Disney Formally Rejects Nelson Peltz’s Board Nominees; Iger’s Pay Hits $31.6M

Amid an activist investor fight with Nelson Peltz and his Trian fund, the Bob Iger-led Disney formally rejected nominations that Peltz offered for the board of directors and put forward its own slate.

Disney’s board presented these nominees: Mary T. Barra, Safra A. Catz, Amy L. Chang, D. Jeremy Darroch, Carolyn N. Everson, Michael B.G. Froman, James P. Gorman, Robert A. Iger, Maria Elena Lagomasino, Calvin R. McDonald, Mark G. Parker and Derica W. Rice.

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“The nominees reflect Disney’s ongoing commitment to a strong Board focused on the long-term performance of the company, strategic growth initiatives, the succession planning process, and increasing shareholder value,” the company stated.

The nominees came in the company’s preliminary proxy statement, which also had some background on Trian’s board crusade, and revealed executive pay for Iger and other top Disney executives.

Iger’s fiscal 2023 pay was $31.6 million, with former CEO Bob Chapek earning nearly $10 million (he was terminated a few months after Disney’s fiscal 2023 began in November 2022), and former CFO Christine McCarthy taking home a package valued at $18.1 million.

The lion’s share of Iger’s pay package was in stock and option awards.

According to Disney, the company had “no less than 20 meaningful interactions” with Peltz and his Trian Group after the company abandoned its proxy fight a year ago.

The company says that Iger met with Peltz in New York in November, and in that meeting, “Mr. Iger asked Mr. Peltz what courses of action he would recommend to the Board to address his concerns,” per Disney’s proxy filing. “Mr. Peltz again offered no strategic insights or proposed courses of action to address his concerns, and instead responded that he was not there to put forth a plan, he was only there to get a Board seat.”

Disney also revealed why its board chose to reject board seats for Peltz and former Disney CFO Jay Rasulo, who has joined Trian in its board fight.

“In deciding not to recommend Mr. Peltz, the directors considered a number of factors, including that in a two year quest for a seat on the Disney Board, Mr. Peltz had not actually presented a single strategic idea for Disney; that his assessment of Disney seemed oblivious to the ongoing secular change in the media industry; that Mr. Peltz’s experience was primarily in commodity consumer packaged goods businesses and not the media or technology sector, that Mr. Peltz had no experience in a business that is primarily driven by creative talent and focused on delivering uniquely memorable customer experiences; and that Mr. Peltz’s partnership with Mr. Perlmutter, who owns the lion’s share of the equity claimed by the Trian Group, and the complexity of Mr. Perlmutter’s history with Disney and Mr. Iger and other senior executives, created significant concern regarding how that partnership would impact Mr. Peltz’s agenda as a director,” Disney’s proxy stated.

“In deciding not to recommend Mr. Rasulo, the directors considered a number of factors, including that after leaving Disney eight years earlier, Mr. Rasulo had no further executive role at any public company; that the media business, the impact of technology and the competitive universe had radically changed during that eight year period rendering his perspective on Disney stale and not relevant to the challenges of today; that an outdated perspective on the business would be damaging to the ongoing strategic transformation underway; that Mr. Rasulo’s four years as a director and also lead independent director of iHeartMedia, Inc. had not produced strong returns there; and the Board’s belief that Mr. Rasulo’s close relationship with Mr. Perlmutter, coupled with Mr. Rasulo’s having been passed over in the 2015 COO process despite Mr. Perlmutter’s sponsorship of him as a CEO successor, would likely inhibit Mr. Rasulo’s ability to work constructively with Mr. Iger and other executives at the Company with whom Mr. Perlmutter had clashed,” it continued.

The SEC filing also revealed that succession planning is well underway, writing that during the year, the special committee “intensified its focus and adjusted its approach to CEO succession planning.” The company did not say how far along in the process it was.

Generative artificial intelligence was also mentioned, with the company writing that “the full Board also reviews reports regarding certain potential uses of generative artificial intelligence and the development of generative artificial intelligence governance principles,” suggesting that it is paying close attention to the risks and opportunities of the emerging technology.

The filing also revealed that it re-hired Brian Chapek, the son of former CEO Bob Chapek, as a production executive at Marvel Studios. Brian Chapek left the company after his father became CEO to start his own venture, of which Marvel was a client. According to Disney, the company “terminated the contract and re-hired Mr. B. Chapek as an employee” in June 2023, some eight months after his father was terminated as CEO.

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