In Disney Proxy Battle, A Second Advisory Firm Backs Activist Investor Nelson Peltz

Proxy advisor Egan-Jones on Wednesday became the second independent firm to support activist Nelson Peltz’s effort to secure seats on the Disney board.

The endorsement follows that of ISS earlier this month, which was a notable win for Peltz’s Trian Fund Management as it is the biggest advisory firm and highly influential. While ISS backed Peltz alone, Egan-Jones is supports both the billionaire activist investor and former Disney executive Jay Rasulo, Trian’s other nominee to the Disney board. The firm is recommending shareholders withhold support for Maria Elena Lagomasino and Michael B.G. Froman, who are members of Disney’s slate of nominees.

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Disney shareholders’ votes will be tallied at company’s annual meeting next Wednesday.

“We see very little downside and a lot of upsides in putting the Trian nominees on the board,” Egan-Jones said in an announcement. The firm cited an “apparent lack” of a long-term succession plan and a board that “appears cut off and unwilling to engage with investors and the broader market.”

Egan-Jones said the company’s business model is “built for the last decade, but not forward looking and flexible enough to ensure success in the next.” The current board, it added, is characterized by “a desire to protect the status quo for as long as possible and at all costs.”

Trian began agitating last year after Disney shares sank to a multi-year low, though they have since rebounded. Along with succession, Trian has criticized Disney’s film strategy. The opposition movement is the most significant faced by Disney since 2004, when Michael Eisner was stripped of his chairman title. That action soon led to his exit from the company and ushered in the start of Iger’s initial 14-year run as CEO. After turmoil at the company under his hand-picked successor, Bob Chapek, Iger returned as CEO in November 2022.

Disney has repeatedly hit back at Peltz, saying he lacks media business experience. The 81-year-old investor has had a track record of leading a number of successful proxy battles, including a recent one at consumer products giant Procter & Gamble.

Proxy advisory firm Glass Lewis, another leading firm, weeks ago threw its weight behind Disney’s board nominees. Iger and Disney have also received public backing from George Lucas, Laurene Powell Jobs and several members of the Disney family.

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