The Walt Disney Company logo is displayed on the floor of the New York Stock Exchange during morning trading on December 1, 2023.
Miguel M. Santiago | fake images
Proxy advisory firm Institutional Shareholder Services recommended Thursday that walt disney Shareholders elect activist investor Nelson Peltz to the board of directors in their bitter fight against CEO Bob Iger.
Peltz and his firm, Trian Fund Management, have asked investors to nominate him and former Disney CFO Jay Rasulo to the board at its annual general meeting on April 3. Among other things, Peltz wants to overhaul Disney's traditional television channels, which he claims have been a shrinking business and a loss of value for shareholders.
“Dissident candidate Peltz, as a major shareholder, could contribute to the succession process by offering assurances to other investors that the board of directors is adequately engaged this time,” the ISS report says.
Although it sided with Peltz, ISS told shareholders not to back Rasulo in the fight, citing his previous positioning as a possible successor to Iger.
“While we have no concerns about his ability to serve as a target director, we recognize that Rasulo's potential presence could create additional friction on the board,” ISS said.
ISS criticized Disney's board for repeatedly failing to find a new CEO to replace Iger, who left his role as CEO in 2020 only to return to the position years later.
In response, Disney said that ISS's recommendation “does not recognize the diverse set of skills and experience on Disney's board of directors” and emphasized that the representation firm supports 11 of its 12 nominees.
ISS also said shareholders should withhold their votes from a separate list of nominees, activist Blackwells. As a proxy advisory company, ISS can influence hundreds of investors with recommendations.
The recommendation comes as Disney has secured a number of high-profile endorsements, from the estate of Walt and Roy Disney to JPMorgan Chase CEO Jamie Dimon and major Disney shareholder and filmmaker George Lucas.
Another proxy advisory firm, Glass Lewis, earlier this week endorsed Disney's slate of board candidates. The ISS was largely expected to do the same.
Securing the support of the ISS and Glass Lewis is crucial in activist struggles. Large institutional shareholders will often, but not always, vote based on the recommendation of either proxy advisory firm. Both activists and management present their arguments to the advisory companies, which in turn issue their opinions based on meetings with both parties and their own analyses.
— CNBC's Rohan Goswami contributed to this report.
