Nelson Peltz’s Proxy Battle With Disney; Who, What, & Why

Nelson Peltz's Proxy Battle with Disney; Who, What, & Why BobI-1440x811 Walt Disney Company - Bob Iger Walt Disney Company - Bob Iger

You’ve probably read countless headlines over the last two days about a guy called Peltz and something about a proxy. There is a bigger story here, which could be the beginning of significant changes at Disney. The whole thing can be confusing, so let’s start with some fundamental questions and work from there.

Who is Nelson Peltz?

Peltz is a New York native who went from building up his father’s family produce delivery business to becoming a billionaire. He is currently known as an activist investor and founder of the investment firm Trian Fund Management along with founding partners Ed Garden and Peter May. Peltz currently occupies high-end positions in Wendys, Sysco, and the Maddison Square Garden Company.

What is Trian Fund Management?

Trian Fund Management is an investment management company focused on “high quality but undervalued and underperforming public companies and working collaboratively with management teams and boards to help companies execute operational and strategic initiatives designed to drive long-term sustainable earnings growth for the benefit of all shareholders.” (Trian Website). I tried to put it into my own words, but the company’s own bio made the most sense. The Trian company is well-known for being the steady hand that pushes for change at big corporations like General Electric, Mondelez, and Procter & Gamble.

What is Peltz Trying to do with Disney?

The question is simple, but the answer is a little more complicated. In its simplest terms, Peltz and his company Trian Partners are trying to get a seat on the board at Disney. Peltz believes that if he can control a seat at the company and have input into future decisions, he can increase profitability and improve Disney’s standing. They are doing this through what’s being called a proxy fight. A proxy fight or battle is when a group of shareholders joins forces to outvote the rest of the board on a decision that is on the table. Proxy, meaning “the authority to represent someone else, especially in voting, allows other shareholders to lend their vote (in other words) to put more pressure on one side of the vote.

It usually involves lawyers and paperwork, but to me, it always sounds like a schoolyard election agreement – if you vote for Mary and not Fred, I will give you a cupcake. Except, there are no cupcakes, disappointingly. Investopedia explains it best: A proxy fight refers to the act of a group of shareholders joining forces and attempting to gather enough shareholder proxy votes to win a corporate vote.

Now that we have the backstory out of the way, it’s time to look better at the current position. Peltz has a bone to pick with the board at Disney, and while he openly supports Bob Iger, many of his points directly reflect moves made under his leadership, like the acquisition of Fox in 2019. Peltz’s company, Trian, says Disney “lost its way resulting in a rapid deterioration in its financial performance.” 

Nelson Peltz's Proxy Battle with Disney; Who, What, & Why IgerMurdoch-960x540 Walt Disney Company: Iger & Murdoch Walt Disney Company: Iger & Murdoch
Walt Disney Company Iger Murdoch

“Fox hurt this company. Fox took the dividend away. Fox turned what was once a pristine balance sheet into a mess,” Peltz said to CNBC’s “Squawk on the Street.” Despite Mark Parker being named Chairman of The Walt Disney Company, Peltz has continued his quest to gain his company a seat on the board, using everything from the company’s “9.4 million shares valued at approximately $900 million” through to its influence and reputation to make a case that a seat on the board would place Disney in a much better position. Trian Partners even prepared a 35-page document entitled “Restore the Magic,” which laid out the step-by-step argument; I have to admit, it is pretty impressive.

The presentation explained why Trian was invested in the “unrivaled” and “irreplaceable” brand, along with documentation to back up their claim that they would be well placed to “facilitate positive change” at Disney. Combining their expertise in collaborative management with a prospective seat on the board would allow them to have a hand in the upper management of the “company in crisis.” The document includes the names of many well-known companies that Trian has been directly involved with, such as P&G, Pepsico, Cadbury, Heinz, Comcast, IHG, and many more. It goes on to list the many desirable qualities of a management partner.

Furthermore, Trian had prepared a case study of their P&G investment, thoroughly profiling the company’s state before and after their involvement. Quotes were included from companies like Heinz, DuPont, and P&G from before the votes that brought Trian onto their respective boards, as well as the change of heart afterward once the improvement in the business structure had proved beneficial. One comparison statement from Heinz read:

“The company is at a key inflection point
and we cannot afford to let the board
and management be diverted from our
progress and plan by creating a
dysfunctional and destabilizing
– Heinz, June 2006

“I said to another CEO…who had called
me and inquired about Nelson, that if I
were to form the board today, Nelson
would be one of the first Directors I’d
ask to serve because he is an insightful,
communicative, enthusiastic, energetic
and available Director.”
– Bill Johnson, Heinz CEO, March

Graphs depicting Disney’s underperformance in shareholder return were confronting. They contributed to responses from media outlets questioning if this challenge Peltz has presented would finally require the Disney Board to take some accountability. On Thursday, CNBC’s Jim Cramer called out Disney execs for their reaction to the Trian movement, “It’s the board, the stewards, who haven’t done a good job. Not the shareholders, and not Peltz. Now someone like Peltz, who’s been tremendously successful, wants to join them, and they act like that’s a problem,” Cramer said.

Nelson Peltz's Proxy Battle with Disney; Who, What, & Why Walt Disney Company Board Members Walt Disney Company Board Members January 13th 2023. Walt Disney Company Board Members January 13th 2023.
Walt Disney Company Board Members January 13th 2023

Trian brings to our attention that many of the directors and members involved in some of Disney’s worst decision-making are still serving in prominent positions, and a change is essential to begin restoring the company. The financial figures supplied are convincing, visually drawing your eye to the losses that Disney has endured due to erratic movements and excessive overspending. One point I was unaware of in the presentation was Disney’s invitation to meet with Peltz in person only three years ago to hear his views on their situation, only to turn him away now when fresh eyes are needed more than ever. Trian also brings attention to the broken system of succession at Disney, a topic we discussed earlier in the week. Descriptions, timelines, and graphs lay out the unsuccessful hand-over of power, stemming back to Bob Iger’s contract extension in 2011. Shortly after, the report aims at the CEO’s compensation over the last four years, a subject that has been bouncing around the fan forums for years now.

Streaming services were up next with a thorough review of the strategies being used, where they have taken the company, and the accompanying figures. Together they reinforced the point that with losses this substantial, something needs to change. The punch line towards the end, “We Believe Disney Lacks Cost Discipline as an Organization,” is sad but true, evident in their recent earnings disaster report. Another hard truth mentioned in the lengthy report was that Disney Parks are believed to be over-earning in an effort to subsidize their accumulating streaming service loss, a sentiment that I shared in that same article earlier this week.

Nelson Peltz's Proxy Battle with Disney; Who, What, & Why Walt Disney leadership  Walt Disney Leadership
Walt Disney Leadership

The proposal was very impressive and thorough, presenting a clear and sound case for new blood to be appointed to the board, allowing a new perspective for crucial business decisions ahead. Is Nelson Peltz the answer Disney has been waiting for? He very well might be. Thanks to a successful track record and an undisputable talent for rebuilding businesses for the common good, Peltz and his Trian Management Partners might be the very key to stopping this revolving door of mistakes Disney has made a habit of. It also might hold some of the current members accountable for their position in these detrimental decisions rather than simply sweeping them under the rug along with scapegoat Bob Chapek, henceforth affectionately named Scapek. Okay, maybe that one needs some more work.

Tell me what you think. Is Nelson Peltz a voice of reason who deserves a seat at the Disney table? One sticking point for the activist investor might be the rule for Disney Board Members not being elected over the age of 75 short of determining ‘special circumstances.’ Will Disney use this as a convenient excuse they need to get out of this sticky situation?

Zoë Wood is a travel writer from Sydney, Australia. Since her first visit to Disneyland at the age of 6, she has spent her years frequently visiting Disney Parks and traveling around the world.

Join Zoë as she lets you in on all the tips, tricks, anecdotes, and embarrassments that arise from her family adventures.


Our agents will assist you in booking the perfect Disney getaway, all at no extra cost to you. Get the most out of your dream vacation by letting us assist you with dining and park reservations, provide expert advice, answer any questions, and continuously search for discounts to ensure you get the best deal possible.