Disney Fends Off Activist Investor for Second Time in 2 Years

The activist investor Nelson Peltz and Ike Perlmutter, the former chairman of Marvel Entertainment, have failed to infiltrate Disney’s board for the second time in two years, losing a tensely fought contest for support of the company’s shareholders as part of a campaign to alter its direction.

The Walt Disney Company said on Wednesday that shareholders had voted to elect its entire slate of board nominees by a “substantial” margin — thus rejecting a demand by Mr. Peltz’s hedge fund, Trian Partners, for two seats and endorsing a growth plan that the company’s chief executive, Robert A. Iger, has laid out.

Trian controls about $3.5 billion in Disney stock, a vast majority of which is owned by Mr. Perlmutter. He and Mr. Peltz, both 81, had also tried to shake up the Disney board last year, abandoning the effort after Mr. Iger unveiled a sweeping turnaround plan.

“With the distracting proxy contest now behind us, we’re eager to focus 100 percent of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Mr. Iger said.

Mr. Peltz received 31 percent of the vote from shareholders who thought he should join the company’s board, according to a preliminary count. In a statement, Trian said that it was “disappointed” with the outcome but that it was “proud of the impact we have had in refocusing this company on value creation and good governance.”

Disney shares declined about 2 percent after the results were announced.

The latest Disney-Trian contest devolved into one of the largest, priciest and nastiest in history. Trian spent about $25 million on its offensive, while Disney priced its defense at up to $40 million, according to securities filings. Both sides inundated investors with political-style campaign materials, including mailings, emails, social media ads, videos and phone calls.

Trian harshly criticized Disney’s streaming strategy, lagging stock price and succession planning. Disney denounced Trian as “disruptive and destructive” and portrayed Mr. Perlmutter as being driven by revenge.

Mr. Perlmutter sold Marvel to Disney in 2009 for $4 billion and joined the company’s leadership team. In 2012, Disney negotiated settlements with three Black consumer products executives who accused Mr. Perlmutter of mistreatment. In 2016, Mr. Perlmutter sought to fire Kevin Feige, Marvel’s movie chairman, for spending too much ($250 million) to make “Captain America: Civil War,” which sold $1.2 billion in tickets. Mr. Iger overruled him. Mr. Perlmutter also resisted making inclusion-oriented movies like “Black Panther,” which collected $1.4 billion.

By winning the support of shareholders on Wednesday, Mr. Iger can push forward with his growth plan for Disney — one that includes overhauling ESPN for the streaming era, spending $60 billion on new theme park attractions and cruise ships and finding a new generation of hit movies.

But the victory did not leave Mr. Iger, 73, without bruises.

At first, he seemed poised to easily win. Prominent Disney investors like George Lucas and Laurene Powell Jobs publicly offered support. Disney family members, including Abigail E. Disney, blasted Mr. Peltz and his associates as “wolves in sheep’s clothing.” Analysts (Guggenheim, Macquarie) and shareholder advisory firms (Glass Lewis, ValueEdge) threw cold water on Trian’s campaign.

It became a much closer contest after ISS, an influential shareholder advisory firm, partly sided with Trian. Mr. Peltz also won the backing of Egan-Jones, another advisory; it faulted Disney for unnecessarily veering into what it called “the killing fields of the culture wars,” a reference to Disney’s blowup with Gov. Ron DeSantis of Florida over an education law that opponents labeled “Don’t Say Gay.”

One large investor that backed Mr. Peltz, the California Public Employees’ Retirement System, or CalPERS, which owns about 6.6 million Disney shares, said the company would benefit from “fresh eyes.” It added that Mr. Peltz was “capable of leading needed change in corporate governance.”

In the end, Disney’s two biggest shareholders, Vanguard and BlackRock, which own a combined 12 percent of the company’s shares, ignored ISS and voted for Mr. Iger’s slate of directors. Mr. Iger also won crucial backing from small-fry investors: An unusually large amount of Disney shares (up to 40 percent) are held by individuals, many of them fans of the company’s movies and theme parks. (On average among public companies, individuals own closer to 15 percent of the shares.)

More than 75 percent of individual shareholders voted to elect the Disney slate, according to the preliminary tally.

Mr. Iger returned to run the company in 2022 — two years after he had retired — when the Disney board fired his hand-selected successor, Bob Chapek. During his earlier, 15-year stint, Mr. Iger delayed his retirement four times and seemed reluctant to leave when he did.

Ever since his return, Mr. Iger has encountered a seemingly nonstop array of challenges: repeated attacks by activist investors, sparring with Mr. DeSantis over control of government services at Disney World in Florida, two union strikes that shut down Hollywood for six months, the collapse of Walt Disney Animation films at the box office and even rebukes voiced and written by Elon Musk.

Should Disney sell ABC? How does ESPN navigate a transition to full-bore streaming? Who will take over as chief executive when Mr. Iger retires again?

Some of those questions remain.

“Regardless of the outcome of today’s vote, Trian will be watching the company’s performance,” Mr. Peltz said at the meeting before the results of the vote were announced. “Trian still has continuing concerns about the current strategy,” he said. “All we want is for Disney to get back to making great content and delighting consumers — and for Disney to create sustainable long-term value for all of the shareholders.”

In other news from Disney’s shareholder meeting, the company said investors had also voted against giving Blackwells Capital, a smaller activist hedge fund, seats on the board; it had campaigned for three.

“The company would have benefited from any one of our candidates for the hard work needed over the next few years to advance this iconic company, but we respect the will of the shareholders and the outcome,” Blackwells said in a statement.

Lauren Hirsch contributed reporting from New York.

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