Disney boss prevails against two hedge funds

Et was a dispute that was carried out like a political campaign. On the one hand, the entertainment giant Walt Disney and his long-time CEO Bob Iger, on the other hand, Nelson Peltz, one of the most aggressive American investors who has already put many companies through the wringer. Peltz wanted to win two seats on Disney’s board of directors. The company wanted to prevent this with all its might. Both opponents have mobilized enormous resources to convince shareholders. Advertisements were produced attacking the opposing side, reminiscent of election campaigns. Peltz and his hedge fund spent $25 million, Disney even spent $40 million.

At the shareholders’ meeting on Wednesday there was a “showdown”, and Disney emerged as the clear winner from a vote by the shareholders. All twelve current members of the board of directors, including Iger himself, were re-elected with a “substantial majority,” according to a statement. According to the company, Iger received 94 percent of the vote, Peltz only managed 31 percent. Iger can now continue his course with a board of directors whose members are well disposed towards him and the majority of whom were appointed during his time as CEO. However, this does not emerge from the fight unscathed because Peltz’s campaign has shed light on weak points in the company.

The confrontation was a high-profile spectacle. And for Iger, she was a significant threat that could have made his second term at the Disney helm a lot more unpleasant. Iger initially led the traditional entertainment group between 2005 and 2020. After an interlude with the hapless Bob Chapek, he surprisingly returned to the position in autumn 2022. Shortly afterwards, Peltz started his first shareholder campaign, but he gave it up again after Iger announced a number of steps to make him more conciliatory, such as cost reductions and the resumption of dividend payments. A few months later he tried again, and this time the tone became much more hostile. Peltz was dissatisfied with the development of the share price, which was temporarily at its lowest level since 2014 last year.

Disney has struggled with a number of challenges recently. The television business, which has long been highly lucrative, is on the decline, especially because more and more people are foregoing cable connections in the streaming age. With its own streaming activities, the group has become Netflix’s most important competitor via its Disney+ platform, but these have so far been loss-making and have generated losses of more than $10 billion in recent years. Disney’s film division is also currently unusually weak. Recently, Disney productions have delivered a number of disappointing box office results. This also applied to cartoons and superhero films, which until recently were still reliable sources of revenue.