The Walt Disney Company on Wednesday afternoon said it opposes activist investor Nelson Peltz’s attempt to join its board. Disney also named Mark Parker, the executive chairman of Nike, its next chairman.
Peltz’s Trian Fund Management confirmed later it had nominated Peltz to Disney’s board. Disney, Peltz said, had “lost its way resulting in a rapid deterioration in its financial performance.” Shares of the company closed Wednesday at $96.33. A year ago, Disney was trading at around $160 a share.
The announcements signal a big and messy fight. Nearly two months ago, Trian took an approximately $800 million stake in the company and began seeking a board seat. Trian wants to make operational improvements and reduce costs, according to the firm’s announcement Wednesday. The firm said it plans to file a proxy statement with federal regulators Thursday.
Trian also said it doesn’t want to replace Bob Iger as chief executive. Instead, Trian said, it wants to work with Iger to ensure a successful CEO transition within the next two years.
“Trian’s objective is to create sustainable, long-term value at Disney by working WITH Bob Iger and the Disney Board,” the firm said. “We recognize that Disney is undergoing a period of significant change and we are NOT trying to create additional instability.”
Disney preempted Trian’s announcement, saying earlier Wednesday that it had rebuffed Peltz’s advances.
“While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote for all the company’s nominees,” Disney said.
A new chairman
The new drama at Disney comes after a rough year for the entertainment giant’s stock as soaring streaming costs and a slim slate of theatrical releases ate into profits.
Parker, who remain Nike’s executive chairman, will succeed Susan Arnold. Her 15-year term limit at Disney will to an end after the company’s next annual meeting of shareholders. The date for the meeting has yet to be announced. Disney’s board will be reduced to 11 members following Arnold’s departure.
“During his four decades at Nike, Mark has led one of the world’s most recognized consumer brands through various market evolutions and a successful CEO transition, and he is uniquely positioned to chair the Disney Board during this period of transformation,” Arnold said in a statement Wednesday. Parker has been a member of Disney’s board for seven years.
Iger’s stunning return in November came with a promise of a two-year stint that would spark renewed growth. The CEO also plans to help find his next successor, after the tenure of his previous handpicked replacement, Bob Chapek, fell apart. Trian on Wednesday criticized Disney for “failed succession planning.”
Disney previously announced companywide cost-cutting measures in November, including a ban on all but essential work travel and a freeze on new hires for all but a few critical positions. Iger upheld that hiring freeze when he returned to the helm of the company later that month.
“Mr. Iger’s mandate is to use his two-year term and depth of experience in the industry to adapt the business model for the shifting media landscape, rebalancing investment with revenue opportunity while bringing a renewed focus on the creative talent that has made The Walt Disney Company the envy of the industry,” the company said.
–CNBC’s Jessica Golden contributed to this report.