April 17th, 2024

Disney fends off anti-diversity board contender

Malia Lazu

Banner Business Sponsored by The Boston Foundation

Anti-woke activist and investor Nelson Peltz has lost his bid to gain a seat on Disney’s board, landing a blow to recent attacks against Disney’s commitment to inclusive characters. Peltz, 81, a known instigator and head of the hedge fund management firm Trian Partners, put Disney in his crosshairs a couple of years ago and began advocating for board change. He claimed it was about profits, yet he seemed to have more to say about content than business solutions.

“Why do I have to have a Marvel [movie] that’s all women?” he said to the Financial Times recently. “Not that I have anything against women, but why do I have to do that? Why can’t I have Marvels that are both? Why do I need an all-Black cast?”

Peltz’ efforts to influence Disney’s move toward diverse voices seemed to be playing to the far-right culture wars with the company, including the pushback against casting Black actress Halle Bailey to play Ariel in “The Little Mermaid” and Latina actress Rachel Zegler to play Snow White.

Many were unsure of why Peltz wanted to instigate this fight, and it was clearly a costly one, both financially and to his reputation. Peltz spent $25 million on this fight and walked away with an estimated 31% of the shareholder vote. It is the biggest proxy loss Peltz has had in his career.

Bob Iger, the current Disney CEO and chair of the board, received 94% of the vote. Iger returned to Disney in 2022 after leaving in 2020. He was brought back after several missteps by his replacement, Bob Chapek, including failing to respond adequately to Florida’s controversial “Don’t Say Gay” bill. In trying to avoid controversy, he stepped into it. Chapek apologized in a letter to employees.

“It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry,” Chapek wrote.

Iger and his board pulled out all the stops in the public proxy fight with Peltz, including endorsement from Disney heirs and filmmaker George Lucas, who is married to Mellody Hobson, co-CEO and president of Ariel Investments. Lucas, who received almost 40 million shares in Disney as the largest individual investor in the company, expressed confidence in Iger’s leadership in a statement.

“When Bob recently returned to the company during a difficult time, I was relieved. No one knows Disney better,” Lucas said. “I remain a significant shareholder because I have full faith and confidence in the power of Disney and Bob’s track record of driving long-term value. I have voted all of my shares for Disney’s 12 directors and urge other shareholders to do the same.”

Iger has made moves to address some of Peltz’ concerns, including announcing a plan for his succession and continuation of a responsible move beyond linear TV into a profitable streaming model — something only three streaming services, Netflix, Hulu and Warner Bros., have been able to do. As he said to CNBC, “In some ways, the challenges are greater than I anticipated.”

The Disney heirs also support Iger and his vision for the future of the company, Reuters has reported. The four grandchildren of Roy Disney — Roy P. Disney, Susan Disney Lord, Abigail E. Disney and Tim Disney — in an open letter to Disney shareholders, expressed concerns about the threat posed by “self-anointed” activist investors, calling them “wolves in sheep’s clothing” waiting to tear the company apart.

Currently, it seems that Disney shareholders are allowing Iger to continue to lead with his vision for Disney’s turnaround. Disney’s stock price has been up 50% in the past six months after struggling in 2023 and the company remains a behemoth in the industry.

Disney sees diversity as part of its future strategy. Its forays into creating films with diverse main characters have largely paid off, with the “Black Panther” franchise, one of Disney’s highest grossing film series, a resounding success.