"Mickey Mouse encounters barbarians at the door," Disney's agency rights dispute enters a critical moment

Disney is embroiled in a fierce proxy battle, with "barbarian" Nelson Peltz gaining support from many investors, knocking on the door of Disney's board of directors, while current CEO Bob Iger actively defends his position.

According to media reports, on Wednesday evening local time, Disney will hold its annual shareholders meeting, where voting will take place between Peltz and former Disney CFO Jay Rasulo competing for two seats, with investors voting between the two as well as the existing board candidates.

Disney's stock price has risen by about one-third this year, bringing renewed momentum to Disney. The stock has been declining since reaching a peak of $197.16 in March 2021 at the peak of the streaming media bubble.

Guggenheim Securities analyst Michael Morris pointed out:

Disney's popularity has clearly improved, as can be seen from the stock price. Regardless, I believe Disney's stock price has not crossed the "finish line", and people are more optimistic that they will be able to achieve their goals.

"Barbarian" at the Gate

Renowned American activist investor, Trian Fund Management founder and CEO Nelson Peltz has directly criticized Disney's management, believing the company has made misjudgments in key decisions such as its streaming media strategy and the Fox acquisition.

His Trian company has gained support from two shareholders, with one influential institutional shareholder services company stating that having Peltz on Disney's board will "ensure appropriate board engagement to other investors." The California Public Employees' Retirement System (Calpers) also noted that it voted in support of Peltz's nomination, believing Disney would benefit from the "fresh perspective" on its board.

It is worth mentioning that Peltz is a veteran of proxy battles at Procter & Gamble and Heinz, and he also failed in last year's proxy battle at Disney. He believes that under Iger's leadership, the media and theme park conglomerate waited too long to develop a streaming media strategy, and the $71 billion acquisition of Fox was overpriced, leading to stagnation in its film studio's creativity.

Peltz stated that the group needs to achieve "Netflix-like" profit margins in its streaming media business, which has incurred losses of billions of dollars since its launch. Peltz also criticized Disney for extending Iger's tenure multiple times and failing to groom a suitable successor.

CEO Actively Defending His Position

Iger has taken action to win more shareholder support, using his position as one of the world's most prominent and well-connected CEOs to strengthen his defense.

He announced a series of shareholder-friendly measures, including raising Disney's free cash flow target, announcing a $1.5 billion investment in Epic Games, committing to significant cost reductions, and announcing a 50% dividend increase and $3 billion in stock buybacks Iger has received public support from heavyweight shareholders including Jamie Dimon, CEO of Morgan Stanley, and George Lucas, the founder of Star Wars from the Disney family.

Major investors have also shown their support for Iger. Norway's sovereign wealth fund, operated by the Norwegian Bank Investment Management, is one of Disney's top ten shareholders and is backing the board. According to disclosures on the fund's website, the fund will cease its support for Peltz and former Disney CFO Jay Rasulo.

One of the top 20 shareholders, T Rowe Price, stated on Monday that it also supports the Iger camp, with a statement saying, "We are pleased that management has a viable plan to address the significant issues facing the company."

As the aftermath of the proxy battle continues, analysts point out that while the outcome of this shareholder meeting remains uncertain, winning the vote for Iger and the board is only a short-term appeasement of shareholders. Improving performance and resolving succession issues are still the core challenges to be faced in the future.