Disney averts a leadership proxy war

The Future. The proxy battle raging between reinstated Disney CEO Bob Iger and activist investor Nelson Peltz ended yesterday after Iger announced a corporate reorganization initiative that satisfied Peltz. The truce suggests that most parties believe Iger’s reorganization program could help Disney increase share value and revenue after several difficult years.

Happily ever after
The WSJ outlined the earnings call that pushed Peltz to back down.

• Iger outlined plans to cut 7,000 jobs and $5.5 billion in total company costs.

• The corporate reorganization initiative would also shift power to content executives and sports media.

• Finally, Iger announced his intention to reinstate a small dividend by the end of the calendar year — a measure Peltz had explicitly requested.

• Before the truce, Iger had repeatedly slammed Peltz for lacking a concrete plan for how he’d restructure the company. More recently, Peltz’s fund, Trian Partners, wrote up an almost 100-page whitepaper detailing their requested changes — only to find that Iger already planned to institute many of them.

Disney’s stock price spiked after the earnings call ended.

Back in (the) black
Lately, Disney has struggled with streaming losses, political controversy, and falling share prices — which were near $200 in March 2021 but now trade at $115. The Peltz-Iger feud was fought over how the company could turn things around, and the end of that feud suggests that the two parties now agree on how to do that.

Disney beat analysts’ expectations on revenue and earnings per share this past quarter. The company has made shareholders and financiers happy — now all they need to do is please their audience.