Disney Faces Trian Fund Management: Walt Disney is bracing for a potential proxy battle as activist investor Nelson Peltz, through his Trian Fund Management, nominated himself and former Disney Chief Financial Officer James “Jay” Rasulo to Disney’s board. This move marks Peltz’s second attempt this year to influence the entertainment giant’s strategic direction.
Amid Disney’s critical juncture, attempting to revitalize creative franchises, make its streaming business profitable, and chart the digital future for ESPN, Peltz’s Trian Fund Management, holding approximately $3 billion worth of Disney shares, sees the need for substantial changes. Trian initially withdrew a bid for a board seat in February when Disney unveiled a comprehensive restructuring plan to address Peltz’s concerns.
The latest nominations of Peltz and Rasulo come as Disney faces pivotal challenges, requiring a delicate balance in navigating its creative ventures and digital initiatives. Trian Fund Management, being Disney’s largest active shareholder, expressed its dissatisfaction with the current board’s resistance to necessary changes.
“While doing the largest cost-cutting in the company’s history, there are so many issues, all at once,” noted Rich Greenfield, media analyst at LightShed Partners. The looming proxy battle adds complexity to Disney’s ongoing efforts.
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Rasulo, who joined Disney in 1986, served as Disney’s CFO from 2010 to 2015, overseeing key expansions, including the California Adventure theme park. Trian positions Peltz and Rasulo as candidates poised to drive cost-cutting measures, establish a sensible succession plan, and revamp Disney’s streaming operations.
Trian criticized Disney’s financial performance, citing lower per-share earnings than a decade ago, lagging margins in streaming and media operations, and underperforming movie releases. The fund argues that Disney’s board, closely aligned with former CEO Bob Iger, lacks focus, alignment, and accountability.
In response, Disney emphasized its diverse and highly qualified board’s focus on long-term performance, strategic growth initiatives, increasing shareholder value, and identifying a successor to Iger. Trian’s association with Marvel Entertainment’s Isaac Perlmutter, ousted in March, adds an interesting dynamic to the unfolding narrative.
Over the past year, Disney has undergone significant restructuring, aiming to achieve $7.5 billion in cost savings and enhance the profitability of its streaming business. As the battle lines are drawn, Disney finds itself at a crossroads, balancing tradition and innovation to secure its future in the rapidly evolving entertainment landscape.
Our Reader’s Queries
How much does Trian own of Disney?
Trian Fund Management, owned by Peltz, holds around $3 billion worth of Disney shares. In February, the media conglomerate announced a comprehensive restructuring plan that addressed Peltz’s concerns, causing him to withdraw his bid for a board seat.
Who is Trian Disney?
In a statement released on Thursday, Trian expressed its belief that The Walt Disney Co. has not lived up to its potential and has fallen behind its competitors. As a major shareholder with $3 billion in common stock, Trian is calling for action to address this underperformance.
The Walt Disney Co. has a diverse group of top stockholders, with The Vanguard Group, Inc. leading the pack with a 7.78% stake and 142,333,475 shares owned. BlackRock Fund Advisors follows closely behind with a 4.18% stake and 76,493,099 shares owned. SSgA Funds Management, Inc. holds a 3.97% stake and 72,607,200 shares owned, while Geode Capital Management LLC has a 1.85% stake and 33,935,205 shares owned. The remaining top stockholders also hold significant stakes in the company.
Who leads Disney?
Robert A. Iger is the current CEO of The Walt Disney Company. He previously held the same position from 2005 to 2020, and then served as Executive Chairman and Chairman of the Board until 2021. In November of 2022, he returned to the company as CEO.