Disney Says Nelson Peltz On Board Would “Threaten Strategic Management” At Crucial Time As Proxy Battle Boils


With Nelson Peltz angling for a seat on Disney’s board, the company today blasted the activist investor, his firm Trian Group, and his son, Matthew Peltz, whom Trian is proposing as a possible alternate candidate.

“The Disney Board of Directors does not endorse Nelson Peltz (or his son Matthew, who is running as an alternate Mr. Peltz may swap in) as a nominee, and believes the election of either Mr. Peltz or his son would threaten the strategic management of Disney during a period of important change in the media landscape,” the company said today.

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Disney shareholders will vote on the boad of directors at the next annual meeting. The event is usually in early March but may be delayed a bit this year. The company is proposing slate of 11 directors — it used to be 12 until the retirement of former board chair Susan Arnold. Peltz has gotten himself added to the ballot and the battle, called a proxy fight, is heating up.

The 11 directors with the most votes win, so Peltz has to basically unseat one one Disney’s nominees and has targeted Michael Froman, citing lack of board experience and urging shareholdrs to withold support for Froman and vote for him instead.

Both Disney and Trian are sending all Disney shareholders voting cards with the full list of board candidates and their recommendations. Shareholders can use card either to vote.

“It is ESSENTIAL that you VOTE “FOR” Nelson Peltz and “Withhold” on Michael B.G Froman. If you do not ”WITHHOLD” on Michael B.G. Froman, this could jeopardize the goal of electing Nelson Peltz to the Board. Even if you vote “FOR” Nelson,” Trian urged in an SEC filing today.

Its justification: “Trian Group believes Mr. Froman has no experience as a public company director outside of Disney, and, moreover, has served as a member of the Governance and Nominating Committee of the Board, which the Trian Group believes has overseen weak corporate governance at the Company. In contrast, Nelson Peltz has served on numerous public company boards over the last several years, including The Procter & Gamble Company, Unilever plc, Mondelēz International, Inc. and The Wendy’s Company, and has a long track record of working with management teams and boards in turning around companies with strong underlying fundamentals that are facing meaningful challenges. In addition, having Mr. Peltz, who has a significant ownership stake of Disney stock, will bring a shareowner mentality to the boardroom. Accordingly, we believe that Mr. Peltz’s experience makes him better positioned than Mr. Froman to help the Board enhance accountability, align executive compensation with shareholders’ interests, plan for leadership succession, address operational challenges and improve capital allocation practices.”

Disney, for its part, said the attack on Froman is inexplicable, calling him “a highly valued member of the Board with deep background in global trade and international business, who the Board believes is far better qualified than either Mr. Peltz or his son to help drive value for shareholders. Neither Mr. Peltz nor his son offer skills or experience additive to the Disney Board that replace the decades-long experience of Mr. Froman.”

“Mr. Froman’s decades of experience in business and international affairs are critical to helping Disney assess the risks and opportunities in an increasingly complex global marketplace, given its strategic focus on global growth of its customer base and innovation in changing markets.”

“Mr. Froman has served as U.S. Trade Representative, where he worked on trade-related issues to advance the interests of the U.S. government and American businesses in foreign markets, including on issues affecting the digital economy, the usage and protection of data, and intellectual property rights, all of which are critical to Disney’s business. He served as Assistant to the President of the United States and as Deputy National Security Advisor for International Economic Policy, a position held jointly at the National Security Council and the National Economic Council. He also served as Chief Executive Officer of CitiInsurance and Chief Operating Officer of Citigroup’s alternative investments business, and is currently Vice Chairman and President, Strategic Growth, Mastercard Inc. He works closely with his fellow members of the Disney Board to guide the company, providing expert advice on complex international economic, policy and regulatory affairs to assist with Disney’s international strategy and operations, among other matters.”

Trian started nudging Disney last year, seeking meetings first with former CEO Bob Chapek, then current Bob Iger, and board members. Marvel chairman Isaac Perlmutter helped arrange some of the meetings.

Trian has been restrained in criticizing Iger but has come out swinging at the board — again today for what it claims are myriad failings including: poor leadership planning; failing to instill a culture of accountability; owning very little Disney stock; and not heeding constructive shareholder input.

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