Disney’s purported victory in proxy fight against pro-Trump investor criticized as underhanded tactics

Reports have claimed that the attempt by Disney to fend off a proxy move by conservative investor Nelson Peltz, a Trump supporter, may be successful, although critics have responded that the leak of such news may have been an effort by Disney to tip undecided institutions and shareholders to vote for the incumbent board.

Reuters reported on Tuesday night that, according to ”sources,” Disney’s board of directors were “safely ahead” of Trian Fund Management’s two challengers, Nelson Peltz and former Disney CFO Jay Rasulo, and that “Blackwells Capital, another hedge fund that nominated three board director candidates at Disney, was also unsuccessful in its attempt.” Peltz had nominated himself and Rasulo to join Disney’s board of directors.

“Trian may still be able to claim a financial win at Disney, given that the company’s shares have gained nearly 50% since early October when Peltz said he was planning a fresh push for seats,” Reuters added.

In late March, Peltz — who first mounted a proxy fight with Disney in 2023, only to call it off when Disney CEO Bob Iger cut costs — spoke about Disney to the Financial Times, intimating that the company was too woke.

“They say we know nothing about the movie business — we don’t claim we do — but I don’t think they do, with five big losers in a row,” Pelz said, referencing recent Disney box office flops. “They’ve lost first place in animation, they’ve lost first place in features . . . Maybe it’s time to change management in those divisions. … People go to watch a movie to be entertained. They don’t go to get a message. … Why do I have to have a Marvel that’s all women? Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-black cast?”

The leak about the Disney vote has been met with some heavy criticism and skepticism, including from billionaire investor Bill Ackman, who slammed the reports on X:

There have been a few recent articles in the press about @Disney “winning” its proxy contest with Nelson Peltz based on early election returns that have been leaked to the media. We don’t have an investment in Disney, but I thought it useful to point out the inappropriateness of these leaks to the press. Only the company and its advisors have access to how shareholders have voted before the day of the annual meeting. My understanding is that it is illegal to release the outcome of the vote prior to it being finalized as it has the effect of manipulating the outcome.

Here, the company and/or its advisors have leaked that Disney is winning the contest. It is really inappropriate that they have done so. And how does one know that it is Disney and/or its advisors that are the source of the leak?  If Peltz were “winning,” there would be no leaks to the press.  The reason why the progress of an election for directors must be kept confidential until the results are final is that leaking the results can affect the ultimate outcome.

Ackman continued:

This is clearly a close election. Institutions don’t want to risk voting against the incumbent board if it is clear that the activist will lose. They want to be on the winning side of the election. Here, the company and/or its advisors have leaked the early results in order to tip more institutions and other shareholders to vote for the incumbent board, unfairly tipping the scale in the incumbent board’s favor. In other words, an institution may think: if Peltz is going to lose, it is not worth taking the risk of offending management by voting for him. …

I think highly of Nelson Peltz. I am sure he would be greatly additive as a member of the Disney board.  Ask yourself, why is the company fighting so hard to keep him off? The fact that the company leaked the early returns to the media is further evidence that an activist of Nelson’s caliber deserves to be on this board for all shareholders benefit. Based on my knowledge of Nelson’s capabilities and the dirty tricks implemented by the company and its advisors, I strongly recommend that shareholders vote for Nelson Peltz for the Disney board.  Institutions who have already voted still have time to change their vote.  It is time that we make an example of Disney here so that this bad practice does not continue to poison shareholder democracy.

There have been a few recent articles in the press about @Disney ‘winning’ its proxy contest with Nelson Peltz based on early election returns that have been leaked to the media. We don’t have an investment in Disney, but I thought it useful to point out the inappropriateness of…

— Bill Ackman (@BillAckman) April 2, 2024

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