Walt Disney said Tuesday it “does not endorse” the candidates nominated by activist shareholders in a preliminary proxy filed with the Securities and Exchange Commission.
Disney Chief Executive Bob Iger, in a letter to investors, said the company has embarked on an “unprecedented transformation,” making management changes and streamlining operations to become more cost-efficient.
It is on track to achieve roughly $7.5 billion in cost reductions – about $2 billion more than it originally targeted.
Iger said Disney has prioritized making its streaming business profitable, turning ESPN, its sports media brand, into the “preeminent” digital platform, improving the output and economics of its film studios, while “turbocharging” the growth at its theme parks.
“We have already made considerable progress on all four of these opportunities, and we are continuing to move forward with urgency and clarity,” Iger wrote, urging shareholders to support Disney’s 12 nominees – and rejecting those candidates put forward by investor groups Trian and Blackwells.
Activist investor Trian Fund Management said in December they nominated two independent director candidates for Disney’s board – its chief executive, Nelson Peltz, and former Disney Chief Financial Officer Jay Rasulo.
Blackwells Capital put forth a trio of nominees as alternatives to investors who want a fresh perspective on Disney’s board.
Earlier this month, Disney’s board voted to reject Trian’s nominees and Blackwells’ nominees. The directors said Nelson Peltz “had not actually presented a single strategic idea for Disney,” and that his experience was not in the media or technology sector.
Peltz’s relationship with Ike Perlmutter, the former chairman of Marvel Entertainment who has a complex history with Disney, “created significant concern” for the directors.
Perlmutter was forced out of the company last March as part of the company’s cost-cutting campaign.
Disney’s board did not endorse former Disney Chief Financial Officer Rasulo because he lacked executive experience at other public companies.
The company also said his tenure as a director at iHeartMedia did not lead to strong returns and that his relationship with Perlmutter also raised concerns.