© Reuters. Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California October 25, 2016. REUTERS/Mike Blake/File Photo
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By Dawn Chmielewski and Svea Herbst-Bayliss
(Reuters) -Walt Disney is bracing for a bitter proxy battle as activist investor Nelson Peltz nominated himself and an ally to Disney’s board, his second attempt this year to gain sway over the company’s strategy.
The looming battle comes at a pivotal time for Disney, as the company is trying to reinvigorate its creative franchises, make its streaming business profitable and find partners to help build ESPN’s digital future.
Trian Fund Management, which owns roughly $3 billion worth of Disney shares, abandoned a bid for one board seat in February when the media conglomerate outlined a sweeping restructuring plan that addressed his criticisms.
Trian nominated Peltz and former Disney Chief Financial Officer James “Jay” Rasulo on Thursday.
“As Disney’s largest active shareholder, we can no longer sit idly by as the incumbent directors and their hand-picked replacements stand in the way of necessary change,” Trian said in a statement, laying out the case for its two independent director candidates.
After having signaling that he might nominate as many as four directors, Peltz cut the number to two. The decision came after Disney revamped its bylaws and after the company announced it was adding two new directors.
“Disney is one of the most iconic companies in the world, with unrivaled scale, unparalleled customer loyalty, irreplaceable intellectual property, and enviable commercial flywheel,
However, Disney has woefully underperformed its peers and its potential.” Trian said in a statement issued Thursday.
Disney’s stock price rose 1.1% to $93.94 on Thursday. Shares are up 8% in 2023; the broad-market has gained more than 20% in that time.
“I’m less worried about the distraction (of a proxy war) and more worried about how complicated this all is,” said LightShed Partners media analyst Rich Greenfield. “There are so many issues, all at once, all while doing the largest cost-cutting in the company’s history.”
Rasulo joined Disney in 1986 and worked in a variety of positions before being named chair of Walt Disney (NYSE:) Parks and Resorts in 2002, where he oversaw a major expansion of the California Adventure theme park at the Disneyland Resort.
One former Disney executive who worked with Rasulo described him as a financially savvy operator who could nonetheless be hard-nosed and sarcastic, whose leadership style was a contrast to the affable, polished Iger.
To other investors, Peltz and Rasulo position themselves as the people the company needs now to cut costs, lay out a sensible succession plan and revamp the company’s streaming operations.
Rasulo became Disney’s CFO in 2010, swapping jobs with then-CFO Tom Staggs. The exercise was viewed at the time as broadening each executive’s management experience as they vied for the No.2 job at Disney,
