Disney Board Urges Shareholders to Ignore Activist Investor Nelson Peltz’s Proposals

Disney’s board of directors is firing back against activist investor Nelson Peltz’s proposals to shareholders, issuing a statement to urge investors to reject the Trian Group candidate in the ongoing proxy battle he’s waging against the company and instead vote for their nominated candidate, Michael Froman.

Disney’s board said in a statement Thursday the company expects to mail its proxy materials, including its white proxy card to shareholders in the “near future,” and is urging shareholders “to take no action at the moment and to simply discard any materials or blue proxy card they may receive from Trian Group.”

Per Disney’s board, “Shareholders should instead give themselves the benefit of voting on a fully informed basis, taking the Board and management team’s important update on its strategy to create value into consideration.”

“The Disney Board of Directors does not endorse Nelson Peltz (or his son Matthew, who is running as an alternate Mr. Peltz may swap in) as a nominee, and believes the election of either Mr. Peltz or his son would threaten the strategic management of Disney during a period of important change in the media landscape,” the Disney board wrote in its release sent Thursday after Peltz laid out his argument against Froman in his open letter.

It continues: “Inexplicably, Trian seeks to replace Michael Froman, a highly valued member of the Board with deep background in global trade and international business, who the Board believes is far better qualified than either Mr. Peltz or his son to help drive value for shareholders. Neither Mr. Peltz nor his son offer skills or experience additive to the Disney Board that replace the decades-long experience of Mr. Froman.”

Earlier Thursday, Peltz’s Trian wrote in its own letter to investors: “As a large Disney shareholder – with ~$1 billionvi of Disney shares – Trian is committed to helping to restore the magic at Disney. We cannot sit idly by. And we hope you will not either. If shareholders like us and you remain passive, without demanding more accountability and an ownership mentality in the boardroom, why shouldn’t we expect the stock to do anything other than fall back to another eight-year low?”

A representative for Trian Group did not respond to request for comment on Disney’s latest communication with shareholders.

See the full text of the letter Disney sent to shareholders Thursday, in response to Peltz’s latest proxy materials.

Dear Fellow Shareholder,

We want to thank you for your investment in, and commitment to, The Walt Disney Company.

Your Board is committed to delivering sustainable, superior shareholder value. Over the last several years, we have focused on ensuring that the Board has the right combination of experience, skills and perspectives to guide Disney through a period of unprecedented change in the media business. We recently added a new Director, Carolyn Everson, a well-respected leader with deep experience in roles at complex global companies and a strong background in building world-class media and digital advertising businesses.

This past year has been a dynamic period for Disney. We recently announced that Mark Parker will become Chairman of the Board following our 2023 Annual Meeting of Shareholders. Mark’s four decades of experience at NIKE, including his service as chief executive officer, his deep understanding of creatively driven, consumer-facing businesses with world-class brands and his experience using technology to develop successful direct-to-consumer models, make him ideally suited to take on this role. He will also chair our newly formed Succession Planning Committee, whose mandate is to assist the Board in identifying and onboarding a successor to our recently returned chief executive officer, Bob Iger.

An activist investor, Trian Fund Management, L.P., along with other entities affiliated with Nelson Peltz, has nominated Mr. Peltz (or if he is unable to serve or for good cause will not serve, then his son Matthew) for election as a director at the upcoming Annual Meeting in opposition to the nominees recommended by your Board.

Your Board does not endorse Mr. Peltz (or his son) as a nominee and believes that his election would threaten our efforts to manage Disney for all shareholders. Over more than six months of engagement with Mr. Peltz, in both conversations and written materials, he has demonstrated that he does not understand Disney’s businesses and he lacks the perspective and experience to contribute to the objective of delivering shareholder value in a rapidly shifting media ecosystem.

If you have already received materials with a blue proxy card from the Trian Group, please simply discard them and do not vote at this time.

Your company’s proxy materials will be mailed soon, including the WHITE card with voting instructions. Your vote FOR our nominees on the WHITE card will be especially important at this year’s upcoming Annual Meeting.

Your Board and management team have engaged extensively with Mr. Peltz in 2022 and 2023, even before he bought any Disney stock. In fact, Mr. Peltz sought a board seat before he was a shareholder. We are skeptical of his motives and believe he would be disruptive at a crucial period for Disney.

Your independent and highly qualified Board has provided strong oversight focused on delivering sustained shareholder value. Ten of the 11 board members are independent, five have Fortune 500 CFO or CEO experience and we have strong diversity on our Board. The Board is overseeing important strategic changes that our CEO Bob Iger is executing, such as putting more decision-making into the creative teams, implementing a cost reduction plan, prioritizing streaming profitability and improving the guest experience in our parks.

Under Bob Iger’s previous tenure as CEO, the company delivered significant long-term shareholder value. From 09/30/2005 to 02/25/2020, Disney generated total shareholder return of 554%, compared to 244% for the S&P 500, as well as exceeded returns from media peers. We are pleased to have Bob back at the helm during this current period of change in our industry.

We look forward to providing you with more information regarding the Board and management team’s strategy to deliver shareholder value in today’s rapidly shifting media ecosystem and the reasons why the election of Mr. Peltz will not benefit that plan.

In the interim, we strongly urge you to simply discard and NOT to vote using any blue proxy card sent to you by the Trian Group. Please wait to vote until you can do so on a fully informed basis.

We thank you for your investment in The Walt Disney Company.

Board of Directors

The Walt Disney Company

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