Activist investor Nelson Peltz and former Disney CFO Jay Rasulo are stepping up their fight to get on Disney’s board of directors.
Trian Fund Management, which was co-founded by Peltz, announced Thursday that it filed a preliminary proxy statement with the Securities and Exchange Commission in connection with its nomination of him and Rasulo to Disney’s board. The filing came on the heels of the board’s decision to reject both nominations.
“It is unfortunate that a company as iconic as Disney and with so many challenges and opportunities has refused to seriously engage with us, its largest active shareowner, about board representation,” Peltz said in a Trian press release. Trian owns $3 billion of Disney common stock, the release said.
Trian nominated Peltz and Rasulo in December, saying Disney’s board was “too closely connected to a long-tenured CEO and too disconnected from shareholders’ interests,” resulting in underperformance by the company.
On Tuesday, Disney said its board doesn’t support the Peltz and Rasulo nominations. Instead, the board unanimously recommended that shareholders vote for its own slate of 12 board nominees comprised mostly of sitting members, including Disney’s CEO Robert Iger and Board Chairman Mark Parker.
“Instead of having a boardroom that would include directors with an ‘ownership mentality’ that can bring fresh perspectives to the Company’s challenges, Disney is resisting change and asking shareholders to endorse a Board comprised mainly of legacy directors (and their hand-picked successors),” Peltz said in Trian’s Thursday release.
He said Trian intends to seek the support of shareholders for “meaningful change” in the board’s composition.
Rasulo said in the same release that he and Peltz as Disney directors would work with others on the board to “set demanding but realistic goals” tied to executive compensation.
Rasulo previously spent three decades at Disney, including a five-year stint as CFO from 2010 to 2015, according to Trian.
A Disney spokesperson didn’t immediately respond to a request for comment.
In a Tuesday SEC filing, Disney said its board rejected Peltz as a nominee after considering a number of factors, including the fact that he had not presented “a single strategic idea for the company” during a two-year quest for a seat on its board. His ties to former Disney executive Isaac Perlmutter was another issue, according to the filing.
Disney characterized Perlmutter’s history with the company as “fraught,” noting that he was removed by Iger from his executive position at Marvel in 2015.
“Mr. Peltz’s partnership with Mr. Perlmutter, who owns the lion’s share of the equity claimed by the Trian Group, and the complexity of Mr. Perlmutter’s history with Disney and Mr. Iger and other senior executives, created significant concern regarding how that partnership would impact Mr. Peltz’s agenda as a director,” it said.
The board also had several concerns about Rasulo, including the circumstances surrounding his departure from Disney; he resigned from his position as CFO of the company after being passed over for the role of chief operating officer, according to the SEC filing. The board worried that Rasulo’s “close relationship with Mr. Perlmutter, coupled with Mr. Rasulo’s having been passed over in the 2015 COO process despite Mr. Perlmutter’s sponsorship of him as a CEO successor, would likely inhibit Mr. Rasulo’s ability to work constructively with Mr. Iger and other executives at the Company with whom Mr. Perlmutter had clashed,” the filing said.