The Walt Disney Company Board of Directors has amended their bylaws regarding the “nominations of directors by outside parties,” per Variety. The altered policies have been implemented as activist investor Nelson Peltz of Trian Fund Management seeks two seats on the company’s board.
The Walt Disney Company Board Amends Bylaws
The Walt Disney Company Board of Directors amended and restated their bylaws on November 30, with the updated policies taking effect on the same day. The revised bylines “enhance the procedural mechanics and disclosure requirements relating to business proposals submitted and director nominations made by stockholders,” a not exactly subtle reference to general proxy battles, and more specifically Peltz’s renewed charge for seats on the board.
The modified policies announcement expands on the enhancements, as business proposals and director nominations from stockholders now require “certain additional background information, disclosures, and representations regarding any proposing stockholders, any proposed director nominees and business and any other personals related to a stockholder’s solicitation of proxies” in addition to “any notice of director nomination [to] be accompanied by all written questionnaires required of the Company’s directors completed and signed by any proposed director nominees.”
Peltz first made a public run for a seat on The Walt Disney Company’s Board of Directors in January of 2023, with Trian issuing a statement highlighting Disney’s “self-inflicted” problems. He halted the proxy battle in February after Disney announced a major reorganizing and cost-cutting plan.
Trian again started pushing for multiple seats on the board (including one for Peltz) in early October. The firm this time garnered the support of former Marvel Entertainment Chairman Isaac “Ike” Perlmutter, which increased the number of Disney shares at Peltz and Trian’s disposal from 9.4 million to 33 million.
Trian requested two seats on The Walt Disney Company Board of Directors in November, which Disney denied during a meeting between the two parties on November 30. The asset management company issued a statement after the meeting, highlighting Disney’s recent “significant value destruction” before stating that they “intend to take [their] case for change directly to shareholders.”
The Walt Disney Company issued a statement in response, reiterating the conglomerate’s recent reorganization and entrance “into a new era of building.” The company addressed Peltz, Perlmutter, and Trian directly, writing the following:
Mr. Peltz, in partnership with Isaac Perlmutter, a former Disney executive, intends to take its case to shareholders. Mr. Perlmutter owns 78% of the shares that Mr. Peltz claims beneficial ownership of, or more than 25 million of the 33 million shares. This dynamic is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors, as Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger, which may be different than that of all other shareholders.
The Walt Disney Company
This section of the statement coincides with the amended bylaws, which require a stronger vetting process with regard to outside business proposals and director nominations.
The Walt Disney Company recently made additions to their Board of Directors, appointing Morgan Stanley Chairman and CEO James P. Gorman and veteran media executive Sir Jeremy Darroch to the board on November 30. They also declared their first dividend since 2019; Trian identified the removal of the dividend as one of their major problems with the company in their January statement.
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