Why Nelson Peltz Grew Impatient With Disney’s Turnaround Efforts
Nelson Peltz said his proxy fight against Disney was over in February, but Bob Iger knew the activist investor might return. The Disney CEO remained in direct contact with Peltz this year, seeking to reassure him that Disney’s $5.5 billion in budget cuts and elimination of 7,000 jobs were progressing quickly, according to people familiar with the matter.
Iger spoke to Peltz, co-founder of Trian Fund Management, on the phone in May after Disney’s second-quarter earnings report, in which the company reported that it reduced losses in its streaming business, and tried to reassure him that the cost-saving plan was working, these people said. As the share price declined over the summer, however, the Trian team lost confidence in Disney’s ability to right the ship, even as the company’s board in July extended Iger’s contract through 2026, according to people familiar with the matter.
When Wall Street analysts began reducing their target price for Disney shares, it caught Peltz’s attention and contributed to his sense that Disney wasn’t on a path to financial health, according to people familiar with the matter. The company’s stock closed at $78.32 last Wednesday, its lowest level in more than nine years.
The activist is seeking several board seats, including one for Peltz, and wants the board to be more focused, accountable and aligned with shareholder interests, The Wall Street Journal reported Sunday. Disney shares, which have traded under $100 for most of the year, rose 2.1% to $84.70 Monday, more than the S&P 500.
Peltz’s Trian Fund Management has boosted its stake in Disney to around 30 million shares, making the hedge fund one of Disney’s largest shareholders. Iger has made progress with some of his stated goals to
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