Nelson Peltz’s proxy battle was a “distraction,” and Disney can now focus on trying to turn a streaming profit and planning succession, its CEO Bob Iger said on CNBC’s “Squawk on the Street” on Thursday, just one day after handing a stinging defeat to the activist investor.
“One of the things that I feel great about right now is, put the victory aside, that I can spend all of my time with the management team and the board on executing against those priorities,” he said.
While Disney rolled out a string of initiatives to boost shares in recent months as the board battle went on, Iger noted that Peltz’s second proxy attempt did little to affect the company’s strategy for succession, business investments or its shift in content plans.
Iger told CNBC that choosing his replacement “is the board’s number one priority.” He added that Disney’s succession committee, which was established when he returned to his post in late 2022, has held a number of meetings in 2023, with plans for more in 2024. Iger noted that the activism has not changed Disney’s succession process. Iger’s contract runs to 2026.
Iger spoke candidly about the challenges Bob Chapek faced when he took over the company in 2020, including shutdowns of film and TV production, the closure of theme parks and the discontinuation of live sporting events. Chapek held the post for more than two years before Iger took it back over.
“Obviously, we all learn from the past and we’re prepared for this process to be successful,” Iger said.
In an interview with CNBC on Thursday, Peltz said he did not have any personal vendetta against Iger, but wanted to ensure the company had a leadership plan in place.
“The only issue I had with Bob was the succession plan, which again is at the feet of the board,” he said.
Iger also disputed the notion that Peltz’s activism was responsible for recent company stock gains — a claim the investor has made himself.
“The market is reacting to how this company is performing,” Iger said. “It was not reacting really to the activist.”
Shares of Disney are up 32% year-to-date. They rallied in February after the company made a series of major announcements during its earnings call, including that it had obtained the exclusive streaming rights to Taylor Swift’s Eras Tour concert film, made a $1.5 billion strategic investment in Epic Games and would launch a flagship ESPN streaming service.
For months, Disney had battled against Peltz’s Trian Fund Management, which sought two of the company’s board seats. Peltz had publicly lambasted Disney for its sustained share underperformance, failed succession process and what he claimed was billions in misdirected investments.
Peltz told CNBC he would not try to wage another battle against Disney if Iger follows through on plans to improve the company’s performance.
“I hope Bob can keep his promises,” Peltz said Thursday. ” I hope they can do all the things they assured us they were going to do. I’ll watch and wait. If they do it, they won’t hear from me again.”
Shareholders sided with Disney during Wednesday’s investor meeting. Peltz lost his board seat race to Maria Elena Lagomasino by a 2-to-1 margin and former Disney Chief Financial Officer Jay Rasulo, whom Trian also nominated, lost to Lagomasino by a 5-to-1 margin, a person familiar with the matter said. Retail voters overwhelmingly supported Disney, that person added, helping to deliver Iger 94% of the overall vote.
A second activist, Blackwells, also failed to win board seats in its own long shot bid. Percentage-wise, turnout for the director vote was in the mid-60s, another person familiar with the matter said. In 2023, around 63% of Disney shareholders voted.
Iger has done much to try and right the ship at Disney since returning to the helm of the company in late 2022. He undid a new corporate structure instituted by the short-reigning Chapek and pulled back on the quantity of film and television projects the company was producing. Iger also announced a plan last year to invest $60 billion in Disney’s theme park, cruise and experience business over the next 10 years.
Up next is a new bundled sports service with Warner Bros. Discovery and Fox, as well as a flagship standalone ESPN service, which will eventually be available directly through Disney+.
“What we’re trying to do is basically serve sports fans in multiple ways,” Iger said, noting that he doesn’t expect significant cannibalization between the two products.
Iger said that the flagship ESPN service will have significantly more content than what the ESPN component of the joint venture will have. He declined to share more about the joint venture, including a potential name or price point for the service.
