the Disney’s recent acknowledgment that its political and social agenda has hurt profits at the company. In recent filings, the company agreed that there has been a “misalignment with public and consumer tastes and preferences,” including “consumers’ perceptions of our position on matters of public interest, including our efforts to achieve certain of our environmental and social goals.” There are also major disagreements over strategic financial decisions made by the company. Some shareholders appear eager for a change — and a challenge to CEO Bob Iger.
Trian Fund Management has announced that it will nominate Nelson Peltz, its founder, and Jay Rasulo, a former Disney chief financial officer, for Disney’s board. They are critics of Iger’s management and the direction of the company.
This is the second such campaign to challenge the authority of Iger and the direction of Disney by the shareholders.
What makes this challenge different is that former Marvel Entertainment chief Isaac “Ike” Perlmutter has thrown his significant holdings behind his friend Peltz.
In addition to a series of movie flops criticized for their underlying social narratives, the company is struggling with losses in its streaming business. The streaming business has lost a staggering $10 billion in the last four years. While profits for the company are up slightly, it is underperforming overall in comparison to prior years.
The challengers allege that Iger has a hand-picked board with little independence from the CEO. Peltz declared “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, and peers and competitors continue to outperform. Shareholder-led board refreshment with focused and aligned directors who are accountable to the owners of the company is long overdue.”
The move at Disney could spur other shareholders to demand more accountability from corporate boards.