The Walt Disney Company Comments on ISS Recommendation
- ISS recommends Disney shareholders vote 'FOR' 11 of Disney’s director nominees.
- ISS recognizes positive changes to the Board and the relevant experiences of Disney’s directors.
- Disney disagrees with ISS's support for Trian nominee Nelson Peltz.
- Disney emphasizes Maria Elena Lagomasino's valuable expertise and contribution to the Board.
- Disney urges shareholders to vote 'FOR' all 12 of Disney’s Director Nominees on the WHITE proxy card.
- ISS fails to acknowledge the diverse set of skills and experience on Disney’s Board.
- ISS recommendation overlooks the value added by Maria Elena Lagomasino.
- Nelson Peltz is not seen as bringing additive skills to the board by Disney.
- ISS suggests that Trian's involvement with former Disney employee Ike Perlmutter is a potential distraction.
Insights
The recommendation by ISS to support only 11 of Disney's director nominees presents a notable point of contention regarding the composition of the company's Board of Directors. From a corporate governance perspective, the inclusion or exclusion of certain directors can significantly influence the board's effectiveness in providing oversight and strategic direction. The emphasis on the qualifications and contributions of Maria Elena Lagomasino underlines the value placed on financial expertise and fiduciary responsibility within the boardroom.
Ms. Lagomasino's extensive experience in capital markets and corporate governance, including her role as a governance expert and founder of a fiduciary standards think tank, is indicative of the growing trend towards a heightened focus on corporate responsibility and ethical investment practices. The debate over board composition is reflective of broader discussions in the corporate world about the balance between shareholder value creation and responsible governance.
Analyzing the potential impact of board composition on Disney's stock performance requires a nuanced understanding of the market's perception of the board's ability to drive value. The explicit mention of Ms. Lagomasino's roles and achievements in financial institutions and her leadership in investment oversight for significant funds is intended to reassure investors of the board's capability to manage complex financial strategies and uphold shareholder interests.
However, the contested board seat and the involvement of Trian's silent partner, Ike Perlmutter, introduce elements of uncertainty. Market reactions to board disputes can be mixed, as investors may view internal disagreements as a sign of instability or, conversely, as a healthy part of corporate checks and balances. The long-term implications of such board dynamics on Disney's strategic direction and financial performance are key considerations for shareholders.
From an investor relations standpoint, the public discourse between Disney and ISS regarding the board nominations is a delicate matter. Transparent communication is important in maintaining shareholder trust and the company's recommendation to vote for its complete slate of nominees, including Ms. Lagomasino, is a strategic move to project unity and confidence in its governance structure. The emphasis on long-term shareholder value creation and succession planning is intended to align with investors' interests and mitigate concerns about potential disruption caused by the election of Trian's nominee, Nelson Peltz.
The reference to the support from another proxy advisory firm, Glass Lewis, serves to bolster the company's position and provide a counter-narrative to ISS's recommendations. For shareholders, the contrasting views from advisory firms and the company itself underscore the importance of due diligence and the need to critically assess the implications of board composition on their investment.
ISS recommends
ISS recommendation fails to acknowledge the diverse set of skills and experience on Disney’s Board, including significant value added by Maria Elena Lagomasino
“While we’re heartened to see support for Michael Froman and ISS’s recommendation to withhold on dissident directors Jay Rasulo and the Blackwells’ nominees, we strongly believe that ISS reached the wrong conclusion in its recent report when it comes to adding Nelson Peltz to the board,” said Mark Parker, Chairman of The Walt Disney Company Board of Directors. “In contrast to Glass Lewis, ISS fails to acknowledge the breadth of perspective and expertise Ms. Lagomasino adds to the Board. The strong recent performance and results overseen by the
The Walt Disney Company disagrees with ISS’s recommendation to support Trian nominee Nelson Peltz and believes Disney’s 12 Board nominees are best qualified to provide diligent oversight of management and create sustainable shareholder value. Nelson Peltz does not bring additive skills to the board, nor does he have a meaningful plan to deliver superior shareholder value in an evolving and increasingly complex global landscape, in stark contrast to the director Trian seeks to replace – Maria Elena Lagomasino. Furthermore, ISS suggests that the Board “comprises well-qualified and accomplished directors” and “does not lack a key skill set.”
Additionally, it’s worth noting that Trian’s silent partner, former
Ms. Lagomasino is a seasoned financial leader with an extensive capital markets career that has been centered on fiduciary responsibility, honing an investor perspective, and deep expertise in corporate governance. She is a governance expert who brings a strong shareholder perspective to the Board as a founder of the Institute for the Fiduciary Standard, a think tank committed to promoting the vital importance of the fiduciary standard in investment and financial advice. She has, among other roles, served as the President and CEO of JPMorgan Private Bank, a Trustee of Carnegie Corporation of
The Board strongly believes that replacing any of Disney’s nominees with any of the Trian Group or Blackwells nominees would deprive the company of skills and expertise required to help drive value for shareholders, a belief Glass Lewis’ report on March 18 also supports.
Shareholders with questions about how to vote their shares may call the Company’s proxy solicitor, Innisfree M&A Incorporated, at (877) 456-3463 (toll-free from the
Forward-Looking Statements
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Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and intellectual property we invest in, our pricing decisions, our cost structure and our management and other personnel decisions), our ability to quickly execute on cost rationalization while preserving revenue, the discovery of additional information or other business decisions, as well as from developments beyond the Company’s control, including: the occurrence of subsequent events; deterioration in domestic or global economic conditions or failure of conditions to improve as anticipated, including heightened inflation, capital market volatility, interest rate and currency rate fluctuations and economic slowdown or recession; deterioration in or pressures from competitive conditions, including competition to create or acquire content, competition for talent and competition for advertising revenue, consumer preferences and acceptance of our content and offerings, pricing model and price increases, and corresponding subscriber additions and churn, and the market for advertising and sales on our direct-to-consumer services and linear networks; health concerns and their impact on our businesses and productions; international, political or military developments; regulatory or legal developments; technological developments; labor markets and activities, including work stoppages; adverse weather conditions or natural disasters; and availability of content. Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable): our operations, business plans or profitability, including direct-to-consumer profitability; our expected benefits of the composition of the Board; demand for our products and services; the performance of the Company’s content; our ability to create or obtain desirable content at or under the value we assign the content; the advertising market for programming; income tax expense; and performance of some or all Company businesses either directly or through their impact on those who distribute our products.
Additional factors are set forth in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, including under the captions “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”, and subsequent filings with the Securities and Exchange Commission (the “SEC”), including, among others, quarterly reports on Form 10-Q.
Additional Information and Where to Find It
Participants
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321303366/en/
David Jefferson
The Walt Disney Company
Corporate Communications
818-560-4832
david.j.jefferson@disney.com
Mike Long
The Walt Disney Company
Corporate Communications
(818) 560-4588
mike.p.long@disney.com
Alexia Quadrani
The Walt Disney Company
Investor Relations
(818) 560-6601
alexia.quadrani@disney.com
Steve Lipin
Gladstone Place
(212) 230-5930
slipin@gladstoneplace.com
Source: The Walt Disney Company
FAQ
Why does ISS recommend Disney shareholders vote 'FOR' 11 of Disney’s director nominees?
Why does Disney disagree with ISS's support for Trian nominee Nelson Peltz?
Who does Disney emphasize as adding valuable expertise to the Board?
What does Disney urge shareholders to do regarding the Director Nominees?
What does Disney recommend shareholders do with Trian Group and Blackwells nominees?
