Disney, facing pressure from activist investors, adds two board members
The Walt Disney Company, bracing for a second proxy battle with activist investor Nelson Peltz, strengthened its board on Wednesday.
James P. Gorman, CEO of Morgan Stanley, and Jeremy Darroch, who previously led Sky, a British television company, will join Disney’s board of directors early next year, according to a securities filing. “Their appointments reflect Disney’s commitment to a strong board focused on the company’s long-term performance, strategic growth initiatives, the succession planning process and enhancing shareholder value,” Disney said in a statement.
Chairman of the Board Mark G. Parker, executive chairman of Nike, said in a statement that Mr. Gorman “was an integral part of Morgan Stanley’s well-managed succession process over the past year.”
Francis A. deSouza, a technology executive who has served on Disney’s board since 2018, will not seek re-election at Disney’s annual meeting in the spring, leaving the company with 12 directors.
While a search began in April, board reinforcements were announced as multiple activist investors surrounded the company, according to Disney filings. Most notable include Mr. Peltz, who has fought for multiple seats on Disney’s board and is aligned with Ike Perlmutter, a dissatisfied ex-employee who is one of Disney’s largest independent shareholders. Mr. Perlmutter, who sold Marvel Entertainment to Disney in 2009, was ousted from the company in March.
Representatives for Mr. Peltz and Mr. Perlmutter did not respond to questions.
“It’s clear we’re dealing with them in some way,” Disney CEO Robert A. Iger said earlier Wednesday at the DealBook Summit about activist investors. “I’m sure the board will listen to them about what their plans are and what their ideas are.”
Mr. Iger added: “I have a lot to do. I don’t let all that distract me.”
Last year, Mr. Perlmutter, from his position at Disney, agitated for Mr. Peltz to join the board. When he was rejected, Mr. Peltz launched a proxy battle to put himself on the board, saying he would cut costs, revamp Disney’s streaming business and clean up the company’s messy succession planning. Mr. Peltz withdrew in February as Disney instituted a restructuring plan and cut $5.5 billion in costs. The cost savings ultimately came in closer to $7.5 billion.
The pair resurfaced last month. She have planned a new battle for board seats – the nomination window opens on Tuesday and runs until January 4 – and have cited Disney’s languishing share price as the reason. Disney shares closed Wednesday at $92.50, up about 13 percent from the start of last month but down about 48 percent from the March 2021 high.
Mr. Peltz has also accused Disney of mishandling the succession. After having his contract extended several times, Mr. Iger turned the company over to Bob Chapek in 2020. Two chaotic years later, Disney fired Mr. Chapek and reappointed Mr. Iger as CEO. His current contract expires at the end of 2026 and he has said he will then leave the company for good.
Disney has said “robust” succession planning is underway, with a search extending beyond the company.
Another activist investor, ValueAct Capital, has done the same a great deal of effort in Disney and considers the stock to be undervalued. ValueAct, a San Francisco fund that has taken stakes in companies including Microsoft, Spotify and The New York Times, is known for its goals and is not expected to fight for a board seat.
Lauren Hirsch contributed reporting from New York.