Just days after The Walt Disney Company Board of Directors shared their list of nominations for election, Nelson Peltz and the Trian Group have released their own proxy statement which highlights what they feel is wrong with the Walt Disney Company and echoed the thoughts on CNBC earlier.
What’s Happening:
- Earlier today, Nelson Peltz and the Trian Group released a proxy statement (a day after the Walt Disney Company did) that focuses on the alleged missteps at the Walt Disney Company in an ongoing effort to get Nelson Peltz and former Disney CFO Jay Rasulo seats on the board of directors.
- In the proxy statement, the group shares that “Disney was founded and built by owners. The Trian Group believes that “restoring the magic” at Disney starts with a focused, aligned and accountable Board, intensely committed to returning an “ownership mentality” to the boardroom. We believe that, and a heavy dose of best-in-class corporate governance, is the medicine Disney needs to fix its ailing shareholder returns.
- They also shared a list of issues they found with the Walt Disney Company, and their own goals:
- Corporate Governance
- Disney’s Path (Per Trian): Preserve as much of the status quo as possible by playing defense – evidenced by limited changes to compensation and succession processes
- Trian’s Goal: Adopt best-in-class governance; finally complete a successful CEO succession; and align management pay with performance
- Streaming Profitability
- Disney’s Path (Per Trian): “Focused on achieving significant and sustained profitability” – no guidance or tangible targets beyond breakeven
- Trian’s Goal: Target and achieve Netflix-like margins of 15-20% by FY 2027
- Future of ESPN
- Disney’s Path (Per Trian): “Building ESPN into the preeminent digital sports platform” – lacking a tangible business plan or defined cost to shareholders
- Trian’s Goal: Commit to a reasonable, defined payback period and return profile on ESPN Flagship DTC and communicate it in detail prior to launch
- Studio Creativity
- Disney’s Path (Per Trian): “Improving the output and economics of our film studios”
- Trian’s Goal: Board-led review of creative processes and structure to restore leadership accountability and reclaim #1 box office position w/ leading economics
- Parks and Experiences Growth
- Disney’s Path (Per Trian): “Strategically investing in our Experiences business to turbocharge growth”
- Trian’s Goal: Execute on a clear vision for Parks targeting at least high-single digit operating income growth to ensure adequate returns on ~$60bn of capex
- Corporate Governance
- Peltz also appeared on CNBC where he shared more about what he thinks is wrong with the Walt Disney Company and how he, Jay Rasulo, and the Trian Group can fix it.
- A day ago, The Walt Disney Company Board of Directors disclosed its recommended slate of 12 nominees for election at the 2024 Annual Meeting of Shareholders in preliminary proxy materials filed today with the Securities and Exchange Commission, and did not endorse any of the nominations from the Trian Group.
- This is only the latest in the ongoing saga between Disney and the Trian Group, you can see the full timeline of events here.
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