The Trian Group,1 which beneficially owns over $3.5 billion of
common stock in The Walt Disney Company (NYSE: DIS), today
reaffirmed its call for change in the composition of the Board of
Directors of Disney and the commitment of its nominees, Nelson
Peltz and Jay Rasulo, to work constructively with the Company’s
Board and leadership team to drive long-term, sustainable value
creation.
Trian believes that Disney is the most advantaged consumer
entertainment company in the world. Over the last one, three, five
and ten years, however, Disney has woefully underperformed its
potential and its peers,2 costing shareholders more than $200
billion in value.3
Accordingly, Trian believes that change is needed. Ahead of the
Disney annual meeting of shareholders on April 3, 2024, Trian
encourages all shareholders to vote FOR its two
candidates, Mr. Peltz and Mr. Rasulo, and to
withhold support from two incumbent directors, Maria Elena
Lagomasino and Michael B.G. Froman.
This Campaign is About the Board
Trian believes Disney’s problems lay at the feet of the Board,
which lacks focus, alignment and accountability. Although the Board
members are accomplished professionals, they are extraordinarily
busy, have invested almost none of their own money in Disney stock
and have failed to heed investor input. The result has been
questionable strategic and capital allocation decisions, including
the investment of $200 billion of capital without
any discernible return, the demonstrable lack of alignment
between executive compensation4 and shareholder value creation and
financial results in the most recent year that pale in comparison
to the results five years ago.5
Most recently, the Board botched its most important job – CEO
succession – by installing Bob Chapek in that role seemingly
without appropriate vetting or oversight.6 The Board then renewed
Mr. Chapek’s contract just months before firing him for poor
performance. Ultimately, the Board had to call Bob Iger out of
retirement to fill the void.
In this election contest, Disney has emphasized that Mr. Iger is
admired and respected (including, for example, by service
providers7 and advisors8), which we do not doubt. Trian supports
Mr. Iger as a candidate for the Board and as CEO. That Disney
spends so much time and ink defending Mr. Iger – while saying
almost nothing about the two director candidates whose reelection
Trian is challenging – is both troubling and telling. This campaign
is not about Mr. Iger, nor is it a referendum on his leadership.
And in all events, Disney is, and must be, more than just one
person, especially one whose contract expires in less than two
short years.
This election is a board election and the question before
shareholders is: who should serve on the Board, helping the company
on behalf of shareholders?
We have nominated two candidates, Mr. Peltz and Mr. Rasulo, who
have a shareholder mindset, extensive, relevant experience and a
willingness to ask tough questions and set demanding goals. Mr.
Peltz has served on eleven public company boards, including at some
of the most respected companies in the world. Mr. Rasulo is the
former Chief Financial Officer of Disney and knows the business
well. Disney’s board seemingly does not want their help – claiming
they will be “disruptive” – and prefers instead its hand-selected
incumbents, an expert in foreign affairs and an advisor to wealthy
families.
Choosing between these slates, and voting for change versus more
of the same, is really what this election is about.
Our Nominees Will Work Constructively with the Board
Our nominees’ goal is to delight Disney’s customers and to
enhance value for all shareholders. To that end, Mr. Peltz and Mr.
Rasulo look forward to working collaboratively with the executive
team and Board – as they have done many times before at other
companies – when they are elected.
Mr. Rasulo worked in that manner at Disney previously. Mr.
Rasulo and Mr. Iger worked side-by-side every day for more than
five years as CFO and CEO, collaborating for the good of Disney
shareholders. If elected, Mr. Rasulo would bring his extensive
knowledge of Disney and its culture, people, operations and
customers to the boardroom, and be an independent source of
knowledge about the industry and the company.
In 2019, Mr. Peltz was asked by Mr. Iger to address the Disney
Board about shareholder sentiment in the media industry. Mr. Peltz
was happy to do so, and the discussion was seemingly productive and
interactive.
More generally, Mr. Peltz has a reputation as a productive and
insightful corporate director. His colleagues on corporate boards,
across industries, have regularly renominated him as a director,
and he has been elected by shareholders more than 50 times to serve
as their representative – almost always garnering more than 90% of
the vote.9 He did not amass that record by being disruptive or
unproductive.
Disney knows from its own experience that Mr. Peltz is a willing
and helpful collaborator. But if there were any doubt, last week,
thirteen of Mr. Peltz’s current and former colleagues wrote an open
letter to Disney’s Board in which they said of Mr. Peltz that
he:
“entered the boardroom every meeting
with an open mind, a focus on growth for the benefit of
stakeholders and a commitment to working constructively towards our
common goal of creating long-term shareholder value.”10
Our Nominees Can Help Disney
We believe that reelecting the existing Board will have the
predictable effect of leading to more of the same: questionable
strategic and capital allocation decisions, poor executive
compensation alignment and suboptimal succession planning.
Trian is convinced that Mr. Peltz and Mr. Rasulo can assist
Disney with its challenges and help ensure a brighter future. We
are not alone in thinking that.
In their open letter to the Disney Board, Mr. Peltz’s current
and former colleagues wrote that:
“the companies for which we served as
board members alongside Nelson were improved because of his
presence on the board.”11
Jim Cramer on CNBC confirmed this sentiment among the executives
with whom Mr. Peltz has worked:
“I interviewed the CEOs of Procter
& Gamble, the CEO of Mondelēz and the CEO of Heinz, and Nelson
Peltz was on [the] board of all those and all those CEOs said that
he did an amazing job asking questions and stopping them from doing
stupid things.”12
This sentiment was affirmed, independently, by James Stewart of
The New York Times, who interviewed “dozens of former executives at
companies targeted by Mr. Peltz”13 and found that “all said he had
bolstered results…”14
Commentators familiar with Jay Rasulo’s track record have
similarly touted his valuable experience. Robbie Whelan of The Wall
Street Journal noted that Mr. Rasulo grew “intimately familiar with
Disney over the course of his nearly 30-year tenure,”15 and Bob
Iger himself has referred to Mr. Rasulo as a “valued colleague and
friend, as well as a vital contributor to Disney’s success”16 and
commended him for his “strategic acumen and savvy insight.”17
Shareholders Should Vote FOR Nelson Peltz and
Jay Rasulo
We are pleased that our campaign has garnered support from
accomplished independent commentators and research firms, including
Institutional Shareholder Services (ISS), the largest and most
influential proxy advisory firm, which wrote that:
“[Nelson] Peltz, as a significant
shareholder, could be additive to [Disney’s] succession process,
providing assurance to other investors that the board is properly
engaged this time around. He could also help evaluate future
capital allocation decisions.”18
Like ISS, we believe that Disney’s Board needs a “catalyst”19 to
improve its effectiveness – directors who will bring new
perspectives, ask tough questions and encourage open-minded
debate.
Ultimately, the question for shareholders as they cast their
vote is: given the company’s record of underperformance, which
directors can best ensure a brighter future for Disney and its
shareholders? Who can best exercise independent judgment on behalf
of shareholders to ensure Disney is on the right strategic path,
executing well and with a compensation plan that aligns
management’s incentives with the creation of shareholder value?
We do not believe that the current Board, which has presided
over deteriorating performance and a failed succession, can address
Disney’s challenges. To improve the focus, alignment and
accountability of the Board, we believe Disney needs new,
independent directors.
Our nominees, Nelson Peltz and Jay Rasulo, are dedicated to
ensuring a better future for this iconic company. Help us elect Mr.
Peltz and Mr. Rasulo, and together, we can Restore the
Magic at Disney.
To ensure the election of Nelson Peltz and Jay Rasulo, it is
essential that shareholders vote “FOR” Nelson
Peltz and Jay Rasulo, and
“WITHHOLD” on Michael B.G. Froman, Maria
Elena Lagomasino, and all three Blackwells Nominees. As
Disney’s annual meeting is less than two weeks away, it is
important that shareholders vote TODAY. Every vote is important.
Shareholders must submit their vote no later than April 2, 2024, at
11:59pm ET. Only your last vote counts.
For more information, including voting instructions, visit our
website: www.RestoreTheMagic.com.
About Trian Fund Management, L.P.
Founded in 2005, Trian Fund Management, L.P. (“Trian”) is a
multi-billion dollar investment management firm. Trian is a highly
engaged shareowner that combines concentrated public equity
ownership with operational expertise. Leveraging the 40+ years’
operating experience of our Founding Partners, Nelson Peltz and
Peter May, Trian seeks to invest in high quality but undervalued
and underperforming public companies and to work 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
stakeholders.
Media Contacts:
Anne A. Tarbell(212) 451-3030atarbell@trianpartners.com
Paul Caminiti / Pamela Greene / Jacqueline ZuhseReevemark(212)
433-4600Trian@reevemark.com
Investor Contacts:
Matthew Peltz(212) 451-3060mpeltz@trianpartners.com
Ryan Bunch(212) 451-3176rbunch@trianpartners.com
Bruce Goldfarb / Pat McHughOkapi Partners LLC(212) 297-0720(877)
629-6357info@okapipartners.com
Edward McCarthy / Richard Grubaugh / Thomas GerminarioD.F. King
& Co., Inc.(212) 229-2634Disney@dfking.com
Disclaimer
Except as otherwise set forth in this press release, the views
expressed in this press release reflect the opinions of Trian Fund
Management, L.P. and its affiliates (“Trian”), and are based on
publicly available information with respect to The Walt Disney
Company (“Disney” or the “Company”). Trian recognizes that there
may be confidential information in the possession of the Company
that could lead it or others to disagree with Trian’s conclusions.
Trian reserves the right to change any of its opinions expressed
herein at any time as it deems appropriate and disclaims any
obligation to notify the market or any other party of any such
change, except as required by law. Trian disclaims any obligation
to update the information or opinions contained in this press
release, except as required by law. For the avoidance of doubt,
this press release is not affiliated with or endorsed by
Disney.
This press release is provided merely as information and is not
intended to be, nor should it be construed as, an offer to sell or
a solicitation of an offer to buy any security nor as a
recommendation to purchase or sell any security. Funds, investment
vehicles, and accounts managed by Trian currently beneficially own
shares of the Company. These funds, investment vehicles, and
accounts are in the business of trading – buying and selling –
securities and intend to continue trading in the securities of the
Company. You should assume such funds may from time to time sell
all or a portion of their holdings of the Company in open market
transactions or otherwise, buy additional shares (in open market or
privately negotiated transactions or otherwise), or trade in
options, puts, calls, swaps or other derivative instruments
relating to such shares.
Some of the materials in this press release contain
forward-looking statements. All statements contained herein that
are not clearly historical in nature or that necessarily depend on
future events are forward-looking, and the words “anticipate,”
“believe,” “expect,” “potential,” “could,” “opportunity,”
“estimate,” “plan,” “once again,” “achieve,” and similar
expressions are generally intended to identify forward-looking
statements. The projected results and statements contained herein
that are not historical facts are based on current expectations,
speak only as of the date of these materials and involve risks,
uncertainties and other factors that may cause actual results,
performances or achievements to be materially different from any
future results, performances or achievements expressed or implied
by such projected results and statements. Assumptions relating to
the foregoing involve judgments with respect to, among other
things, future economic competitive and market conditions and
future business decisions, all of which are difficult or impossible
to predict accurately and many of which are beyond the control of
Trian.
The estimates, projections and potential impact of the
opportunities identified by Trian herein are based on assumptions
that Trian believes to be reasonable as of the date of this press
release, but there can be no assurance or guarantee (i) that any of
the proposed actions set forth in this press release will be
completed, (ii) that the actual results or performance of the
Company will not differ, and such differences may be material, or
(iii) that any of the assumptions provided in this press release
are accurate.
Trian has neither sought nor obtained the consent from any third
party to use any statements or information contained herein that
have been obtained or derived from statements made or published by
such third parties, nor has it paid for any such statements. Any
such statements or information should not be viewed as indicating
the support of such third parties for the views expressed herein.
Trian does not endorse third-party estimates or research which are
used herein solely for illustrative purposes.
Important Information
Trian Fund Management, L.P., together with Nelson Peltz, Peter
W. May, Josh Frank, Matthew Peltz, Isaac Perlmutter, James A.
Rasulo, Trian Fund Management GP, LLC, Trian Partners, L.P., Trian
Partners Parallel Fund I, L.P., Trian Partners Master Fund, L.P.,
Trian Partners Co-Investment Opportunities Fund, Ltd., Trian
Partners Fund (Sub)-G, L.P., Trian Partners Strategic Investment
Fund-N, L.P., Trian Partners Strategic Fund-G II, L.P., Trian
Partners Strategic Fund-K, L.P., The Laura & Isaac Perlmutter
Foundation Inc., Object Trading Corp., Isaac Perlmutter T.A., and
Zib Inc. (collectively, the “Participants”) filed a definitive
proxy statement and accompanying form of blue proxy card (as
supplemented and amended on February 12, 2024, the “Definitive
Proxy Statement”) with the Securities and Exchange Commission (the
“SEC”) on February 1, 2024 to be used in connection with the 2024
annual meeting of shareholders of the Company.
THE PARTICIPANTS STRONGLY ADVISE ALL SHAREHOLDERS OF THE COMPANY
TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER PROXY MATERIALS
BECAUSE THEY CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS
ARE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT
HTTP://WWW.SEC.GOV AND TRIAN’S WEBSITE,
HTTPS://RESTORETHEMAGIC.COM. THE DEFINITIVE PROXY STATEMENT AND
ACCOMPANYING PROXY CARD WILL BE FURNISHED TO SOME OR ALL OF THE
COMPANY’S SHAREHOLDERS. SHAREHOLDERS MAY ALSO DIRECT A REQUEST TO
EITHER OF TRIAN’S PROXY SOLICITORS, OKAPI PARTNERS LLC, 1212 AVENUE
OF THE AMERICAS, NEW YORK, NY 10036 (SHAREHOLDERS CAN E-MAIL
INFO@OKAPIPARTNERS.COM OR CALL TOLL-FREE: (877) 629-6357), OR D.F.
KING & CO., INC., 48 WALL STREET, NEW YORK, NY 10005
(SHAREHOLDERS CAN E-MAIL DISNEY@DFKING.COM OR CALL TOLL-FREE: (800)
207-3158).
Information about the Participants and a description of their
direct or indirect interests by security holdings or otherwise can
be found in the Definitive Proxy Statement.
_________________
1 Source: Please refer to the definitive proxy statement, filed
with the United States Securities and Exchange Commission by Trian
Fund Management L.P. and certain of its affiliates and other
persons (the “Definitive Proxy Statement”) for information
regarding the members of the “Trian Group.” Nelson Peltz
beneficially owns Disney shares worth approximately $3.5 billion
and Jay Rasulo owns Disney shares worth approximately $800,000, in
each case as further detailed in the Definitive Proxy Statement.
Note that ownership position values are based on Disney’s share
price at the close of business on March 22, 2024.2 Source: FactSet.
Note: Disney relative performance measures TSR through 03/22/24
defined as the total return an investor would have received if they
purchased one share of stock on the first day of the measured
period, inclusive of share price appreciation and dividends paid.
“Peers” represents the simple average of “Media Industry Peers” as
defined in Disney’s 2024 Definitive Proxy Statement and consists of
Alphabet, Amazon, Apple, Comcast, Meta, Netflix, Paramount, and
Warner Bros. Discovery.3 Represents the cumulative market value
lost between Disney’s all-time high closing price on 03/08/21 and
10/06/23, the trading day prior to the WSJ article titled “Nelson
Peltz Boosts Disney Stake, Seeks Board Seats” by Lauren Thomas and
Robbie Whelan reporting on Trian’s increased beneficial ownership
in Disney shares and expected request for Board representation.4
Since Ms. Lagomasino became Chair of Disney’s Compensation
Committee, Disney’s say-on-pay votes have averaged just 73%,
which ranks in the bottom 10% of all S&P 500 companies and
Disney’s say-on-pay approval percentages have been below the
S&P 500 median every year. Say-on-pay has also been
below the average of all of the S&P 500 companies since
2018, which is Mr. Froman’s tenure on the Board.5 Operating income,
free cash flow and earnings per share have declined by 18%, 50% and
85%, respectively, since 2018. Source: SEC filings. Note: Earnings
per Share represents "Diluted EPS from continuing operations.”
6 Source: Institutional Shareholder Services Research Report,
published on 03/21/24.7 Blackwells Capital Investor Presentation,
03/11/24 (estimating that ValueAct has earned more than $90 million
in fees from managing assets for Disney’s pension funds).8 Source:
Anna Nicolaou, James Fontanella-Khan and Joshua Franklin, Financial
Times, “Jamie Dimon Backs Disney’s Bob Iger in Proxy Fight with
Nelson Peltz”, published on 03/13/24.9 Per Boardroom Alpha, Nelson
Peltz has been elected by shareholders on 52 occasions, garnering
greater than 90% support 44 times.10 Source: “Director and CEO
Letter to Disney Board in Support of Nelson Peltz and Trian,”
03/21/24.11 Source: “Director and CEO Letter to Disney Board in
Support of Nelson Peltz and Trian,” 03/21/24 (emphasis added)12
Source: CNBC, Squawk on the Street, 03/05/24.13 Source: James B.
Stewart and Lauren Hirsch, The New York Times, “The Billionaire
Taking on Disney Just Wants Some Respect,” published on 03/16/24.14
Source: James B. Stewart and Lauren Hirsch, The New York Times,
“The Billionaire Taking on Disney Just Wants Some Respect,”
published on 03/16/24 (emphasis added).15 Source: Robbie Whelan,
The Wall Street Journal, “Meet the Former CFO Who Thinks He Can Fix
Disney,” published on 02/25/24.16 Disney Press Release, 06/01/15.17
Disney Press Release, 06/01/15.18 Source: Institutional Shareholder
Services Research Report, published on 03/21/24.19 Source:
Institutional Shareholder Services Research Report, published on
03/21/24.
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