Disney Has Fallen Victim to Mutiny Before. Is It About To Happen Again?

Bob Iger’s return to The Walt Disney Company wasn’t without its fair share of casualties.

Since Iger came back, we’ve seen executive after executive leave the company, but it all started when then-CFO Christine McCarthy went to the Board of Directors calling for the resignation of Bob Chapek, who was CEO at the time. The mutiny shocked Disney fans and critics across the globe, so, is it about to happen again?

Nelson Peltz is no stranger to corporate politics, having once been engaged in a proxy battle against Disney for a seat on the company’s Board of Directors. Peltz, CEO of the Trian Group, invests heavily in public companies and then tries to help those companies become more efficient and profitable.

Back in February 2023, the Trian Group released a statement that said Michael Froman should be removed from the Board to make way for Peltz. Peltz took issue with recent decisions made by Disney, especially the acquisition of Fox and the succession planning for Iger. He wanted a spot on the Board so that he could have more of a say in the company.

©Disney

Disney did not support the moves Peltz made to win a seat on the Walt Disney Company Board of Directors. The company mailed a letter to shareholders urging them NOT to vote according to the instructions being provided to them by Nelson Peltz and his company, Trian Partners.

But suddenly, after the first-quarter earnings call of FY2023, Peltz changed his tune and announced that “the proxy fight [was] over.”

Peltz went on to say, “Now Disney plans to do everything we wanted them to do. We wish the very best to Bob [Iger], this management team, and the board. We will be watching. We will be rooting.”

However, it doesn’t appear as though Disney and Iger have been able to get rid of Peltz for good. The Wall Street Journal has reported that in recent months, Trian has increased its shares in Disney from 6.4 billion to 30 billion — valued at more than $2.5 billion. This makes Peltz’s Trian Group one of the largest shareholders in the company.

Not only that, but “according to people familiar with the matter,” Trian is expected to request multiple seats on Disney’s Board of Directors in the coming months.

©Trian Partners

If Disney denies this request, Trian could nominate directors that would be voted on during the next annual shareholder meeting, scheduled for the spring. Nominations take place from December 5th to January 4th, per the Journal.

It’s not clear why Peltz has increased his shares in the company or what he hopes to change at Disney, but we do know that as one of the largest stakeholders in the company, it’s possible he wants things to change to better suit investors. And, because we’ve seen him try before, he could use those shares and influence to push Disney’s directors out in favor of himself.

Disney stock prices have taken a dive lately, falling to their lowest point in nearly 10 years.

On October 4th, 2023, Disney stocks dropped to the lowest price since 2014. Around 2:30 PM EST, the company’s stocks hit $78.76. Throughout the day, the price rose slightly to $79.42.

Peltz has previously stated he feels Disney shares are “significantly undervalued” and that in order to get back on track, the company needs a board that is aligned with shareholder values.

It’s also worth keeping in mind that Trian has been known to support changes at companies it targets, like breaking up or selling underperforming divisions — something Iger has confirmed is on the table.

In an interview with CNBC, Iger mentioned that Disney is considering selling off its TV assets like the ABC network. Iger said the company would be “expansive” in how it thinks about traditional TV, with the door being left open to selling the networks it owns. “They may not be core to Disney,” he said.

Disney has yet to comment on this latest potential push from Peltz, but it’s possible we could learn more during the next company earnings call on November 8th, 2023.

We’ll continue to keep an eye on this situation as it unfolds, so stay tuned to AllEars for more.