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Nelson Peltz Nominates Himself and Jay Rasulo to Disney’s Board as Proxy Fight Officially Kicks Off

Disney is officially facing its second proxy fight in as many years, with Nelson Peltz’s Trian Partners officially nominating the activist investor and former Disney CFO Jay Rasulo to the entertainment company’s board of directors.

Trian formally nominated Peltz and Rasulo on Thursday morning, after previously announcing their plans in December. Trian’s preliminary proxy filing did not name which current Disney directors it intends to replace, with those names to come at a later date.

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Trian also revealed its rationale for pursuing another proxy fight, once again highlighting Disney’s lagging stock performance, as well as a relative lack of ownership of Disney shares from the company’s board.

While those were both mentioned last year, the company also said that it intends to push Disney to “target and achieve Netflix-like margins of 15-20% by FY 2027” in its streaming business; “finally complete a successful CEO succession,” something with which the board is engaged; launch a “board-led review of creative processes and structure to restore leadership accountability” at the film business; and to provide a clear path for ESPN and the parks business.

“The Trian Nominees are committed to working with other members of the Board and Disney’s management team in order to reorient the Company towards delighting its consumers again and driving significant value for its owners,” Trian wrote in the filing. “Most importantly, we believe that they would bring greater focus, alignment, and accountability to the boardroom.”

In a statement, Peltz promised a “full presentation to shareholders.”

“But to be clear, Disney needs to again be the beacon of strategic clarity and exceptional execution it once was,” he added. “No Disney shareholder should be content with the current strategic muddle or have to endure failed execution without accountability.”

Disney released its own preliminary proxy filing Jan. 16, formally recommending its slate of board nominees, and rejecting Trian and Peltz. Disney said in the filing that “in a two year quest for a seat on the Disney Board, Mr. Peltz had not actually presented a single strategic idea for Disney; that his assessment of Disney seemed oblivious to the ongoing secular change in the media industry.”

Trian and Peltz have the support and backing of former Marvel chair Ike Perlmutter, who has given voting control of his shares to the activist. Disney has garnered the support of another activist, ValueAct, which has pledged to support Disney’s nominees.

According to Trian’s filing, a significant portion of the shares it is using in its fight are controlled by Perlmutter or entities controlled by Perlmutter.

Some Disney executives have been skeptical of Perlmutter’s motives, noting that he and Iger clashed, and that Perlmutter was laid off from the company last year as part of cost-saving measures.

Trian addressed the questions in the filing:

“As to Disney’s earlier questions regarding Trian’s relationship with Mr. Perlmutter, [Trian executive] Schorr explained that Mr. Perlmutter had entrusted his Shares to Trian because Mr. Perlmutter believed that Mr. Peltz and Trian were best positioned to help the Company’s leadership navigate Disney’s challenges and opportunities and generate enhanced value for all of the Company’s shareholders, and furthermore that Trian would not be nominating Mr. Perlmutter to the Board.”

Trian’s filing also noted that Peltz’s daughter, Nicola Peltz Beckham, and son, Will Peltz, currenly receive residual payments for their works on Disney shows. The residuals are “in amounts not exceeding $120,000,” per Trian. Nicole Peltz appeared in the Hulu show Welcome to Chippendales, among other programs. Will Peltz also appeared in that program, as well as the FX show Mayans F.C.

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